Economic Loss, 3rd Edition

Economic loss has expanded as an area of law as the courts have become more receptive to recognising the legitimacy of claims for "pure economic loss", as distinct from personal injury loss and property damage loss.

This work sets out, explains and comments on the complex principles applied by the Courts in economic loss cases. It is divided into ten themed chapters, starting with a general introduction describing the main elements of the liability. It moves on to deal with the broad categories in which questions concerning economic loss and duties of care in tort arise, with an explanation of the case law in each category. The final chapter deals with claims for economic loss where there is a contractual connection between the parties.

With a foreword by Lord Phillips of Worth Matravers

• Deals with situations in which one person's negligent act or omission causes another person to suffer a loss which is not to his person or his property, and where the relationship between them is usually non-contractual
• Sets out and comments on the principles applied by the courts in pure economic loss cases 
• Covers general themes and alternative approaches before dealing with the broad categories of situations in which questions concerning pure economic loss and duties of care in tort arise
• Discusses and analyses virtually all of the significant reported cases on this topic in England and the Commonwealth
• Examines the principles applicable to the imposition of, or the refusal to impose, duties of care where the claimant’s loss/injury is to his person or to his property; particularly in the field of product liability and in relation to the acts or omissions of statutory authorities
• Looks at the complex problem of the effect of the existence of a contract on the outcome of a pure economic loss duty of care claim in tort
• Presents General Principles in Volume One and Specific Applications in Volume Two
• Deals with very interesting cases, such as: 

1. a decomposing snail in a bottle of ginger beer
2. a night-watchman whose tea was laced with arsenic
3. lobsters that died in a tank before Christmas
4. a judge who said that there is no difference between a rodent and a gastropod
5. a typewriter factory whose keys were solidified
6. a Pentium III “ultimate media machine” which was anything but, one and a half dead flies in an unopened dispenser of purified drinking water
7. an advertising agency whose client failed to pay ‘as advertised’
8. a ship that sank after it was certified ‘good to go’
9. a tavern that lost business because a boat crashed into a bridge
10. two dead mice in two bottles of ginger beer
11. a gambler who was banned from buying too many lottery tickets
12. a trailer which became detached from a farmer’s Land Rover because the design of the coupler was deficient – was the manufacturer of the coupler liable for the dealer/retailer’s pure economic loss?
13. a garbage dump which could not burn the waste
14. a hotel which had to shut its cocktail bar
15. some bottles of a Bacardi mix which were not ‘a breeze’
16. a dredging operation that was too silty
17. a compulsive gambler who went to the dogs
18. an asbestos worker whose pleural plaques were not actionable
19. an auctioneer who was out-bid by foot and mouth disease
20. a potato farmer who was devastated by bacterial wilt
21. a railway company whose parapet walls were demolished
22. a lorry that collided with a fire hydrant, a building-owner who was out-negotiated by the Government
23. a set of accounts which had been certified as balanced but weren’t
24. a truck-driver who overshot a driveway, a soldier who shot his girlfriend’s lover
25. a house inspector who said “no responsibility” and the Lords who said ‘yes responsibility’
26. a home decorator who left the front unlocked when he stepped out to buy some wallpaper – did he cause the homeowner’s loss in the ensuing burglary?
27. a soldier who choked on his own vomit
28. some Borstal Boys who trashed some yachts
29. lots of houses with shaky foundations
30. a couple who lost $30m to a fraudster and almost got their bank to pay for it
31. an abattoir whose dividing wall was not high enough
32. an asset-freezing Order that didn’t, a factory-owner whose diesel storage tank’s tap did not have a lock
33. a video shop manager who was beaten up in the car park
34. a remand prisoner who died after a policeman left the wicket hatch open
35. four Kuwaiti commercial aircraft which were destroyed by Coalition aerial bombing in Iraq
36. a very honest patient with cauda equina syndrome
37. an asbestos worker who worked for several employers but could not say which of them caused his mesothelioma
38. a non-Hodgkin's lymphoma patient whose negligent doctor got off Scot-free
39. a wedding guest who died after eating ras malai that contained eggs
40. a swimmer who drowned in a pond that was contaminated with Weils disease.

What's New?

There are more than 400 new cases and more than 1,900 additional pages than in the second edition.  The scope of this (third) edition is broader than the second edition.  In addition to considering the duty of care question in relation to pure economic loss and economic loss that is not pure economic loss (i.e., consequential economic loss), this edition also deals with the analytical framework for determining whether a duty of care in the tort of negligence is appropriate in cases where the plaintiff’s loss/injury is to his person or to his property. 

There are new and/or expanded sections dealing with topics like –

• Causation
• Remoteness of loss
• Foreseeability
• Proximity
• The scope of a duty of care
• The composite approach
• Assumption of responsibility
• The Hedley Byrne principle
• The current test
• Reflective loss
• The relaxation of the relational pure economic loss exclusionary rule
• The rule in The Albazero
• The Panatown broad basis of liability
• Public authority liability
• Concurrent liability in the context of a construction contract

In addition, there is expanded coverage of the pure economic loss position in Australia, Canada and New Zealand and, to a lesser extent, in the USA.

These topics are dealt with directly. The question of whether the defendant breached his duty of care by acting (or omitting to act) below the standard of care required of him in the circumstances is dealt with indirectly. Essentially, therefore, this is a book about the common law tort of negligence with special reference to cases of pure economic loss. Here you will find answers to such conundra as:-

• Once the case is identified as falling within the Hedley Byrne principle, there should be no need to embark upon any further enquiry whether it is "fair, just and reasonable" to impose liability for economic loss. (Lord Goff in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145)
• I do not accept the submission that, once a Hedley Byrne situation is identified, the answer has to be in the claimant's favour. (Sedley LJ in Dean v Allin & Watts [2001] 2 Lloyd's Rep. 249)
• Whether a duty can exist and whether a duty does exist are different kinds of questions, and it seems to me that the law gives different kinds of answers to them. (Lord Clyde in Phelps v Hillingdon London Borough Council [2001] 2 AC 619)
• Lack of causation is often used as an explanation as to why the scope of duty is limited, while the converse is not true. (Evans-Lombe J in Barings Plc (In Liquidation) & Anr v Coopers & Lybrand (No.4) [2002] 2 BCLC 364)
• It seems to me problematical, with respect, to try to explain remoteness in terms of foreseeability. If anything, it is foreseeability which has to be explained in terms of remoteness. (Sedley LJ in Spencer v Wincanton Holdings Ltd [2010] PIQR P8)
• "Unreasonable" is a protean adjective. (Sedley LJ in Spencer v Wincanton Holdings Ltd [2010] PIQR P8)
• ‘Causation’ and ‘remoteness’ are two epithets which describe the same process of legal decision making. (Aikens LJ in Spencer v Wincanton Holdings Ltd[2010] PIQR P8)