100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Summary Negligence - Economic Loss PQ Notes (First Class) $3.98   Add to cart

Summary

Summary Negligence - Economic Loss PQ Notes (First Class)

 56 views  0 purchase
  • Course
  • Institution

Comprehensive first class Tort Law PQ notes from University College London (2010/2020). Notes include concise case summaries, key reasonings to reconcile conflicting case law and detailed answer outlines to problem questions

Preview 2 out of 13  pages

  • October 29, 2020
  • 13
  • 2019/2020
  • Summary
avatar-seller
Negligence: Duty of Care for Economic Loss


a. Not tested for Essay, only PQ
Introduction
 Negligence is concerned with physical harm to person and property  can be quantified in
terms of economic loss
 Consequential economic loss: Loss that arises from physical harm to your person or
property
 Pure economic loss: Either no physical harm caused, or physical harm caused on third party

 General rule: No duty of care for pure economic loss (Spartan Steel)  subject to exception
where duty of care arises if D voluntarily assumes responsibility for C’s economic welfare
(Hedley)


b. Justifications for the Rule
 Canadian National
o AF: Economic loss is an inevitable by-product of desirable but inherently dangerous
activity  fair to distribute the costs amongst all who benefit

o AF: Contractual allocation of risk
 Persons who stand to suffer economic loss can allocate such risks
appropriately within their contracts  should not be able to claim for pure
economic loss

o CA: Insurance argument
 D is in a better position to predict economic loss  more able to obtain
cheap insurance
 This incentivises them to take less care (eg. cheaper for builder to dig without
checking for cables)  reduced care leads to higher risk of accidents
 But C is unlikely to find general insurance against loss of profit  would raise
problems of moral hazard
 Unfair that D is much more well-insured than C  C should be able to claim

c. Distinction between pure economic loss and consequential economic loss

Spartan Steel
o C manufactures in a factory, and D damaged a cable  cut off electricity in factory
o C claimed the following losses
o Ruined metal in the furnace (physical damage to property)
o Loss of profit on the ruined metal (consequential economic loss)
o Loss of profit they expected to make by using the furnace during the period when
electricity was off (pure economic loss)

, Negligence: Duty of Care for Economic Loss



o Held that D owes a duty of care in respect to physical damage to property and
consequential economic loss, but not pure economic loss

o Rationale (Lord Denning)
o Risk of economic loss should be suffered by the community as a whole
o Nature of the hazard (losing electricity) is something that people should have to
put up with

o Floodgates argument (Justice Cardozo)
o Liability would be in an indeterminate amount, for an indeterminate time, and an
indeterminate class  no boundary for who can claim

o Counters (Davies LJ)
o Absurd results will be removed by causation and remoteness
o Duty of care might not be found in the first place because of the general
negligence rules which apply

d. Pure Economic Loss for Defective Products
 Conflicting case law starting from Ann, now overruled by Murphy

Dutton
o C bought house that had defective foundations  sued local authority for negligently
approving the building
o Lord Denning: Case is about physical damage to property  duty of care is owed

Anns
o Foundations in C’s house were defected and caused cracks in the walls  sued local
authority for negligently approving building
o HoL stated that it was physical damage to property  duty of care is owed
o Necessary to avoid present or imminent danger to the safety of the occupant

o Criticism: Property is defective, meaning that property is worth less than C thought. But
defective property did not harm other physical goods  no physical damage to other
property
o Court used complex structure argument  foundation is a separate entity from the
walls  foundation has damaged the walls

e. Subsequent Case Law Development

Murphy

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller firstclasslawnotes. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $3.98. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

84866 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$3.98
  • (0)
  Add to cart