Tort Law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB tort law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).
These were the best Tort Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest results in ...
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What is Pure Economic Loss?
Definition
Giliker: where loss is purely financial
Consequential losses are not pure economic loss
e.g. X suffers a facial injury owing to D negligently running him over with a car
X is a model
X now loses contracts and future contracts
This is not economic loss because it is a consequence extending from the personal injury
Only when Z suffers purely financial loss is this pure economic loss in law:
Suppose X is contracted the his agent Z
Z can no longer get money from X’s work, because X cannot work anymore
Z has suffered no personal injury nor property damage
She has suffered a purely financial loss
Her pocket has been hit
But nothing else has
Spartan Steel v Martin and Co [1973]:
D was a construction company near to SS’s factory, which was supplied by an electricity cable. D negligently severed that cable by not taking enough care, meaning the factory had to close.
The melt already in the furnace suffered damage
SS was allowed to claim for this loss AND the lost profits from the damaged melt
BUT factory had had to close down for 14 hours
Meaning 5 other melts could not be melted down
Thus, SS suffered lost orders from those 5 melts they could not melt down during the “down time”.
Lord Denning: SS can recover lost melt, but not the 5 others that weren’t damaged
Should be no liability for lost profits and PEL because
Nature of hazard
Loads of people suffer loss owing to things beyond their control – go and get on with it
Floodgates – desire to avoid crushing liability
Used to stop loads of claims happening
If claims for economic loss allowed for power shutdown, would be no end of claims
And no end of damages
Would be wasteful to investigate whether the claims were real or not
Risk of economic loss should be borne by whole community
Law provides for deserving cases where property damage occurred
Problems with the Denning Approach:
Hoyano:
PEL can be just as devastating to people as property damage
PEL can at least be compensated like for like (lost money for compensation money),
whereas personal injury monetary compensation often futile in the most serious cases
Lord Edmund Davies dissenting
Rather arbitrary line drawn
Between consequential losses and economic loss resulting from damage to property which C only has contractual interest
Essentially drawn on who actually owns the property damaged
Which may be minor
In comparison to who depends on the property damaged and therefore then suffers loss
Wouldn’t it be clearer to say that D is liable for PEL where it is reasonably foreseeable
Problem then is that is that “reasonably foreseeable” can extend very far and to large numbers of claimants.
The effect of policy on the rationale behind denying PEL
Giliker: Law should not undermine contract law
Consistency
Those who contract for the installation and maintenance of emergency generators
Have a contractual remedy if they then break down during a power cut
Would be inconsistent to give this remedy in tort when already available in contract
Nature of Tort and Contract
Contract is much more specific and also a voluntarily assumed obligation
Tort law is more general and imposes obligations upon people
Even when X does not know he owes an obligation to Z
Argument = protect economic interests by contract or tough luck
Problems with this way of thinking
Stapleton: why is contract a more desirable way of dealing with PEL?
Hoyano: Too simplistic analysis
Sometimes no opportunity to make a contract
Sometimes even when you have a contract C wants to use tort
Different limitation periods (tort more generous)
Different measure of damages
Escape route from contractual term excluding liability or capping damages
Cadazo CJ: Avoid Crushing...
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Tort Law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB tort law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).
These were the best Tort Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest results in ...
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