economic loss and pure psychiatric harm

Question 1

Economic loss caused by acquiring a defective item

Answer 1

Murphy v Brentwood district council

Council were negligent in assessing the structure of the pool walls, the pool cost a lot to repair, the company went out of business who built it.
Cannot recover damages as it is pure economic loss and so no sufficiently close relationship.

Question 2

Economic loss unconnected by damage to the property of a third party

Answer 2

Spartan Steel v Martin

The def cut of electricity to SS causing destruction of one melt that was part way processed.
Lord Denning decided:

1. The damage melt was property damage and recoverable.
2. The loss of profit from the melt was consequential economic loss and so recoverable
3. the loss of profit for four melts which coulee been made during the time was pure economic loss

damage property belonging to third party and cause me loss we have no relationship so no duty of care and cannot recover damages (pure economic loss)

Question 3

Economic loss caused where there is no physical damage

Actions

Answer 3

Weller v Foot and Mouth (FMDRI)

The FMDRI allowed foot and mouth to escape causing cattle to be destroyed.
Weller ran a cattle auctioneering business and sued the FDMRI but Weller was not injured and did not own the cattle so could not recover any damages.

Question 4

No physical damage

Statements

Answer 4

Hedley Byrne v Heller
- A duty of care could arise only if there is a special relationship e.g. one placed a reasonable reliance on the other person or when the maker of the statement assumed responsibility to them.

Caparo v Dickman

• Law lords decided auditors only owed a duty to the company they are auditing and not any shareholders

Question 5

Extension of the special relationship

Answer 5

Spring v Guardian

Question 6

What is the key test in Hedley Byrne v Heller

Answer 6

A special relationship would only arise when:

1. the defendants knew their advice would be communicated to the client
2. In connection with a specific transaction
3. That the claimant would likely to rely on the advice without taking further steps to check it

The def must know the specific purpose for which the claimant sought advice.

Question 7

Solicitors negligence

Answer 7

White v Jones

Question 8

Facts of White v Jones

Answer 8

A father instructed his solicitor to redo his will to leave his daughters some money. He died before this happened so the daughters sued for negligence

Question 9

Questions and argument to be considered in White v Jones (special relationship) and what was the decision

Answer 9

Main: Does the solicitor owe a duty of care to the disappointed beneficiary?

1. this may open the floodgates
2. they had no dealings with the solicitor
   etc

decision: to impose a duty ‘practical justice’

Question 10

Implications of White v Jones

Answer 10

cannot predict how the rules will be applied and that the ‘assumption of responsibility’ doesn’t mean the defendant intentionally decided to be responsible to the claimant. So the court will OBJECTIVELY assess if the defendant is deemed to assume the responsibility.

Question 11

The current state of law in regard to psychiatric harm

Answer 11

1. if physically injured claimants can also claim for any consequential psychiatric harm
2. illnesses suffered as the result of a build up of stress e.g. workplace stress and are important of employers liability.
3. Being involved in or witnessing a traumatic event is complex part of the law.

Question 12

1.Dulieu v White & Sons [1901] 2 KB 669

Answer 12

Barmaid suffered a miscarriage after suffering shock from a horse carriage crashing into the bar - the calaim was successful

Question 13

2. Hambrook v Stokes Bros [1925] 1 KB 141

Answer 13

Psychiatric harm following a lorry without the hand break on rolling down a hill to where her ids were playing. She heard a crash and screams (no-one was hurt) - The claim was allowed like Dulieu who was shocked for fear of herself, she was shocked for fear of her children.

Question 14

3. Bourhill and Young [1943] AC 92 HL

Answer 14

Sues for miscarriage after hearing a bike crash and then later saw blood left on the road - The claim was rejected as she was not a foreseeable victim of the crash

Question 15

McLoughlin v O’Brian [1983] 1 AC 410

Answer 15

seeing her family In hospital after a car crash was distressing - She witnessed the immediate aftermath which meant the claim succeeded

Question 16

Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310

Answer 16

Hillsborough disaster

number of cases heard together. All failed

produced a number of rules as it was witnessed by thousands of people

Question 17

What are the 4 rules of the Alcock case

Answer 17

1. Only a claimant with a recognised medical condition can sue
2. Vague conditions e.g. nightmares and upset are not enough
3. PTSD and depression count as MC
4. The MC must be brought about sudden shock rather than a steady build up
5. ‘secondary victims’ - the shock suffered must be foreseeable In someone of reasonable fortitude (easy in Hillsborough)

Question 18

Three conditions showing sufficient proximity between the claimant and the defendant

Answer 18

1. close ties of love with the victim - parents and children + spouses (not sibilings)
2. present at the event or immediately after
3. witnessed the event or aftermath with their unaided senses e.g. not on tv

Question 19

Page v Smith [1996] AC 155

Answer 19

Page = nor car crash and suffered from ME as a result

even though he suffered psychiatric injury page was at risk of physical so the courts decided he was a primary victim

Primary victims don’t need to show the injury is foreseeable but must show they have suffered a recognised psychiatric condition and no other proximity tests are done

Question 20

White v Chief Constable of South Yorkshire [1998].

Answer 20

PO’s suffered PTSD following Hillsborough and sued their constable arguing the rescuers should be primary victims and owed a duty of care. The constable said he didn’t owe a duty and the courts decided they were not to be automatically be treated as primary victims.

Question 21

Explain the threshold test of primary victims

Answer 21

Rescuers who were in danger, or reasonably believed themselves to be in danger, of physical injury, were primary victims and were owed a duty of care not to be caused psychiatric harm.

Question 22

Explain the threshold test of secondary victims

Answer 22

Rescuers in no such danger were treated as secondary victims and needed to pass all the requisite tests from the Alcock case.