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PSL Ltd are a manufacturing company which produces a variety of cast metal products. This involves operating 2 furnaces powered by electricity supplied through a

PSL Ltd are a manufacturing company which produces a variety of cast metal products. This involves operating 2 furnaces powered by electricity supplied through a cable owned by the power company. A contractor has been engaged to construct a settling tank on a neighbouring industrial property. In the course of excavating the necessary hole for the tank, the contractor negligently severs the power cable supplying PSLs foundry, cutting off the power for some 24 hours. This causes the furnaces to cool and the melts in each to solidify. The consequences of this are serious. The solidified metal and slag has to be laboriously removed by hand assisted power tools, the damage to the linings of the furnaces means a virtual rebuild is required. PSL Ltd enumerate the losses caused by the negligence of the contractor as follows:

1. The cost of removing the solidified material and rebuilding the furnaces $750,000

On the basis of the law you have studied, explain the extent to which the above losses would be recoverable from the negligent contractor or their insurers.

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