Pure Economic Loss

Question 1

Spartan Steel v Martin

Answer 1

D negligently cut the power to claimant’s factory
Property damage and consequent economic loss were recoverable
Pure economic loss (what could have been manufactured during power outage) was not recoverable if caused by negligent act

Question 2

Conarken v Network Rail

Answer 2

Claimant’s bridge was damaged, had to compensate train operators who suffered economic loss because they were unable to use bridge - outer limits of consequential economic loss

Question 3

Weller v Foot and Mouth Disease

Answer 3

Agricultural auction sued for lost profit due to cancelled livestock auction - non-recoverable as economic loss not consequent on damage to own property

Question 4

Murphy v Brentwood

Answer 4

Property damage - defective property must have damaged other property
Cost of repairing inherently defective property is pure economic loss - non-recoverable in negligence

Question 5

Perrett v Collins

Answer 5

Model plane (certified) injured people - negligent misstatement and personal injury - used Caparo

Question 6

Clay v Crump

Answer 6

Defective architectural plans caused property damage and personal injury - used Caparo

Question 7

Hedley Byrne v Heller

Answer 7

Bank gave reference confirming financial viability of a buyer

1) Reasonable reliance
2) Assumption of responsibility
3) Special relationship

Question 8

Esso Petroleum v Mardon

Answer 8

Need not be in the business of giving advice - defendant knew the business

Question 9

Chaudhry v Prabhakar

Answer 9

Even though social situation, there was disparity in skill (defendant claimed to know more about cars)

Question 10

Stevenson v Nationwide

Answer 10

Claimant was an estate agent so should have known better than to rely on only one surveyor

Question 11

Yianni v Edwin Evans

Answer 11

Claimant was first-time buyer, reasonable to rely on a basic survey

Question 12

Caparo v Dickman

Answer 12

Audit report prepared for internal purposes was used by investors

1) Defendant must know that their advice will be communicated to the claimant
2) Defendant must know the exact purpose to which the claimant is going to use the advice
3) Defendant must know that the claimant is going to rely on it without independent advice

Question 13

James McNaughton v Hicks

Answer 13

Defendants prepared draft accounts for internal purposes that were used by the claimant - as experienced business people they should have known better than to rely on these accounts

Question 14

Williams v Natural Health Life

Answer 14

Franchisees tried to sue directors of company for economic loss - had never assumed responsibility (no personal dealings or contact)

Question 15

Henderson v Merrett

Answer 15

Rebuttable presumption that advice obtained in a commercial situation is going to be relied upon
Assumed control and management of client’s affairs - assumption of responsibility

Question 16

Smith v Eric S Bush

Answer 16

Any attempt to rely on a disclaimer of responsibility will be subject to UCTA 1977 and CRA 2015
Duty recognised between a surveyor and purchaser, even if contract is with the bank

Question 17

Ministry of Housing v Sharp CA

Answer 17

Breach of statutory duty to provide accurate information - did not inform purchaser that there was a charge over his land

Question 18

White v Jones

Answer 18

Despite no relationship between solicitors and beneficiaries of a will, a duty exists

Question 19

Ross v Caunters

Answer 19

Liability imposed for negligent misstatement whereby beneficiary was unable to benefit under a will

Question 20

Spring v Guardian

Answer 20

Duty recognised in negligent employment referencing

Question 21

Goodwill v British Pregnancy Advisory Services

Answer 21

D told vasectomy patient he was sterile, who told his partner, relied on information, she got pregnant
No duty owed - not foreseeable that it would be relied upon without independent inquiry, no duty to all patient’s future sexual partners