ECONOMIC LOSS IN TORT: IS THE PENDULUM OUT OF CONTROL?
| Published date | 01 March 1989 |
| DOI | http://doi.org/10.1111/j.1468-2230.1989.tb02817.x |
| Author | Peter Cane |
| Date | 01 March 1989 |
ECONOMIC
LOSS
IN TORT:
IS
THE PENDULUM
OUT
OF
CONTROL?
Between 1963 and 1965 Wates were employed to build a block of
flats on land owned by the Church Commissioners. Wates sub-
contracted plastering work to Hitchens. Hitchens failed to follow
the manufacturer’s instructions
in
applying the plaster, and as a
result,
in
the early 1980s, plaster started falling off the walls. A
considerable amount
of
remedial work was needed to put matters
right. In 1965,
D.
&
F.
Estates acquired the block of flats
on
a
long lease from
the
Commissioners; Mr and Mrs. Tillman, who
controlled
D.
&
F.
Estates, occupied one of the flats, apparently
under licence. The company sued Wates for the cost of remedial
work and “prospective
loss
of rent” while the work was carried
out, and the Tillmans claimed damages for disturbance.
The House of Lords decided, unsurprisingly, that the company’s
claims could not succeed.’ The
loss
suffered was purely economic,
arising out of a mere defect of quality which presented no danger
to the health or safety of persons and no risk of damage
to
property other than the plasterwork itself, which was the defective
item. Furthermore, on its facts, the case did not satisfy the very
stringent requirements for recovery for such
loss
laid down
in
Junior
Books
Ltd
v.
Veitchi
Co.
Ltd.’
The practical importance
of
the
case lies
in
the
fact that tenants under commercial leases are
increasingly being required to accept stringent repairing obligations:
and the fact that latent defects insurance is, as yet, relatively
difficult to obtain
in
Britain.‘ The real legal interest of the case,
however, lies not in the actual decision but
in
some of the wide-
ranging comments made by Lord Bridge of Harwich and Lord
Oliver of Aylmerton.
In
general terms, their Lordships have taken
a further large step
in
the current process of contraction in the tort
of negligence, at least
so
far as liability for economic
loss
is
concerned. The judgments also contain important indications of
the view which their Lordships take of the proper function of the
courts
in
developing
the
law of tort.
DOCTRINAL POINTS
1.
The reqiiirement
of
dumage
to
persoti or property
The most important general point emerging from the case is that
loss
arising from the acquisition of defective premises or chattels
will
in
future be recoverable
in
tort from the builder of the
premises or the manufacturer of the chattel only
if
it
consists of
1988
3
W.L.R.
36X.
119x31
A.C.
520.
S.
Tronions
(1987)
3
Cons1.L.J.
161.
‘
B.
Gloyn
(1987)
84
L.
S.
Gaz.
2034.
200
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