Compensation for economic losses arising from physical injury or damage to property.
"Pure economic loss"
"Pure economic loss"
Pure economic loss is financial damage suffered as the result of the negligent act of another party which is not accompanied by any physical damage to a person or property, only recoverable if there is a special relationship.
E.g. you purchased a toaster for £25. Due to negligence in the manufacturing process, it exploded and set fire to your house:
Negligence damages would be awarded for losses sustained to property in the house, losses resulting from smoke inhalation, but the £25 purchase price would not be recoverable as this is pure economic loss
Remoteness of damages
For damages to be recoverable, they must be of a type that is "reasonably foreseeable". E.g. a loss/damage/type of injury that a reasonable person would have foreseen.
The Wagon Mound case (1961)
Due to defendant's negligence, oil spilled into the claimant's wharf.
Oil caught fire, causing serious damage to the wharf.
Held: fire damage was not reasonably foreseeable.
Egg-shell skull principle or take your victim as you find them
If the type of the damage is reasonably foreseeable the defendant is liable.
The severity of the damage or injury is irrelevant.
Defences to a claim in negligence
Contributory negligence - partial defence
Volenti non fit injuria - complete or outright defence
Exclusion clauses - complete or outright defence
Contributory negligence
Where a claimants own negligence contributes to some of his injuries - a judge will reduce the level of damages awarded.
This is partial defence
The onus is on the defendant to show the claimant was at fault for some of their own injuries
Sayers v Harlow (1958) - Women trapped in public toilet fell and injured herself trying to climb out
Volenti non fit injuria
"To a willing person, no harm is done"
Principle:
If someone freely consents to being placed at risk, they cannot then sue if they get hurt.
Volenti non fit injuria - ICA v Shantwell (1964)
Two brothers, employed by ICI, were certified and experienced in wiring up and checking the safety of some explosives.
They tested some explosives without observing strict safety rules, they claimed damages against the employer.
Held: by their conduct the brothers consented to the risks of their actions and therefore volenti applied.
Exclusion clauses
A valid exclusion clause constitutes a viable and complete defence against an action for negligence.
Must be validly incorporate/made clear to the customer.
Under Unfair Contract Terms Act, it must be reasonable/fair.
UCTA - term which excludes liability for death or personal injury caused due to negligence is invalid.
Hedley Bryne v Heller & Partner.
Law of tort
Type of civil wrong i.e. a breach of a legal duty or infringement of a legal right that gives rise to a claim for damages.
A legal duty must exist.
Examples = trespass, slander, libel, defamation, nuisance etc.
Difference between tort and contract?
Usually in torts the parties have never met or agreed that they owe each other a legal duty
Can have both - claimant can choose appropriate remedy in event of a breach.
Negligence
Example of a tort
It is the breach of legal duty to take care, which results in damage to another.
3 elements of negligence
An action for negligence will succeed if the claimant can prove:
A duty of care was owed to them by the defendant, and
The defendant breached that duty, and
As a consequence of the breach, damage or loss was suffered.
Duty of care
There is a duty to take reasonable care not to cause foreseeable harm to foreseeable victims.
Breach of duty of care
Burden of proof - the claimant must prove the defendant acted carelessly
Sometimes impossible to prove or too distressing to go through
Can be obvious there has been carelessness by the defendant, because there is no other explanation for how the injury or incident occurred. Known as "res ipsa luquitur" principle.
Standard of care - what does "careless" mean?
Basic principle
Required standard of care that of a "reasonable person"
"Reasonable" the ordinary person on the street, not expected to be skilled in any particular trade of profession.
The standard of care is higher where there is a greater risk of injury, or where the claimant is more vulnerable.
Lack of training or expertise does not reduce the standard of care.