negligence: psychiatric harm and pure economic loss

Question 1

what are limited duty situations?

Answer 1

kind of loss suffered by a claimant can alert us to the fact that a duty of care might not be owed to them

Question 2

what is the general rule about pure economic loss?

Answer 2

D does not have a duty of care to a claimant not o cause pure economic loss- if claimant suffers damage classed as pure economic loss, the loss is not recoverable

Question 3

what is pure economic loss?

Answer 3

financial loss which doesn’t cause personal injury or damage to property

Question 3

what are the two types of pure economic loss?

Answer 3

caused by damage to property of third party, caused where there is no personal injury or physical damage to property

Question 4

what is an exception to the general rule that there is no duty not to cause economic loss?

Answer 4

special relationships between C and D as D has assumed responsibility for C

Question 5

what are the two elements of a special relationship according to Hedley Byrne?

Answer 5

an assumption of responsibility by the D, responsible reliance by the C

Question 6

what does Caparo say are the four criteria for a D to have assumed a responsibility for C?

Answer 6

D knew the purpose for which the advice was required D knew that advice would be communicated to the C, D knew that the C was likely to act on advice without independent inquiry, advice was acted on by C to its detriment

Question 7

which principle has been extended to cover a wider class of cases of pure economic loss such as cases where D has assumed responsibiity towards the claimant

Answer 7

Hedley Byrne- a negligent, though honest, misrepresentation (oral or in writing) may give rise to an action for damages for economic loss in tort, because the law will imply a duty of care.

Question 8

what did Henderson case establish?

Answer 8

a C CAN rely on a claim in tort even though they have a contract with the D for professional services ONLY if tort is consistent with duty in contract

Question 9

in the event that there is an established duty of care owed not to cause pure economic loss, what must be considered?

Answer 9

other elements of the claim in negligence e.g. breach of duty and causation of damage- if all are satisfied must look then at defences (usually exclusion of liability defence)

Question 10

for the exclusion of liability defence, what two requirements must be satisfied?

Answer 10

reasonable steps must have been taken to bring to exclusion notice to the claimant’s attention before the tort was committed/wording of notice must cover the loss suffered by the claimant

Question 11

what statutes further limit to use of the exclusion of liability defence?

Answer 11

Unfair Contract Terms Act 1977, Consumer Rights Act 2015 (specifically in Hedley Byrne these acts meant that the disclaimer they had written did not satisfy req for defence)

Question 12

what elements have to be satisfied for the UCTA to be applicable?

Answer 12

D must be acting in course of business

Question 13

what elements have to be satisfied for the CRA to be applicable?

Answer 13

D must be acting as a trader and C must be a consumer

Question 13

what does section 11(3) of the UCTA state about non contractual exclusion notices?

Answer 13

it should be fair and reasonable to allow reliance on the exclusion notice, having regard to all the circumstances

Question 14

what are the factors given by the HoL in deciding the question of reasonableness?

Answer 14

equal bargaining power? reasonably practicable to obtain advice from alternative source? how difficult is the task in question? what are practical consequences e.g. money at stake, abilities of parties to bear the loss in light of insurance?

Question 15

how is duty of care established for psychiatric harm?

Answer 15

similar- sufficient proximity between D and C, the C has to be closely enough affected by the D’s negligence for a duty to be owed to them

Question 15

what is the general rule about Ds and pure psychiatric harm?

Answer 15

D does not owe a duty not to cause pure psychiatric harm

Question 16

what is consequential psychiatric harm?

Answer 16

when psychiatric harm follows on from the physical injury of an incident

Question 17

what is classed as pure psychiatric harm?

Answer 17

harm is caused without any physical impact or injury to the C

Question 18

do all occasions of psychiatric harm give rise to a duty of care?

Answer 18

no- the injury must be caused by a sudden shock (not a gradual build up of events) and either a medically recognised psychiatric illness or a shock-induced physical condition

Question 19

what other limitations are there on who can be compensated for pure psychiatric harm?

Answer 19

how far the C was involved in the events caused by the Ds negligence

Question 20

how are primary and secondary victims defined by HoL in Page v Smith?

Answer 20

primary- someone who was in the actual area of danger or reasonably believed they were in danger

secondary- witnesses injury to someone else or fears safety for another person

Question 21

what are the requirements for a duty of care to be owed to a PV?

Answer 21

risk of physical injury was foreseeable- not necessary for the risk of psychiatric harm to be foreseeable

Question 22

what are the requirements for a duty of care to be owed to a SV?

Answer 22

victim must have suffered a medically recognised psychiatric illness or shock induced physical condition

Question 23

what were HoL’s requirements for duty of care to SV in Alcock?

Answer 23

must be reasonably foreseeable that a person of normal fortitude in the Cs position would suffer a psychiatric illness, C must have close relationship of love and affection with person endangered, C must be present at accident or immediate aftermath, C must see or hear the accident or its immediate aftermath with their own senses (not from a 3rd party)

Question 23

what was the principle in White given by HoL about rescuers?

Answer 23

is rescuer has been in actual area of danger, they are PV- duty of care owed provided foreseeable risk of phys injury, if rescuer not in actual area of danger so no exposure to phys injury, they are SV and only owed duty of care if pass all Alcock tests