Economic Loss in Negligence — The 1989 Cases
| DOI | http://doi.org/10.1111/j.1468-2230.1990.tb01818.x |
| Published date | 01 May 1990 |
| Date | 01 May 1990 |
CASES
Economic
Loss
in Negligence
-
The
1989
Cases
Andrew
Huxley
*
Fifteen years ago, important cases in negligence were
as
rare as diamonds, and case notes
could dwell lovingly on each of their facets. In the last few years they have become as
common as muck, and this note can only cast a cursory pitchfork over the latest
wheelbarrowful. Could legal philosophers tell
us
why the tort of negligence has become
so
unstable? Has global warming caused a bulge in the grundnorm? Has the breakfast
menu in
the
Court
of Appeal canteen been changed? Have Several Wrong Responses become
preferable to One Right Answer? Meanwhile the tort student is faced with a more pressing
problem: her latest edition of Winfield, ,which hit the shops last October, is already out
of date.
I
shall first summarise ten of last year’s cases, which conveniently fall into four
groups. Then I examine them
en
bloc,
to
reveal the Court of Appeal’s latest conceptual
fashions in expounding
[l]
the test for
a
duty of care and
[2]
the relationship between
Hedley Byrne
I
and
Donoghue
v
Stevenson.
Ten
Economic
Loss
Cases
In
Reid
v
Rush
&
Tompkins3
and
Van Oppen
v
The Bedford Charity Trustees4
both
plaintiffs suffered serious physical injury, respectively in a car crash in Ethiopia and a
school rugby match in England, but were unable to recover in a negligence action against
the perpetrator. Redefining their problem as economic loss (‘We were uninsured’) rather
than physical injury (‘Ouch
-
that hurt!’), they
sued
the defendants for failing to take
out insurance on their behalf, or alternatively for failing to advise them to take out their
own insurance. The defendants owed the plaintiffs well-established duties of care in relation
to physical injury, arising out of the master-servant relationship in
Reid
and the school-
pupil relationship in
Van Oppen.
But the plaintiffs lost. The Court of Appeal decisions
emphasise that establishing a duty of care
to
avoid causing economic loss, whether in
tort or by contractual implied terms, is difficult, and the admitted existence of a physical
duty of care between the parties does not make the task much easier. The plaintiffs’
difficulties were all the greater because they were complaining of nonfeasance rather than
misfeasance. When Mr Reid was hired in England to act
as
quarry foreman in Ethiopia,
the question of insurance was not
raised
at all. Both master and servant could claim ignorance
of
the
risks, though no doubt the master was in a better position to find out about them.
Similarly neither Master Van Oppen nor his parents had
any
conversations with the school
about insurance cover. The school, however, could not plausibly claim ignorance of the
risk, for it had received a circular fifteen months before the accident from the Medical
Officers
of
Schools Association which urged them to insure rugby playing schoolboys
in time for the next -on. Nine months after
the
accident the school took out such insurance.
Van Oppen’s claim was that the school’s delay in implementing the circular amounted
*Lecturer in
the
Laws
of
SE Asia, SOAS, University
of
London
1
[1964] AC 465.
2 [I9321 AC 562.
3
[I9891 3 All ER
228.
4 [1989] 3
All
ER 389.
5
[1989] 3
A11
ER 628.
The Modem Law Review
53:3 May
1990
0026-7961
369
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