Economic Losses in Negligence

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  • Economic Losses in Negligence
    • Two Types of Loss
      • Consequential Economic Losses
        • Losses that stem from physical damage to property itself
        • Actionable
          • Losses that stem from physical damage to property itself
      • Spartan Steel Ltd v Martin [1973]
        • Consequential Economic Losses
          • Actionable
          • Pure Economic Losses
            • Losses which do not arise from physical harm
            • Non-Actionable
              • Losses which do not arise from physical harm
              • Limiting factor so that defendants do not face "crushing liability" per Lord Denning at 36
                • Also if it is a loss which could've been covered by insurance you are less likely to receive compensation
        • Pure Economic Losses
          • Non-Actionable
            • Limiting factor so that defendants do not face "crushing liability" per Lord Denning at 36
              • Also if it is a loss which could've been covered by insurance you are less likely to receive compensation
      • 3 Principles of Economic Losses
        • 1. Economic Loss is generally not recoverable where it would undermine contractual intentions
          • More economically efficient to allow parties to contractually stipulate where losses fall
          • Freedom of contract is there to allow parties to balance quality vs price
        • 2. Defective Property loss is not recoverable in Tort
          • Muirhead v Industrial Tank Specialists  [1986]
          • Exxceptions:
            • Can recover for an injury caused by defect if it is unreasonable to expect C to have fixed it himself - Targett v Torfaen BC [1992]
            • Can recover where the defect could cause a harm to a third party - Murphey v Brentwood LBC [1991]
        • 3. No recover if C has no propriety interest in damaged property
          • Cattle v Stockton WaterWorks [1875] "flooded tunnel" case
      • Negligent Misstatement
        • Hedley Byrne Principles - Two Stage Test (Hedley Byrne v Heller [1964]
          • 1. "SR that leads to a voluntary assumption of responsibility"
            • SR generally means business connection - unless a friend acting as an agent - Chaudry v Prabhakar 1988
            • D does not have to be in business of giving advice but see reasonable reliance - Esso v Mardon [1976]
            • Cannot sue for harm caused to someone else - WBA FC v El-Safty [2005] and dislcaimers are subject to the S 11 Unfair Contract Terms Act 1977 reasonableness test
            • D must've known or reasonably be expected to know that C was relying on him
              • 2. There was Reasonable Reliance by the claimant
                • Reliance must be reasonable:
                • Must actually take place - a second opinion shows it hasn't - Barclays Bank v Customs and Exercise [2006]
          • 2. There was Reasonable Reliance by the claimant
            • Reliance must be reasonable:
            • Must actually take place - a second opinion shows it hasn't - Barclays Bank v Customs and Exercise [2006]
      • Will Drafting Cases
        • A solicitor drafting a will owes a DoC to it's intended beneficiaries - White v Jones [1995]
          • But there is no liability if the mistake can still be rectified - Hemmens v Wilson Browne [1993]
            • Will Drafting Cases
              • A solicitor drafting a will owes a DoC to it's intended beneficiaries - White v Jones [1995]
                • But there is no liability if the mistake can still be rectified - Hemmens v Wilson Browne [1993]

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