Negligence - causation and pure economic loss

Question 1

What is the common test for causation, from Barnett v Chelsea and Kensington Hospital?

Answer 1

The “but for” test

Question 2

Regarding factual causation, what must the claimant show on the balance of probabilities?

Answer 2

The harm suffered was caused by the defendant

Question 3

What must be proven for factual causation, if there is more than possible cause of harm?

Answer 3

That it was one above the others

Question 4

What is the material contribution approach?

Answer 4

In a multiple causes case the claimant only need show that the defendant’s breach of duty materially contributed to the damage

Question 5

How is factual causation considered where the claimant is injured more than once?

Answer 5

A later defendant who causes a subsequent injury should be liable only to the extent that he makes the claimant’s damage worse

Question 6

When will the court apply proportionate damages?

Answer 6

Rarely - where court has evidence which will enable it to divide up the injury suffered, it will apportion damages accordingly

Question 7

How may the court apportion damages if 2 or more people are responsible for the same damage? (Indivisible injury)

Answer 7

Apportioned according to each person’s share of responsibility for damage

Question 8

Do instinctive acts of a third party break the chain of causation?

Answer 8

No

Question 9

Do negligent interventions of a third party break the chain of causation?

Answer 9

Unlikely to

Question 10

Do reckless or intentional intervening acts of a third party break the chain of causation?

Answer 10

Yes - generally treated as a novus actus interveniens

Question 11

Do actions of the claimant ever break the chain of causation?

Answer 11

No, generally contributory negligence rather than breaking chain of causation

Question 12

What is the Wagon Mound rule for remoteness of damage?

Answer 12

If a reasonable person would not have foreseen the damage it cannot be recovered

Question 13

What is the “similar in type” rule in relation to remoteness of damage?

Answer 13

If claimant suffers an injury of a foreseeable type, it does not matter that the precise way in which the claimant was injured was not foreseeable

Question 14

What is the “egg-shell skull” rule in relation to remoteness of damage?

Answer 14

Take your victim as you find them rule, i.e. if they suffer a particular disability or have a condition, they can recover in full for their losses even though the defendant could not have foreseen the full extent of the loss

Question 15

What is the general rule regarding recovery of damages for pure economic loss?

Answer 15

There is a lack of sufficient proximate relationship between a claimant who has suffered PEL and a defendant who may have caused this, therefore cannot be recovered in negligence

Question 16

Why can the cost of replacement of a defective product not be claimed in negligence?

Answer 16

It is regarded as pure economic loss and therefore can only be claimed in contract

Question 17

Can PEL suffered by acquiring a defective item of property be recovered in negligence?

Answer 17

No

Question 18

What is the difference between PEL and consequential loss?

Answer 18

Consequential loss is connected to the property damage and therefore can be claimed under negligence

Question 19

Can economic loss connected to PI to the claimant / physical damage to their property be recovered under negligence?

Answer 19

Yes

Question 20

What were the facts and outcome of Spartan Steel v Martin?

Answer 20

Damage occurred to a third party’s electrical wire, which led to a the claimant losing products + profit on those products (could claim) and loss of profit of production of further products which could have happened in the downtime from the wire being cut (couldn’t claim as was PEL)

Question 21

Is there an economic claim in negligence if a defendant negligently damages property belonging to a third party and causes the claimant loss?

Answer 21

No - PEL situation

Question 22

What is the exception to no liability for PEL in negligence from Hedley Byrne?

Answer 22

There can be a duty of care owed NOT to CAUSE PEL by negligent misstatement, due to special relationship

Question 23

What must be established for the exception in Hedley Byrne to apply?

Answer 23

1. Assumption of responsibility by defendant
2. Reasonable reliance by claimant

Question 24

How did Caparo refine the Hedley Byrne exception?

Answer 24

1. Advice must be for specific purpose known to D
2. D must communicate advice to C
3. Relationship must have been such that D knew C would act upon advice without independent enquiry
4. Advice must be relied upon by C

Question 25

If all elements are satisfied in order to establish liability for PEL, what defence is available?

Answer 25

Exclusion of liability

Question 26

What are the 2 requirements for the exclusion of liability defence?

Answer 26

1. Reasonable steps must have been taken to bring exclusion notice to claimant’s attention before tort was committed
2. Wording of the notice must cover the loss suffered by the claimant

Question 27

Which statutes limit the ability to exclude liability?

Answer 27

UCTA and CRA

Question 28

When does UCTA apply?

Answer 28

Defendant acting in course of business and claimant is a consumer