Negligence 2

Question 1

is economic loss caused negligently reparable?

Answer 1

yes

Question 2

three types of economic loss

Answer 2

derivative, secondary and pure

Question 3

what is a derivative economic loss?

Answer 3

losses consequent on property harm or personal injury

Question 4

are derivative losses recoverable?

Answer 4

yes can be recovered in damages

Question 5

what is a secondary economic loss?

Answer 5

losses consequent on harm to property owned by a third party

Question 6

are secondary losses recoverable?

Answer 6

no

Question 7

Reavis v Clan Line Steamers 1925 SC 735

Answer 7

Person C has orchestra and takes them on ship to perform at venues. Person A (clan line steamers) were negligent and the ship sank and killed members in the orchestra (person B) Parson C losses are secondary and are too remote

Question 8

what is a pure economic loss?

Answer 8

financial harm independent of any other form of loss

Question 9

what is negligent misstatement?

Answer 9

someone has given you negligent information and you have lost money by relying on them

Question 10

Hedley Bryne v Heller & Partners [1964] AC 465 *

Answer 10

Duty of care owed to pure economic loss.

Heller and Partners wanted Hedley Bryne to create an advertisement for them. Hedley Bryne contacted their bank to check if they were credit-worthy and they were ensure that they could afford it. Heller and Partners then went insolvent. Relied on statement made.

Question 11

factors needed to obtain compensation (as seen in Hedley Bryne v Heller and Partners)

Answer 11

1. Assumption of responsibility
2. Reliance on defender by pursuer to exercise skill required by circumstances
3. Reliance reasonable in circumstances
4. Disclaimer fatal to liability in this case

Question 12

Henderson v Merrett Syndicates No 1 [1995] 2 AC 145

Answer 12

negligent performance of professional services.

D knew P was relying on D’s skill and expertise

Question 13

Smith v Eric S Bush [1990] 1 AC 831

Answer 13

negligent conduct survey on house. contract between lender and surveyor not the purchaser and surveyor.

Failed statutory test of reasonableness as it was reasonable that the purchaser would rely on the surveyor.

Question 14

Caparo Industries plc v Diskman [1990] 2 AC 605

Answer 14

negligent audit showing company was in profit when it was in loss. Investors then bought it and lost money.

House of Lords held that wasn’t reasonable for auditors to assume responsibility and there was a lack of proximity.

Case may not have much significance today.

Question 15

what is the test for pure economic loss?

Answer 15

tripartial test

Question 16

what is the tripartial test?

Answer 16

foreseeable harm, close proximity and fair, just and reasonable to impose a duty

Question 17

Cramasco LLP v Ogilvie Grant, Earl of Seaforth and Others [2014] UKSC 9

Answer 17

seller misrepresented number of grouse available fro killing on grouse moor he was selling.

Outer house herd it was negligent misrepresentation as Cramasco had changed identity.

Inner house held there was insufficient proximity

Supreme Court held Earl of Seaforth had assumed responsibility by continuing negotiations knowing it would induce the buyer.

Question 18

Steel v NRAM [2018] UKSC 13

Answer 18

3 parties - solicitor, client & NRAM.

used Hedley Bryne principles:

1. assumption of responsibility
2. reliance on solicitor by NRAM to exercise skill required
3. reliance reasonable in circumstance

No duty was owed as it was not reasonable for NRAM to rely on solicitor

Question 19

two type of victims in mental harm (nervous shock)

Answer 19

primary victims and secondary victims

Question 20

Dulieu v R White & Sons [1901] 2 KB 669

Answer 20

primary victim

mental harm was established.

guy drives horse and carriage into bar and causes pregnant woman to get a fright

Question 21

Page v Smith [1996] AC 155

Answer 21

primary victim

Guy sitting in parked car and car crashes into him.

House of lords held that if you are a primary victim provided the harm done to you was a breach of duty - you should recover damages.

Question 22

what is a secondary victim of mental harm (nervous shock)

Answer 22

someone who is psychiatrically affected by witnessing something happening to someone else

Question 23

McLoughlin v O’Brian [1983] 1 AC 410

Answer 23

road accident involving pursuers family. she is informed of accident and foes to the hospital where her husband and 2 children were still in the same state

woman had psychiatric reaction and received damages.

Question 24

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

Answer 24

Alcock rules must be satisfied to get damages for secondary victims of mental harm.

1. Close ties of love and affection between primary victim and secondary victim
2. Presence at event or immediate aftermath
3. Direct perception

Question 25

Dorset Yacht Co Ltd v Home Office [1970] AC 1004

Answer 25

boys were under care and control of prison officers whom left the boys alone. Boys then tried to escape island and crashed the boat into others.

House of lords said they should be liable as they had control

Question 26

Maloco v Littlewoods Organisation Ltd 1987 SC (HL) 37

Answer 26

cinema broken into by kids - start fire and damages other properties.

Owner does not owe duty to other neighbours as had no control over criminals and it wasn’t foreseeable.