Economic Loss

Question 1

Cattle v Stockton Waterworks (1875)

Answer 1

The independent contractor could not claim because he was not able to work; no proprietary interest

Question 2

The Aliakmon (1986)

Answer 2

Goods damaged during carriage at see; only a contractual right so no damage to property; unrecoverable

Question 3

Spartan Steel v Martin (1973)

Answer 3

Power cut affecting a factory can claim for:
1) Physical damage to melts
2) Consequential loss of profits
Cannot claim for:
3) Loss of profits on potential future melts
Lord Denning policy considerations
- Opening the floodgates of litigation
- Duty to insure
- Undermines contract
- Crushing liability

Question 4

Shell Case

Answer 4

Question over who owned the store, owning shares was sufficient ownership to claim and establish consequential economic loss of damage to machinery

Question 5

West Brom v El-Safety (2007)

Answer 5

Could not recover for medical negligence to the player

Question 6

The Fatal Accidents Act 1976

Answer 6

Common statutory exception to pure economic loss

Question 7

Murhpy v Brentwood (1991)

Answer 7

All previous cases overruled and loss in an investment is not recoverable; it is a person’s responsibility to ensure there is a contract; should one consider if it reasonable to get a paid valuation?
Complex structure theory

Question 8

Junior Books (1982)

Answer 8

Decided at the height of expansion of the law’ sub-contractor negligently damaged floor; pure economic loss but able to claim as an expansion of the Hedley Byrne principle as akin to contract

Question 9

Hedley Byrne v Heller (1994)

Answer 9

Claimants obtained a reference from the bank to insure safe investment; negligently said yes. Able to claim for pure economic loss.
Narrow reading: only applies to negligent misstatement.
Wide Reading: changes the law altogether.
NOT an application of Donoghue v Stevenson.
Special relationship:
1) Lord Devlin: akin to contract
2) Foreseeability of reasonable reliance
3) Voluntary assumption of of accuracy (circular)
Opens up a contractual supplement to third party reliance; will this reduce or improve gratuitous advice?; difficulty finding an appropriate test

Question 10

Commissioner of Customs & Excise v Barclays Bank PLC (2006)

Answer 10

A bank failed to impliment a freezing order; it was considered that an assumption is a fictitious test and merely a label used in a decision to find a duty of care where none exists

Question 11

Capara v Dickman (1990)

Answer 11

Lord Bridge established 3 requirements to be established before their is sufficient proximity:
1) Know the nature of the transaction
2) Know the advice would be communicated to them
3) Know it was likely this information would be relied upon
(NOT FORESEE)

Question 12

BCCI v Price Waterhouse (1998)

Answer 12

Court of Appeal suggested considering relevant factors:
1) The relationship between the parties
2) The circumstances under which the information was created and communicated
3) The presence/availability of advisers
4) The advisers ability to issue a disclaimer
5) Intention is not relevant, knowledge is
(Caparo - what is the purpose of the info?)

Question 13

Henderson v Merrett (1995)

Answer 13

Allow claims for negligent acts causing economic loss but a very strict duty of care test is needed