1. Special cases of negligence
Unit 87

2. Limits on negligence claims
Judge Cardozo evoked the risk of negligence law creating unlimited liability:
"liability in an indeterminate amount, for an indeterminate time, to an indeterminate class."
To avoid this the courts have found it necessary to place limits on negligence claims.
Today we will look at two areas where those limits apply – economic loss and psychiatric injury.

3. Economic loss

4. Pecuniary loss in negligence
Consequential economic loss: an economic loss suffered as a direct result of another harm (personal injury / damage to property) caused by D’s negligence
e.g. lost earnings following injury, cost of repairing a car after a crash
recoverable
Pure economic loss: a purely financial loss stemming directly from D’s negligence
generally not recoverable
There are different types of loss in negligence
Pecuniary loss is loss which is financial in nature, meaning that it can be mathematically calculated (as opposed to non-pecuniary loss which refers to things like pain and suffering, which cannot be calculated mathematically
There are two types of pecuniary or economic loss
The first is consequentiql economic loss >
Consequential economic loss: an economic loss suffered as a result of another harm (personal injury / damage to property) caused by D’s negligence
e.g. lost earnings following injury, cost of repairing a car after a crash
This is recoverable
There is also
Pure economic loss: a financial loss stemming directly from D’s negligence > which does not involve damage to property or injury
Eg John is stuck in a traffic jam as a result of the bus driver’s negligence > as a result he gets to work late and misses out on making an important sale
He has suffered an economic loss as a result of the neglisgence, but he has suffered no injury or damage > pure economic loss > can he make a claim? NO
generally not recoverable in negligence

5. Negligent misstatement: an exception
However, C can recover damages for a negligent misstatement leading to pure economic loss (Hedley Byrne v Heller [1963])
Requires that:
a special relationship of trust exists between C and D
there is a voluntary assumption of risk by D
C reasonably relied on D’s statement
However there is an exception to this rule – PEL can be claimed in if there is a negligent misstatement
This formulation is slightly different to the one in the book,
This was established in (Hedley Byrne v Heller [1963])
For the claimant to be able to make this kind of claim, there are certain requirements
special relationship of trust between C and D – most often a advisor or expert with specialist knowledge and C is a client, or someone seeking professional advice
voluntary assumption of responsibility of D) > assumed the risk that C would act of their advice or statement (explicit or implied)
C reasonably relied on D’s statement = took action based on the advice given, and it was reasonable for him to do so
overlap .
What is the standard of care required of an advisor? – reasonable expert

6. Esso petroleum Co v Mardon [1976]
An Esso employee, whose job was to assess the potential output of petrol stations, advised Mr Mardon that a specific station would sell at least 300,000 gallons of petrol a year.
Relying on this advice, Mr Mardon leased the station, but sold only 78,000 gallons in 15 month.
Pure economic loss
A special relationship existed (the employee was an expert)
The employee had undertaken a responsibility to Mr M
Mr M reasonably relied on his advice
Mr M could recover his loss
An Esso employee, whose job was to assess the potential output of petrol stations, advised Mr Mardon that a specific station would sell at least 300,000 gallons a year.
Relying on this advice, Mr Mardon leased the station, but sold only 78,000 gallons in 15 month.
Mt Mardon has lost money, but it’s a Pure economic loss > Can he claim???
A special relationship existed > the employee was in a position of trust
The employee had undertaken a responsibility to Mr M based on his expertise in this market > accpeted the risk that Mr M would act on his statement
Mr M reasonably relied on his advice
Mr M could recover his loss > presuming that he coulmd prove that the advise was actually negligent. What standard would be used to decide if advice was negligent? Reasonable expert
Remember this is an exception, most of the time PEL can’t be claimed in negligence

7. Psychiatric damage

8. Claims for psychiatric harm
The injury suffered as a result of D’s negligence must amount to a recognised psychiatric disorder
The claimant must qualify as a primary victim or a secondary victim
The second area we’ll look at where quite strong limits are in place is psychiatric damage
What is psychiatric damage? Psychiatric disorder suffered as a result of a traumatic experience cased by the D’s negligence
In order to claim there are two conditions
The injury suffered must amount to a recognised psychiatric disorder, long-term; results from the shock of the incident (not just grief or sorrow, but depression, post traumatic stress syndrome ) –
2) The claimant must fall into a category of persons entitled to claim – there are two types of potential claimant – primary and secondary victims

9. Primary victims: psychiatric harm
present at the scene, and
suffered physical injury as a result of D’s negligence, or
reasonably feared himself to be at risk of physical injury
A claimant Can claim fpr psychiatric harm as a primary victim if
He was present at the scene
himself injured or at risk of injury
As in the case we saw last week, the employee suffered physical injury in an accident at work due to the employer’s negligence, so the employer was also liable for his depression, the psychiatric injury which arose from his physical injury
Can also claim as a primary victim if he was present at the scene
Reasonably feared himself to be at risk of physical injury: eg a claimant who is in a car accident, who was obviously in danger but actually suffered no physical injury. He will still be able to claim for psychiatric damage which arises as a result of the accident
For a primary victim: Psychiatric injury does not need to be foreseeable (an extension of the egg-shell skull rule) > what does that say (If type of damage was foreseeable then D liable for full extent of damage even if much wprse than wold normally be expected fur to particular fragility of victim)
HERE IT MEANS if physical injury is foreseeable, for example in an accident at work, the D is also liable for physhiatric injury, even if that only arose because the C was particularly fragile
Psychiatric injury does not need to be foreseeable
an extension of the egg-shell skull rule

10. Page v Smith [1996]
The claimant’s car was involved in a minor road accident caused by the defendant’s negligence.
The claimant suffered no physical injury, but the accident triggered a recurrence of his ME (chronic fatigue syndrome).
Can the claimant recover damages in respect of the psychiatric harm suffered?
The claimant’s car was involved in a minor road accident caused by the defendant’s negligence. > ordinary person would not have caused any psychiatric harm
The claimant suffered no physical injury, but the accident triggered a recurrence of his ME (chronic fatigue syndrome).> medical condition he suffered from already but which was in remission
Can the claimant recover damages in respect of the psychiatric harm suffered?
YES – he meets the criteria

11. Secondary victims: psychiatric harm
Suffer psychiatric injury as a result of witnessing someone else being harmed or endangered
law is “a patchwork quilt of distinctions which are difficult to justify” (Lord Steyn)
Principles used today established in Alcock v Chief Constable of South Yorkshire Police [1992], a case resulting from the Hillsborough disaster.
The second type of potential claimant in relation to psychiatric injury is a claimant who will qualify as a secondary victim
Suffer psychiatric injury as a result of witnessing someone else being harmed or endangered
Law in this area is not always logical and sometimes difficult to defend.
law is “a patchwork quilt of distinctions which are difficult to justify” (Lord Steyn)
Principles used today established in Alcock v Chief Constable of South Yorkshire Police [1992], a case resulting from the Hillsborough football disaster.
You may have heard of this, happened in 1989.
Due to police negligence, there was a very serious crush at a major football match. Because a major football match, televised live.
96 deaths, 400 injuries and potentially thousands of claims from secondary victims who were present in the stadium or who were watching the live coverage on television, who lost loved ones and who suffered psychiatric harm as a result.
The only way to understand the logic of the rules is to accept that they emerge from the need to draw the line somewhere.

12. Secondary victims: psychiatric harm
A secondary victim:
close tie of love or affection with a primary victim
proximity in time and space
present at the scene or the immediate aftermath
saw/heard the incident with his own unaided senses
a single traumatic event caused the injury
reaction was that of a person of reasonable phlegm and fortitude
has a close tie of love or affection with a primary victim > spouses, parents, children this is presumed, in other case such as brothers/sisters or friends, have to prove that they have a tie which is equivalent to that of spouses or parents/children > means that a claimant whose two brothers died at Hillsborough, who was himself at the ground, and witnessed the events knowing that his two brothers were in the stand, could not claim since he had only normal brotherly love for his brothers.
proximity in time and space
present at the scene or the immediate aftermath (period afterwards > has in the past allowed for a claim by someone who found her family at the hospital after a fatal accident before they received medical attention, but today more likley to be limited to someone who for example comes across an accident in the street a couple of minutes later
saw/heard the incident with his own unaided senses > not through tv or radio
a single traumatic event caused the injury (witnessing a car accident would meet this requirement, but watching a child die as a result of negligence over 14 days does not)
reaction was that of a person of reasonable phlegm and fortitude
How does this compare to primary victims? > for secondary victims, pyschiatric harm but be a reasonably foreseeable consequence of the negligence, if the claimant is particularly mentally fragile, and suffers harm where an ordinary person would not, they would not recover damages.