Economic Loss


Consequential financial loss

Spartan Steel v Martin & Co

  • Claimants were without electricity until the board was able to repair the cable
  • The owners of the factory brought proceedings seeking compensation for the physical damage to their factory, the consequential economic loss arising from that damage and also pure economic loss

Liesbosch Dredger v ** Edison

  • A collided with B
  • A needed to continue work to avoid a penalty under a contract - the cheapest way was to buy a new dredger which was much more expensive
  • This was too remote and A was only entitled to the damages they would have got if they had been able to buy a new dredger.
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Relational financial loss

Simpson v Thompson

  • Shows the concern of judges that allowing people to claim for pure economic loss might lead to an excessive number of claims being brought
  • 2 ships owned by the same person, collided, and the underwriters who had insured the ship sought to collect from each other for their losses

Weller v Foot and Mouth Disease Research

  • The judge limited the 'floodgates' of massive claims by using the concept of proximity and duty

Pride v Institue for Animal Health

  • Court held there was no duty of care. Allowing the claim would create indeterminate liability for D, if C were allowed to succeed that would 'also give rise to a corresponding duty of care to any livestock farmer in Great Britain.'
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Defective Buildings

Junior Books Ltd v Veitchi Co Ltd

  • The cout allowed the factory owners to recover on the basis that there was a sufficient proximity between the owners and the sub-contractor to create a duty to prevent economic loss
  • The factory owners had relied on the sub-contractor's skill and expertise

D&F Estates Ltd v Church Commissioners for England

  • The builders were not liable because the court felt that the damaged part was essentially the same as the part that contained the defect
  • Question for the courts to decide whether there could be liability where one part of a building caused damage to another part

Murphy v Brentwood DC

  • Involved a house that had been built with a faulty foundation, leading to a drop in the value of the house
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