Economic Loss Flashcards
Legal Principle: Economic loss needs to be linked to to physical damage.
Spartan steel V Martin and Co Ltd (1973)
An electrical power cable outside the claimant’s factory was negligently cut by the defendant’s workmen. This had led to a loss of power for several hours to the factory which made steel alloys. A ‘melt’ in the furnace at the time of the power cut had to be destroyed to stop it from solidifying and wrecking the furnace. There were three parts to the claim: damage to melts in production line- claimed as physical damage, loss of profits on melts- can be claimed as it amounted to consequential economic loss for physical damage, for the loss of profit while the factory was shut cannot be claimed as it is pure economic loss.
Legal principle: Loss of income from this negligence was considered pure economic loss and not covered. The court decided that to allow this would create limitless claims.
Weller V Foot and Mouth disease research institute (1966)
