14-Liability In Negligence For Economic Loss And Psychiatric Injury Flashcards
What is ‘pure economic loss’?
Loss of profit
Which case demonstrates that there is not usually liability for ‘pure economic loss’?
Spartan Steel v Martin and Co (1973)
Facts: electric power cable negligently cut by D workman.
What are the facts of Spartan Steel v Martin and Co (1973)?
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.
In what two situations can loss be claimed for negligent misstatements?
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.
Which case demonstrates that a claim may be made by those who suffer financial loss as a result of relying on a statement?
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.
Hedley Byrne (1964)
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.
What 2 things must be established for there to be a possible claim based on negligent misstatement?
What case established these 2 things?
1) statement was made negligently
2) special relationship
Hedley Byrne (1964)
What further 5 points did the House of Lords set out to describe when D is liable for loss caused by negligent misstatement?
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
What is a disclaimer?
A statement informing C that company does not accept responsibility for advice being given.
What case demonstrates that negligent misstatement can be claimed even in social relationships?
Chaudhry v Prabhakar (1988)
Facts: C relied on friends advice to buy car and successfully sued him.
Chaudhry v Prabhakar (1988)
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.
Definition of psychiatric injury.
Sever, long-term mental injury which is more than shock or grief.
What 4 things must a secondary victim prove, IOT claim for psychiatric injury?
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.
3 examples of conditions that are considered ‘mental injuries’?
PTSD
Reactive depression
Acute anxiety
What case demonstrates that a claim for nervous shock can be made when C suffers fear of personal danger?
Dulieu v White (1901)
Facts: Coaches crash into bar and barmaid fears for her safety.
Dulieu v White (1901)
Principle: nervous shock due to fear of immediate personal danger.
Facts: coaches crash through a bar causing barmaid to fear for her safety.
What case demonstrates a claim can be made where nervous shock is caused by fear for the safety of a family member?
Hambrook v Stokes (1925)
Facts: mother suffered shock when fearing for safety of children as lorry crashed.
Hambrook v Stokes (1925)
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.
What case demonstrates that no claim can be made if there is no relationship and the claimant is not foreseen as to be affected?
Bourhill v Young (1943)
Facts: C witnesses motorbike crash and miscarriages. No claim was allowed.
Bourhill v Young (1943)
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.
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
McLoughlin v O’Brien (1982)
Facts: C witnessed her relatives receiving surgery after an accident and successfully claimed.
McLoughlin v O’Brien (1982)
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.
What case established Primary and Secondary victims?
Page v Smith (1995)
Facts: ME sufferer had ME made worse by crash.
Page v Smith (1995)
Principle: Established the distinction between Primary and Secondary victims.
Facts: C ME gets worse after car accident due to D negligence.
