Economic Loss And Pyschiatric Injury Flashcards
Economic loss
While a duty of care is owed to claimants not to damage property, there is duty to compensate for loss of profit
There is main 2 reasons for this
1. Financial or economic loss would traditionally be compensated through law of contract
2. Allowing the claim could lead to to the floodgates being opened to similar claim’s
The counter to the argument that there is no duty to compensate for there is off profit
- no more difficult to show economic loss than any other claims
- can also be argued that it is morally justified to compensate for lost money however there is many rules that prevent this
Economic loss caused by negligence
key cases of loss caused by negligent acts
spartan steel v martin and co ltd 1973
weller v foot and mouth disease reasearch institute
spartan steel v martin and co ltd 1973
an electric power cable outside the claimants factory was negligently cut by the defendants workmen. this led to a loss of power for several hours to the factory which made the steel alloys melt bin the furnace . there was 3 parts to this claim
1 - for the damage to the melts on the production line and the furnace - this could be claimed as it was physical damage
2- for the loss of profit on the melts - this could be claimed as it ammounted to the consequential economic loss from phsyical damage
3- for the loss of profit whilst the factory was out of auction the COA decided that this part of the claim should not be allowed as it amounted to pure economic loss which was a financial loss which was not caused by physical damage to the claimant. lord denning decided that a line must be drawn as a mater of policy - and this loss of profit was better for insurance companies then by the defendant
Weller v foot and mouth disease research institute 1966
The foot an mouth virus was negligently allowed to escape from the defendant premises. it infected cattle, rendering them unsalable and causing many to be destroyed. Restrictions were places on the movement of all animal for some time to prevent the spread of the disease.
the claimant was an auctioneer and brought an auction claiming the loss of profit he would have made has he been able to continue his normal sales. his claim failed as the court decided that pure economic loss is not recoverable under tort law.
legal principle - loss of income from this negligence was pure economic and not covered.
court decided that to allow this it would open a floodgate for other cases
- pure economic loss is not recoverable under tort law
loss caused by negligence mistreatment
1 two part liability - this is when A gives a statement or advice to B and B makes a loss because of it
. if there is contract between A and B then B can claim compensation for breach or contract
. if B has not paid for advice, then they cannot claim for a breach of contract
. can B claim under negligence if they show that A has breached their duty of care
- three-part-test - this is where A makes a statement to b, and B communicates it to C, C then suffers loss in relying on the statement
.you will need to show tat there is a relationship between A and C to show negligence
Hedley v Byrne and partner 1964
public policy
these decisions show that the court is making distinctions to restrict cases
- this may create unfair anomalies in the law
- failures to consider the loss of profit in spartan steel can be seen as allowing the d to get away with causing harm that was predictable
- it also can be morally unfair to not compensate a claimant who has suffered loss through no fault of their own
- however the purpose or tort law is to compensate for loss, not to compensate for any potential profit
Hedley v Byrne and partner 1964
legal principle -
ana advertising company, Hedley Byrne, was approached by easipower to place adverts in newspapers and magazines. it had not previously dealt with easipower so it requested a reference form easipowers bank. The bank gave a favourbale refernce and hedley byrne went ahead with the campaig. however easipower went into liquidation without paying for the campaign. hedley byrne sued easipowers bank for the loss suffered as a result of its relaince om teh referenc/
the house of lords decided that in principle a claim could be made for a negligent misstatemnet if a special realtionship between the parties could be proved. in rthis case, there was a special relationship but the reference containmed a disclaimer of liabilty this amounted to a deence wjich meant they heydley bryne could not be sucessfull.
What is. Special relationship and key case for this
Key case = chaudry v prabhakar 1988
This was never defined in Hedley v Byrne but was later considered in capro industries v dickmam
A sore is, relationship requires teh following
- possession or expertise on the part of the person giving the davhce can be a recognised qualification or the person has special knowledge or skill in the field
A reliance on the advice by the claimant e.g tge advice is acted upon
- the advice is communicated directly to the claimant not through a third party e.g a newspaper
- the person giving tge advice knows if is being used by the claimant
- no disclaimer to act as a defence
chaudry v prabhakar 1988
Key case for special realationshio
The claimant asked her friebd who, while not a mechanic had some experience of cars. To find a second hand good car that had not been in an accident. He recommended a car that was being sold by a dealer. Friend reassured her that the care was in good condition. Abd was nit involved in an accident. Relying in this assurance, she brought it
It was later discovered tgat the car he had recommended had been in an accident and was completely unroadworthy
Claimant recovered tge costs of tge vehicle from the dealer under contract law but also successfully sued ger friebd fur his negligent misstatement.
Theory of law of psychiatric injury
V has to has show if they are primary or secondary victims along with the other key elements on negligence
What is psychiatric injury
Also known as nervous shock. A severe long term mental injury which is more then shock or grief
Primary victim - someone who was directly injured in the event
. Injury can be physical or mental
- secondary victim = someone who is horned when they witness an event
. Injury is likely to be mental
Pub,if policy
Most claimed will be for pure economic loss due to unable of working
Primary v gave to prove negligence on the part of the defendant
Judges have developed public policy’s especially for the secondary victim so a floodgate of cases don come through
Elements to be Successful secondary victim
There is an accident or sudden event where some on the d was negligent which caused the injury
Some form of mental injury
Claimant passes certain criteria tge Alock criteria
A person of reasonable fortitude would have suffered injury’s in the same circumstances
A mental injury
Medics, ebudebce - severity affected by the injury
More than mere shock or grief Primary victim
Long-term e.g prevents rge claimant from working
. Must include loss of earning last abd future
Examples
. Post traumatic stress disorder
. Reacrve depression
. Acute abcuety
Illness most common from a sudden event
Dulieu v white
Hambrook v stokes
Bourhill v young
Mcloughlin v O’Brien
Delieu v white
C was working in a bar. A coach and horse crashed into the pre car. Suffered fear for her safety . Her claim was successful as it was forseabike that in an event someone could suffer real and immediate fear of personal danger
1st successfully claim for mental injuries
Held foreseeable that in the vent of an accident someone could suffer real and immediate fear of personal danger
Hambrook v stokes
Mother was walking her child when a run way korey passes, she heard a crash ahead where the lorry had an accident involving children,
Held - her claim was successful as a result a claim could be made by those suffering shock due to fearing for the safety of a family”y member
Bourhill v young
A pregnant fishwife heard an accident involving a motor bike as she was getting of the train. Went to look at the seven and when she saw the blood on the road she suffered suck shock she miscarried.
Claim against the estate of the dead motorcyclist was nisapproved as she did not have a relationship with the motorcyclist
Mcloughin v O’Brien
Mcloughlins husband and children were involved in a car accident due to negligence of a lorry driver, she went home and was informed of the accident she went to the hospital where her family were being treated she suffered shock when she saw then nd learnt the death of one of her chukdren - sufpcessfulk due to the promimity of relationship between her and the injured
2 principles were set out by the HOL which extended the rules for claiming nervous chick
1 - a claim could be made by someone who had close ties of love and evfection with the victim of the accident
- The shock could be suffered either at the scene of the accident or within its immediate aftermath. No time was set for this, but mes mcloughlin arrived at the hospital within 2 hours of the accident
Page v smith
Page v smith
The claimed had suffered for ME before the accident. He was in recovered when he was involved in a minor incident due to the defendnacts negligence, he was not physically injured but the accident triggered his me which become chronic and permanent p.
As a hpresujt he was unable to return to his job as a teacher. W
HOL decided that provided some kind of personal injury was foreseeable it did I hit matter whether the injury was physical of psychiatric so teh distinction was made between primary and secondary victims
Primary victims
HOL in page states that primary victims are
- those involved in the accident
- may suffer physical or psychiatric injury
- required to prove that the defendant was negligent
- can ckaim for both physical damage and psychiatric injury
Secondary vuctimws
House of Lords stated that secondary vuctimws are
- those involved in the accident
- suffered mental injury as a result of what the saw or heard in the aftermath
- need to prove negligence
- meet the Alcock criteria
- only succeed if a reasonable oersin in that position would have suffered shock
Atlcok v chief constable of South Yorkshire 1992
Due to the negligence of the police, too many football supporters were allowed into an area of the Hillsborough ground, leading to many suffering crush injuries. 96 fans died and hundred were injured. The police eventually admitted negligence a d settled claims who suffered mental injuries as a result of learning that members had been involved in the tragedy
The Alcock criteria
Claimants must have close ties in lobe and affection for the victim
. Relationship is a close type of relationship
. The relationship is close in fact
- the c,aim t suffered mental injuries at the scene of the accident or in the immediate aftermath ( as seen in McLoughlin)
. Some claimants Saw the bodies off the victims 8 hours later in the mortuary these claims were not allowed - claimant sufffered shock through his or her own unaided senses, in other words they saw or heard the accident or the aftermath
. This excluded claims from people who have seen or heard the event on the tv or radio etc
Other claimant rescuers
- this covers anyone who helped a victim of an ancient
- what would happen if the court incident allow claims for rescuers
- most cases are likely to succeed so people are not discouraged from helping in an accident
- previous cases have set the precedent for rescuer cases
Chadwick v British rail (1967)
Chadwick v British rail (1967)
Claimant helped victims of the Lewisham train crash which accrued close to his home. Because of his small size, he was encouraged to crawl into wreckage to give injections and comfort trailed passengers. As a result of his experience, he suffered mental injuries. His claim against the negligent railway authority was sucrssful,as the court considered he was a primary victim, at risk to himself and it did not want to disencourage member of the public from rescuing, if required
Held - successful he was a primary victim also did not want to disencourage public form helping
Modern more cases
Most cases now will be from professional rescuers who put themselves first
Hale v London Underground 1992
White v chief constable of South Yorkshire
