ELS-Theory of tort law-Public policy factors governing imposition of liability in negligence for pure economic loss and psychiatric injury Flashcards
2 main reasons why compensation is not generally provided for pure economic loss.
- Financial or economic loss would traditionally be compensated through the law of contract.
- Would ‘open the floodgates’ to many similar claims, with astronomical claims.
Why are financial or economic losses typically compensated through the law of contract?
Contract law offers certainty as a D could be liable for a loss caused by his or her failure to complete a freely undertaken agreement.
Why would courts not want to compensate for pure economic loss because it ‘opens the floodgates’?
The validity of many claims may be difficult or impossible to check.
Preventing claims for pure economic loss increases certainty, making it easier for businesses to plan for the future with some idea of the possible costs of any successful actions against them.
Counter-arguments to pure economic loss not being compensated.
- It should be no more difficult to check claims for loss of profit than any other claim, as evidence could be produced in the same way as it would be needed for a personal injury claim.
- It is morally justified to compensate the C who has lost money through no fault of his or her own.
What is the reasons for imposing all the rules on victims of psychiatric damage?
Prevent floodgates from opening.
Without this restrictive approach there could have been a number of claims for Hillsborough disaster as there were 50,000+ spectators in the grounds and millions watching on TV
Areas of psychiatric damage were it can be argue that it is too restrictive.
- Close ties of love and affection
- Proximity
- Sudden
- Rescuers as primary Vs
Why can it be argued psychiatric damage rules are too restrictive when it comes to close ties of love and affection?
Many friends or relations of the victim may suffer distress but not meet the strict criteria of the test
Why can it be argued psychiatric damage rules are too restrictive when it comes to proximity?
Hearing about a shocking event could be just as distressing as seeing it.
Time limit for suffering shock is not easy to justify either.
E.g., Among Cs in Alcock there was a man who knew his brother was at the game and searched all night for him before finding out that he had died-received no compensation due to lack of proximity.
Why can it be argued psychiatric damage rules are too restrictive when it comes to a “sudden” shock?
Family member who cares for a seriously injured or dying relative over a period of time might suffer equal or greater distress than where there is sudden shock.
Why can it be argued psychiatric damage rules are too restrictive when it comes to rescuers as primary Vs?
in White (1999), a requirement was introduced by the HoL saying a rescuer could only claim if they feared for their own safety.
Yet, if they suffered distress, arguably they are equally worthy of compensation.
Example given by Lord Goff in White of why the psychiatric damage rules are too restrictive.
2 rescuers from a train crash suffering mental injury as a result of their experiences.
1 in front where danger was and could claim.
2nd in back where there was no danger would not be able to claim.
Seems illogical and morally indefensible as both were helping rescue others and it is pure chance whether danger was present or not.
