Tort Law (Economic loss)

Tort Law (Economic loss) - Negligence Recovery for economic...

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Negligence Recovery for economic loss In general, there was a rule against the recovery for pure economic losses. There are three exceptions: a) Economic loss arising from defects in property b) Economic loss arising from negligent misstatements c) Economic loss arising from professional services Pure economic loss is distinct from consequential/relational economic loss which flows from some sort of property damage or personal injury Co (1972) (During a cut in electricity, ore in a smelt was damaged) Held: Losses arising from property damage (the ore) could be claimed but not pure economic losses (the smelts P could have run). Cattle v Stockton (1875) Relational economic loss was not claimable. Where a 3 rd party negligently does an act to A or his property resulting in pure economic loss (but no physical loss) to B. B cannot claim for his losses. Reaffirms Cattle . Plaintiff could not sue the shippers, because they did not own the goods at the time of damage (relational economic loss). a) Economic loss arising from defects in property English Position Anns v Merton LBC (1978) HL (Lessees sued local authority for the cost of remedying defects in foundation of property) Held: Defects were a potential danger to the health and safety of the occupiers. Plaintiffs entitled to recover. 2 stage test of proximity and policy consideration. Damages recoverable include all those which foreseeably arise from breach e.g. amt of expenditure necessary to restore the dwelling to a condition in which it no longer poses a health/safety threat and possibly expenses arising from displacement Junior Books Ltd v Veitchi Ltd (1983) HL (Ds were subcontractors nominated by main contractor’s architect to lay the floor. The floor was uneven, posed no danger or risk but owners sued subcontractors for cost of replacing floor.) Held: Plaintiffs entitled to recover. Applying the 2 stage test: (1) D owed a restricted duty of care to P because Ds were professionals, had been nominated, were relied upon, and were in a near- contractual relationship with P. P was a foreseeable victim. (2) No policy considerations against recovery NB: this decision is restricted to the special facts of the special proximity between P and D D & F Estates Ltd v Church Commissioners for England (1988) HL
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(D builders employed a subcrontactor to carry out plastering work. Ps were lessees and occupiers of block of flats. 15 years later, they found plaster in their flat was loose and sued builder for cost of remedial work) Held: This was pure economic loss NOT recoverable in tort. Lord Bridge differentiated b/w (1) product which causes injury or damage to property other than itself → liable in tort (2) a product which is dangerously defective where the defect is discovered before damage is caused → economic loss recoverable in contract by buyer or hirer, BUT not recoverable in tort by remote buyer or hirer of chattel This principle applied to damage to property, ruling out possibility of ‘preventive damage’. Also distinguished b/w complex and simple structures. IN complex structure, each part of the
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This note was uploaded on 02/07/2012 for the course LGST 101 taught by Professor Hsu during the Spring '11 term at Singapore Management.

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Tort Law (Economic loss) - Negligence Recovery for economic...

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