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Economic Loss Caused By Negligent Activities Notes

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Economic Loss caused by negligent activities The Traditional Approach

Only where losses are consequential o E.g. personal injury, property damage
? As a result a defect

Can there be recovery

Giliker: where loss is purely financial o i.e. because defect in house is discovered
? then this is PEL and can't be recovered. Extension of the Principle?

Giliker: decision in Anns meant that property damage was re-characterised (has now been overruled) o Lord Wilberforce:
? House should be treated as a chattel

Therefore, defects in house o As well as (established rule) damage caused to property by consequences of a defect
? Would BOTH be liable and grounds for a suit Principles of Modern Law

Economic loss not recoverable in tort where no contract exists between parties in absence of UCTA or sufficient proximity. o Muirhead v Industrial Tank Specialists [1986]:
? C reared lobsters in tanks, pumps preserved health of lobsters by pumping in sea water, intended to make a profit on them by buying them cheap and then selling them at Christmas for more.
? Lobsters died owing to D's negligence when powers cut out

Goff LJ: Dead lobsters = physical damage. o Therefore, C can claim from D (manufacturer) any loss owing to the damage
? i.e. loss of profits selling them on. o BUT can't recover cost of the pumps/trying to fix them.
? Cos D lacks a sufficiently proximate relationship between himself and manufacturer.


This means that "Defective product economic loss" without contract is not recoverable o D and F Estates Ltd v Church Commissioners [1989]: C were the leesee and occupiers of a flat in Chelwood House owned by D. D had built house using sub contractor (X) who turned out to have negligently plastered. C sued X for recovery of the loss.
? Lord Oliver: no such thing in English law as transmissible warranties of quality

If you don't have a contract with them, you cannot sue them.
? Lord Bridge

Difference between "latent" defects and "apparent defects". o With latent defects, when the negligent construction causes damage to property or persons X can sue

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