Tort - Pure Economic Loss

Damage to furnance and loss of steel being worked on at the time recoverable.

Inability to use the furnace and make future money was pure economic.

Lord Denning MR's justifications for limiting pure economic loss.

Floodgates, Protestant work ethic, liability denied in statute, loss should lie where it falls, blackouts a common hazard so less deserving, burden should fall on the whole community

Chain of contracts, sub-contracted to defendant to provide glass, which was defective.

No duty of care, not just, fair, and reasonable. Bingham LJ wondered why there was no contractual claim up the chain

Claimant tried to sue ship classification society when ship sank, no duty of care.

House of Lords: could have sued in contract, but damages were restricted to 10%. Not just, fair, and reasonable to disturb contractual allocation

NHS sued hospital for disabling woman, not foreseeable, proximate, or just, fair, and reasonable under Caparo v Dickman

The defendant damaged a third party's goods, who had already contracted to sell them to the claimant. Risk, but not title, had passed to the claimant, giving them not direct cause of action

A duty of care would breach privity. One cannot sue for damage to another's property. The claimant should have assigned rights of action

Club claimed on behalf of their 'asset' footballer, should have insured him, no claim

Lord Wilberforce took the damage to be physical, but later Lord Denning and Murphy v Brentwood took it to be pure economic.

Lord Browne-Wilkinson suggested it might be physical damage waiting to happen

Idea of preventative compensation rejected

Lord Bridge: known damage, either repair or sell, either way pure economic.

Builder is liable in tort for damage caused by negligently-built building unless defect is apparent before damage caused.

Exception if damages third parties

Lord Keith: liability a matter for Parliament, and the Defective Premises Act allows recovery in other areas

Lord Jauncey (obiter): no complex structure here, but the theory might apply if one component of the structure was built by a contractor which damaged the rest

Junior Books v Veitchi Corpexplained as part of Hedley Byrne v Heller & Co assumption of responsibility

High water mark of Anns v Merton, claimant sued sub-contractor for defective floor

Lord Brandon dissented: contractual obligations not actionable in tort

Second limb of Anns v Merton not met - no physical danger, no desire to create a contract

on 'unique facts', preferred Lord Brandon's dissent

No duty of care for builders

Major part of retreat from Anns v Merton

Noted, did not comment, on complex structure

Question of compound in melting containers was all part of same product

Court did not have to decide: sale of goods act

Building claims

Todd; must promount accountability

NZ courts have not been flooded

Must not undermine contract

Hedley Byrne v Heller and Partners

Assumption of responsibility, reliance

Misleading banker's letter

Exclusion of liability

Lord Devlin: voluntary assumption of responsibility

Lord Morris: if someone with a special skill undertakes and someone else relies, duty

Lord Reid: could have done nothing, but they did, and must accept responsibility

Henderson v Merrett

Investors sued managers of syndicates

Assumption of responsibility

Lord Goff: HB extended from provision of information into performance of services

Goff: nothing more akin to contract than contract

Unless inconsistent with contract

· LordGoff admitted his approach may be called ‘untidy’.o SteveHedley calls this a considerable understatement.§ Itblurs the lines between contract and tort.§ It isnow impossible to say if a contract between the parties contains all theirrights, or just some of them

Chaudry v Prabhakar

Friend giving advice for car was sued

D lawyer's conceded duty

Howard Marine v Odgen

Lord Denning MR: HB applies to businessmen inj course of business, excludes casual conversations

McKendrickhas argued that they are part of the same test

But provides evidence and causation

Lord Nolan, White v Jones, driving responsibility, almost all tort relies on reliance

AsLord Mustill put it in White v Jones,this ‘consummates’ the relationship

Smith v Eric S Bush

Relied on surveyor and house collapsed

Problem: employee has never met purchaser or assumed responsibility

LordGriffiths said: ‘I do not think that voluntary assumption of responsibility is ahelpful or realistic test for liability’

Question of circumstances when the law deems assumption

Surveyor would have known purchaser would rely

Templeman: sufficiently 'akin to contract'

Williams v Natural Life Health Foods

Lord Steyn: had to be voluntary, reciprocity

Steyn: coherence would give way to practical justice

Steyn; tort, as general law, must fill gaps of contract

Clayton v Woodman & Son (Builders) Ltd, a careless misstatement by an architectcaused personal injury – not pure economic loss.

Therewould have been no liability for pure economic loss in this instance.

Butthere was found to be some for personal injury

Salmon J accepted peculiarity that minor personal injury would be compensated, not ruinous economic loss

Caparo v Dickman

Accounts intended for general circulation

No proximity or reciprocity

Not akin to contract

Lord Bridge: need pragmatic, distinct situations, not general principles

Weir: caveat praedator is a sound and moral rule

Lords: Caparo and assumption of responsibility could be concurrent

Bingham: assumption of responsiblity sufficient but not necessary

Incrementalism not of much use

Hoffmann: assumption of R is legal, though policy and fairness will enter in

• Lord Walker described the Caparo test as ‘a set of fairly blunt tools’

Spring v Guardian Assurance

White v Jones

Negligent solicitor

Goff: noted no reliance, proximity, assumption of responsibility, loss, or contract

Assumption of R to client should extend to daughters

'practical justice' required gap to be filled

Lord Mustill

Issue is privity of contract

Tort is not the solution

HB has a duty of care arising from a relationship and mutuality - neither here