Negligence 2 Flashcards
is economic loss caused negligently reparable?
yes
three types of economic loss
derivative, secondary and pure
what is a derivative economic loss?
losses consequent on property harm or personal injury
are derivative losses recoverable?
yes can be recovered in damages
what is a secondary economic loss?
losses consequent on harm to property owned by a third party
are secondary losses recoverable?
no
Reavis v Clan Line Steamers 1925 SC 735
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
what is a pure economic loss?
financial harm independent of any other form of loss
what is negligent misstatement?
someone has given you negligent information and you have lost money by relying on them
Hedley Bryne v Heller & Partners [1964] AC 465 *
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.
factors needed to obtain compensation (as seen in Hedley Bryne v Heller and Partners)
- Assumption of responsibility
- Reliance on defender by pursuer to exercise skill required by circumstances
- Reliance reasonable in circumstances
- Disclaimer fatal to liability in this case
Henderson v Merrett Syndicates No 1 [1995] 2 AC 145
negligent performance of professional services.
D knew P was relying on D’s skill and expertise
Smith v Eric S Bush [1990] 1 AC 831
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.
Caparo Industries plc v Diskman [1990] 2 AC 605
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.
what is the test for pure economic loss?
tripartial test
what is the tripartial test?
foreseeable harm, close proximity and fair, just and reasonable to impose a duty
Cramasco LLP v Ogilvie Grant, Earl of Seaforth and Others [2014] UKSC 9
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.
Steel v NRAM [2018] UKSC 13
3 parties - solicitor, client & NRAM.
used Hedley Bryne principles:
- assumption of responsibility
- reliance on solicitor by NRAM to exercise skill required
- reliance reasonable in circumstance
No duty was owed as it was not reasonable for NRAM to rely on solicitor
two type of victims in mental harm (nervous shock)
primary victims and secondary victims
Dulieu v R White & Sons [1901] 2 KB 669
primary victim
mental harm was established.
guy drives horse and carriage into bar and causes pregnant woman to get a fright
Page v Smith [1996] AC 155
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.
what is a secondary victim of mental harm (nervous shock)
someone who is psychiatrically affected by witnessing something happening to someone else
McLoughlin v O’Brian [1983] 1 AC 410
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.
Alcock v Chief Constable of South Yorkshire [1992] 1 AC 310
Alcock rules must be satisfied to get damages for secondary victims of mental harm.
- Close ties of love and affection between primary victim and secondary victim
- Presence at event or immediate aftermath
- Direct perception
