14-Liability In Negligence For Economic Loss And Psychiatric Injury

Question 1

What is ‘pure economic loss’?

Answer 1

Loss of profit

Question 2

Which case demonstrates that there is not usually liability for ‘pure economic loss’?

Answer 2

Spartan Steel v Martin and Co (1973)

Facts: electric power cable negligently cut by D workman.

Question 3

What are the facts of Spartan Steel v Martin and Co (1973)?

Answer 3

Workman negligently cut power lines to steel works causing damage to product.

Claims for products and products that were about to be manufactured were retrieved. Future earnings were NOT retrieved as this is put economic loss.

Question 4

In what two situations can loss be claimed for negligent misstatements?

Answer 4

1) Two-party liability-when A gives advice and B suffers loss in relying on it.
2) Three-party liability-A gives advice to B who passes it to C who subsequently suffers a loss by relying on it.

Question 5

Which case demonstrates that a claim may be made by those who suffer financial loss as a result of relying on a statement?

Answer 5

Hedley Byrne (1964)

Facts: C was advertising company who relied on D (client) bank to prove they could pay for services.

C could not claim but could have if the bank had not made them agree to terms.

Question 6

Hedley Byrne (1964)

Answer 6

Principle: a claim for negligent misstatement can be made when there is a special relationship between the parties.

Facts: Advertising company received misstatement from client’s bank.

Question 7

What 2 things must be established for there to be a possible claim based on negligent misstatement?

What case established these 2 things?

Answer 7

1) statement was made negligently
2) special relationship

Hedley Byrne (1964)

Question 8

What further 5 points did the House of Lords set out to describe when D is liable for loss caused by negligent misstatement?

Answer 8

1) Expertise-D has expertise
2) Reliance-Client rely on D advice
3) Communicated directly-to client. It through 3rd part
4) Client will act on advice
5) Disclaimer-lack of

Question 9

What is a disclaimer?

Answer 9

A statement informing C that company does not accept responsibility for advice being given.

Question 10

What case demonstrates that negligent misstatement can be claimed even in social relationships?

Answer 10

Chaudhry v Prabhakar (1988)

Facts: C relied on friends advice to buy car and successfully sued him.

Question 11

Chaudhry v Prabhakar (1988)

Answer 11

Principle: advice given in social relationships can still constitute negligent misstatement.

Facts: C relied on friend advice to buy car and successfully sued him when the car was unroadworthy.

Question 12

Definition of psychiatric injury.

Answer 12

Sever, long-term mental injury which is more than shock or grief.

Question 13

What 4 things must a secondary victim prove, IOT claim for psychiatric injury?

Answer 13

1) Accident-negligent accident caused injury.
2) mental injury-occurs
3) Alcock criteria-C must pass this criteria
4) Reasonable-a person of reasonable fortitude would have suffered the same injury.

Question 14

3 examples of conditions that are considered ‘mental injuries’?

Answer 14

PTSD
Reactive depression
Acute anxiety

Question 15

What case demonstrates that a claim for nervous shock can be made when C suffers fear of personal danger?

Answer 15

Dulieu v White (1901)

Facts: Coaches crash into bar and barmaid fears for her safety.

Question 16

Dulieu v White (1901)

Answer 16

Principle: nervous shock due to fear of immediate personal danger.

Facts: coaches crash through a bar causing barmaid to fear for her safety.

Question 17

What case demonstrates a claim can be made where nervous shock is caused by fear for the safety of a family member?

Answer 17

Hambrook v Stokes (1925)

Facts: mother suffered shock when fearing for safety of children as lorry crashed.

Question 18

Hambrook v Stokes (1925)

Answer 18

Principle: claim can be made where shock is suffered through fear for safety of a relative.

Facts: lorry crashes near mother and children and mother suffers shock for her children’s safety.

Question 19

What case demonstrates that no claim can be made if there is no relationship and the claimant is not foreseen as to be affected?

Answer 19

Bourhill v Young (1943)

Facts: C witnesses motorbike crash and miscarriages. No claim was allowed.

Question 20

Bourhill v Young (1943)

Answer 20

Principle: that no claim can be made if there is no relationship and C was not foreseen to have been affected.

Facts: C witnesses motorbike crash and suffers miscarriage.

Question 21

What case demonstrates that claim for nervous shock can be made by someone not in accident if.

1) C close ties to victim
2) Shock is suffered at scene or immediately after

Answer 21

McLoughlin v O’Brien (1982)

Facts: C witnessed her relatives receiving surgery after an accident and successfully claimed.

Question 22

McLoughlin v O’Brien (1982)

Answer 22

Principle: claim for nervous shock can be made by someone not involved in accident if:

1) close ties to victim
2) shock suffered at site of accident or immediately after

Facts: C witnessed relatives undergoing surgery after accident.

Question 23

What case established Primary and Secondary victims?

Answer 23

Page v Smith (1995)

Facts: ME sufferer had ME made worse by crash.

Question 24

Page v Smith (1995)

Answer 24

Principle: Established the distinction between Primary and Secondary victims.

Facts: C ME gets worse after car accident due to D negligence.

Question 25

What is the difference between Primary and Secondary victims as established by House of Lords in Page v Smith (1995)?

Answer 25

Primary-those involved and sustained physical and/or mental injury.

Secondary-not involves but suffered mental injury as result of accident.

Question 26

In addition to proving negligence, what else must Secondary victims prove?

Answer 26

Alcock criteria

As in Alcock v CC of S Yorkshire (1992)

Question 27

What is the Alcock criteria?

Answer 27

C has:

1) Close ties to V
2) Suffered mental injury
3) Senses-they perceive the shock through their own unaided senses i.e. not through TV

Question 28

What case established the Alcock criteria?

Answer 28

Alcock v CC of S Yorkshire (1992)

Facts: Group of families affected mentally by Hillsborough successfully make claim.

Question 29

Alcock v CC of S Yorkshire (1992)

Answer 29

Established the Alcock criteria.

Question 30

What case demonstrates that rescuers are deemed primary victims?

Answer 30

Chadwick v British Rail (1967)

Facts: C assisted in rescue attempts at train crash and suffered mental injury.

Question 31

Chadwick v British Rail (1967)

Answer 31

Principle: Rescuers are primary victims.
Rescuers should not be discouraged.

Facts: C suffered mental injury after rescuing people at train crash.

Question 32

What case is an example of a rescue professional claiming for mental injury?

Answer 32

Hale v London Underground (1992)

Facts: C was fireman who rescued people at the King’s Cross station fire and successfully claimed.

Question 33

Hale v London Underground (1992)

Answer 33

Principle: professional rescue workers can claim for mental injury too.

Facts: C was fireman who rescued people ya the King’s Cross station fire.

Question 34

What case is an example of when rescue workers could not claim for mental injury and why?

Answer 34

White v CC of S Yorkshire (1998)

Facts: Hillsborough police rescuers attempted to claim but not allowed.

Reason: public policy and they did not put their lives at risk.

Question 35

White v CC of S Yorkshire (1998)

Answer 35

Facts: Hillsborough rescue police tried to claim for mental injury but not allowed.

Reason: public policy and they didn’t put their lives at risk.

Question 36

If rescue workers cannot claim for mental injury such as in White v CC of S Yorkshire (1998) what is their alternative for claiming?

Answer 36

As a secondary victim.

Question 37

What case demonstrates that bystanders must satisfy the Alcock criteria to claim mental injury?

Answer 37

McFarlane v EE Caledonia (1994)

Facts: claimant witnessed explosion on North Sea oil rig. Did not succeed in claim as didn’t satisfy the Alcock criteria.

Question 38

McFarlane v EE Caledonia (1994)

Answer 38

Principle: bystanders can claim for mental injury if they satisfy Alcock criteria.

Facts: C witnessed explosion on North Sea oil rig but did not successfully claim as he did not satisfy Alcock criteria.

Question 39

What case demonstrates that shock can be claimed for witnessing the destruction of your own property?

Answer 39

Attia v British Gas (1987)

Facts: Woman witnessed property burning down due to D negligence.

Question 40

Attia v British Gas (1987)

Answer 40

Principle: possible to claim for shock having witnessed destruction of own property.

Facts: Woman witnessed her house burning down due to D negligence.

Question 41

What case demonstrates that if the horrifying event isn’t sudden then there is no claim?

Answer 41

Sion v Hampstead Health Authority (1994)

Facts: C suffered mental injury watching son deteriorate in coma over 14 days. No claim allowed.

Question 42

Sion v Hampstead Health Authority (1994)

Answer 42

Principle: no claim is allowed if the horrifying event isn’t sudden.

Facts: C suffered mental injury as he watched his so deteriorate in hospital over 14 days. No claim allowed.

Question 43

Which case demonstrates that a combination of events can amount to a sudden appreciation of a horrifying event?

Answer 43

North Glamorgan NHS Trust v Walters (2002)

Facts: C suffered mental injury after a 36 hour ordeal following her child’s treatment for liver failure.

Question 44

North Glamorgan NHS Trust v Walters (2002)

Answer 44

Principle: several events can amount to a sudden appreciation for a horrific event allowing a claim.

Facts: C suffered mental injury after 36 hour ordeal following progress of child’s liver failure treatment. Claim was allowed.