negligence- Economic loss and Psychiatric injurd Flashcards
if a claimant successfully proves a negligent act or omission by another the defendant they will be able to claim damages :
any physical injury and or
any damage to property
no duty to compensate loss of profit
spartan steel v Martin and co contractors ltd 1973
An electric power cable outside the claimants factory was negligently cut by the defendants workmen. This had led to a loss of power for several hours to the factory which made steel alloys. A melt in the furnace at the time of the power cut had to be destroyed to stop it from solidifying and wrecking the furnace. there were three parts of the claim:
for the damage to the melts on the production line and the furnace- this could be claimed as it was physical damge.
for the loss of profit of those melts - this could be claimed as it amounted to consequential economic loss from physical damage.
for the loss of profit while the factory was out of action it was decided by the coa that this part of the claim should not be allowed as its amounted to pure economic loss. This 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 matter of policy, and that this loss of profit was better borne by insurers than by the defendants alone.
Weller v Foot and mouth disease research institute 1966
the foot and mouth virus was negligently allowed to escape from the defendants premises. It infected cattle, rendering them unsaleable and causing many to be destroyed. Restrictions were placed on the movement of all animals for some time to prevent the spread of the disease. The claimant was an auctioneer and brought an action claiming the loss of profit he would of made had he been able to continue his normal sales. his claim failed as the court decided that pure economics loss is not recoverable under tort law.
legal principle loss of income from this negligence was considered pure economic loss and not covered. The court decided that to allow this would create limitless liability and rejected for policy reasons.
what is the two part test?
statement made negligently as seen in Hedley Byrne heller and partner
a special relationship Chaudry v prabhakar like their friend
has to be directly communicated
Hedley Byrne v Heller and partner 1964
An 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 from easipowers bank. the bank gave a favourable reference and gedley Byrne went ahead with the campaign. however easipower went into liquidation without paying for the campaign. hedley Byrne sued easipowers bank for loss suffered as a result of its reliance on the reference.
the house of lords decided that, in principle, a claim could be made for negligent misstatement if a special relationship between the parties could be proved. in this case, there was a special relationship but the reference contained a disclaimer of liability. This amounted to a defence, which meant they Hedley Byrne could not succeed.
legal principle a claim can be made if it can be shown that 1 the statement was made negligently 2 there is a special relationship between the parties.
what is a special relationship?
requires all of the following:
The possession of a special skill or expertise on the part of the person giving the advice.
A reliance on the advice by the claimant eg the advice is acted upon but there has to be sufficient proximity between the two parties
the advice is communicated directly not through a third party eg newpaper
person giving the advice known that it is being used by the claimant
there is no disclaimer to the act as a defence
Chaudhry v Prabhakar 1988
The claimant asked her friend, who, while not a mechanic had some experience of cars, to find her a good second hand car that had not been in an accident. He recommended a car that was being sold by a dealer. The friend assured her that the car was in a good condition and had not been involved in a accident, relying on this assurance, she bought it. It was later discovered discovered that the case he had been recommended had been involved in an accident and was completely unroadworthy.
The claimant recovered the cost of the vehicle from the dealer under contract law but also successfully sued her friend for his negligent misstatement.
legal principle special relationship can exist in social relationships.
what is a psychiatric injury?
also known as nervous shock. a severe long term mental injury which more than shock or grief.
what is a primary victim?
someone who is directly injured by the event. the injury can be physical and or mental.
what is a secondary victim?
someone who is harmed when they witness event. the injury is likely to be mental.
what must a secondary victim prove?
there was an accident or sudden event where someone was negligent which caused the injury
some form of mental injury prevent from working like ptsd, medical evidence
claimant passes certian alcock criteria
that a person of reasonable fortitude would have suffered injury in the same circumstance
Dulieu v white 1901
The claimant was working a bar, when as a a result of an accident in the street outside, a coach and horses crashed into the bar. she suffered fear of her own safety. her claim was allowed as it was foreseeable that, in the event of an accident someone could suffer real and immediate fear of personal danger.
This was probably the first successful claim for mental injuries.
legal principle: a claim can be made if the victim fears for the own the safety
Hambrook v stokes 1925
A mother was walking with her children along a pavement when a runaway lorry passed her. She heard a crash ahead of her and also thought that lorry was involved in an accident involving children. She suffered severe shock as she feared for the safety of her children. Her claim was allowed and as a result a claim could be made by those suffering shock due to fearing or the safety of a family member.
legal principle: extended the principle of dulieu v white to fear for a family member
Bourhill v Young 1943
A pregnant fishwife heard an accident involving a motorbike as she was getting of a tram. she went to look at the scene and, when she saw the blood on the road, she suffered such a shock that she miscarried. Her claim was against the estate of the dead motorcyclist who had caused the accident failed, as she was not related to him and she was not within the range of people who could be foreseen as suffering shock. There was no proximity of the relationship between her and the motorcyclist. legal principle: to claim the mental injury must be caused injury to a family member.
