The Gazette 1989

GAZETTE

MARCH 1989

Defective Building Work:

Who should pay?

Part 2

The Policy Implications

Lord Bridge's analysis provokes

several observations. First, and

most fundamentally, its policy

preference should be identified and

assessed. Lord Bridge commits

himself to the principle that a

person who has been put to

expense in protecting himself, his

family, his business and his

employees, or his property, from

the danger of injury or damage

brought about by the defendant's

negligence should have no right of

action in tort against the defendant

on account of that negligence. This

is surely a principle that contradicts

conventional norms of justice and

that, if it is to be accepted, should

be supported by a clear and com-

pelling argument. Yet what Lord

Bridge offers fails both these tests.

Few people would be impressed by

the suggestion that, because the

loss (on Lord Bridge's analysis) was

purely economic, the plaintiff

should on that account be defeated

without further consideration of

the issue. Of course it is true that,

in every common law jurisdiction,

courts have been wary about

recognising broad principles of

liability in negligence for pure

economic loss, but prior to

D. & F.

Estates

it seemed that there were

at least some circumstances in

which recovery for this type of loss

should be allowed.

Hedley Byrne

was an obvious instance;

Junior

Books

another (before it was dis-

tinguished into oblivion by

D. & F.

Estates).

The attempt to obliterate

Junior Books

should not prevent us

recalling how that decision, in

reaching its conclusion, relied

strongly on the premise that there

is (and should be) liability for

negligently causing a person to go

to expense to prevent injury to the

person or property. Lord Roskill

observed that Laskin, J/s dissent-

ing judgment in

Rivtow Marine

was

"powerful".

Accepting that the costs incurred

in preventing injury to oneself or

one's property should be char-

acterised as "pure economic loss",

this is nonetheless an odd and

distinctive species of such loss.

That it should merit compensation

would in no way compromise the

courts in their general strategy of

treating claims for pure economic

loss gingerly.

The idea that economic costs

incurred in preventing injury to

others from a dangerous defect

should not be recoverable in a tort

action offends common sense. As

Andrew Grubb

observes, "it

would be unfair to require the

William Binchy, B.L.,

Research Counsellor,

Law Reform Commission.

plaintiff, knowing the defect, . . . to

sit back and wait for an accident to

occur for which he would be liable,

to discontinue use of his property

or else to do the repairs at his own

expense because he had no cause

of action". This comment makes it

plain that separate policy con-

siderations apply in regard to the

different types of cases of pre-

vention of injury: preventing injury

to others (whether or not one is

under a prior legal duty to do so)

raises separate questions from pre-

venting injury to oneself; and

certainly

the

notions

"endangering" and "injuring"

property, in contrast to causing a

"non-dangerous" defect, need

closer examination than the British

decisions have yet given them. Yet

D. & F. Estates Ltd.

offers no

significant insights on any of these

questions. Nor does the case

address the legal position of a

person who acquires a product

which he later discovers is

dangerous. If he uses it and it

injures him, is he to be regarded as

having been guilty of contributory

negligence?

(The proviso in that

paragraph as to "unjust enrich-

ment"

might

save the day for the

plaintiff, however; moreover,

bringing the defect to the attention

of the vendor or manufacturer

could help his case.

If the product

injures another person, should the

doctrine of

novus actus inter-

veniens

apply?

A Glance Towards Europe

Lord

Bridge's

notion

"atomising", as it were, the con-

stituent elements of complex

structures or chattels is not new.

Article 2 of the European Products

Liability Directive defines "pro-

duct" as including movables

incorporated into other movables or

into immovables.

Article 9 of the

Convention excludes from com-

pensation

damage to, or

destruction of,

the

defective

product itself.

The effect of

D. &

F. Estates

is to go a long way

towards incorporating into the

common law actions in negligence

the limitations inherent in the

Directive. This is likely to be good

news, by and large, for British

manufacturers but emphatically

bad news for British consumers.

Prevention Costs or

Damages for Self-

Destructing Product?

Lord Bridge's analysis suffers from

a confusion of thought in its inter-

meshing of two quite separate

principles. The first is that the cost

of preventing threatened injury

(whether to the product itself, to a

person or to other property) is a

pure economic loss which as such

should not be the subject of com-

pensation in tort. The second is

that there should be no compensa-

tion in tort for the destruction of a

product, resulting from the

defendant's negligence, where no

other damage has been caused. An

adherent to the latter principle

could comfortably decline to

compensate a plaintiff whose claim

was based on the prevention of

damage to the product: if no

liability should accrue for causing