Tort (Economic Loss)

Front 1

Cattle v Stockton

Back 1

Claimant sued for money lost after inability to dig tunnel due to defendant failing to repair pipe. Claim was for contractual loss, therefore not recoverable. Claimant could not show proprietary interest (he did not own any of the property)

Front 2

Hedley Byrne (negligent misstatement)

Back 2

Claimant was given a negligently produced financial statement upon which they based certain decisions subsequently causing them a loss. The disclaimer absolved the defendant of liability.

Front 3

Hedley Byrne Test

Back 3

1) Special relationship of proximity between the parties

2) Negligent statement from defendant (inaccurate/ untrue)

3) Claimant reasonably relies on the statement

4) Reliance was detrimental to the claimant

Front 4

Weller v Foot and Mouth

Back 4

No recovery for purely contractual interest. Defendant negligently allowed local cattle stock to become infected with virus. Claimant, cattle auctioneer, sued for financial loss. Claim rejected, there was no proprietary inters in the cattle

Front 5

Pure economic loss

Back 5

Non-recoverable. Worth incurred without any physical injury to any asset of the plaintiff. Subject of a claim for economic loss. (for example: Spartan Steel claim was for power cut therefore the rejected claim for money that could have been made was basically a claim for the power cut, whereas the claim for the wasted steel was injury to assets)

Front 6

Spartan Steel

Back 6

Defendants negligently cut power cable supplying power to claimant's factory. Claimant and to throw away molten steel, and lost profit on said steel. Also unable to operate for 14 hours. Claims for first two accepted as they were consequential economic loss. Claims for money not earned was rejected as this was pure economic loss. ALSO, claimant should have installed back up supply given their reliance on power and the likelihood of a power cut.

Front 7

Muirhead v Industrial Tank

Back 7

Claimant purchased tank from 2nd party and pumps from defendant. Voltage did not match therefore lobsters died. Claimant sued defendant for loss of lobsters and profit (consequential) as well as the cost of the pumps and repair (pure). The first two were accepted and the second two were rejected. Defective product economic loss left to contract.

Front 8

Aliakmon

Back 8

Proprietary interest necessary to sue for economic loss. Ownership of goods had not yet passed to the claimant (result of unusual contract where claimant possessed risk but not ownership) when they sued for damages to the goods, therefore the interest was purely contractual. Confirmed in Mineral Transporter

Front 9

Chaudhury v Prabhakar

Back 9

Claimant enlisted help of friend defendant to find him a car to buy. Defendant said that claimant need not have the car checked. The car turned out to be faulty. Claimant was entitled to recover loss. Dissent: makes social interactions unnecessarily hazardous

Front 10

James McNaughton

Back 10

List of factors to be considered with negligent statements:

1) Purpose for which the statement was made

2) Purpose for which the statement was communicated

3) Relationship between parties

4) Size of class to which plaintiff belongs (floodgates, Caparo)

5) State of knowledge of the adviser

6) Reliance by the claimant

Front 11

Murphy v Brentwood DC

Back 11

The defendant, relying on a negligent report, approved a building application. The house was bought by the claimant and the foundations cracked. The claimant sold for below the price he paid and sued for damages. The damages were apparent, not latent, therefore there was no recovery. Also, the pipes that were damaged as well as the house were manufactured/ equipped by the same group and therefore could be considered as an attempt to recover pure economic loss.

Front 12

Targett v Torfaen

Back 12

Distinguished from Muprhy. Claimant fell down negligently made stairs and injured himself. Court were not prepared to accept that the claimant should sell his home or vacate the premises based on such a minor defect.

Front 13

Spring v Guardian (duty)

Back 13

Employer is under duty to provide factual and accurate reference, that is not misleading

Front 14

Mutual Life (unreasonable reliance)

Back 14

Claimant relied on advice given by insurance broker on investment in subsidiary company. Claimant suffered loss and sued insurance broker. Claim rejected, the advisee should not reasonably have relied on the statement as the defendants were not in the business of giving investment advice

Front 15

Smith v Eric Bush (unfair terms)

Back 15

Surveyors negligently advised that house was without need of repair. Bank informed plaintiff to obtain independent advice also. Claimants sued after chimney collapsed. Defendants attempted to rely on liability clause but this was in breach of UCTA 1977, also house was modest and the average buyer should reasonably expect that a surveyor would perform his duty accurately.

Front 16

West Brom v El-Safty

Back 16

Doctor advised West Brom player to have surgery, surgery went wrong and West Brom sued for loss. Claim rejected, there was no relationship between the defendant doctor and West Brom. The doctor's duty of care was toward the player, he was employed under the BUPA scheme. Doctor's duty was not to advise club on player or financial affairs