Types of Damages Flashcards
Muirhead v Industrial Tank
Manufacturer sold electric pumps that he knew were to be used in the United Kingdom. He installed them in M premises to pump seawater in lobster storage tanks. They were cut out because they were not suitable for use in the UK. The lobsters subsequently died.
Court of Appeal: manufacturer was liable in negligence to M because there was some loss that was suffered to him. Any costs associated with trying to make them work were pure economic losses and were therefore not recoverable on this basis.
Aswan Engineering Establishment v Lupdine Ltd
C purchased liquid waterproofing from the defendant which was contained in heavy duty plastic pails. They were left out in the sun in a hot country and hit high temperatures and this ruined them.
Held:The ‘usability test’: a business to business contract. the test asks if a reasonable user could have used the goods under the purposes of which they are commonly supplied. There was no breach of s.14 as a result and it was the extreme conditions that caused the melt. A reasonable user could have used them without incurring damage.
Aspen Insurance UK Ltd v Adana Construction Ltd
the Court of Appeal provided useful commentary on the interrelationship between the two where a contractor creates an object on site which is subsequently at the centre of a third party loss.
The Court of Appeal: What Adana had created ( crane base), was not a “Product” as defined by the policy. The definition of “Product” is to be in the “conventional or natural sense of the word”. The “hallmark” of a product would be something that in its original state was tangible and moveable and not something which only came into existence to form part of the land on which it was built.
The expert evidence found that the dowels had not failed, but had pulled out of the piles intact. The only liability that Adana might have arose as a result of some error in the dowels’ installation.
In other words, where the Product itself is fine, and only “failed” as a result of defective installation, the public liability section of the policy would apply to the contractor’s claim for an indemnity.
A and others v National Blood Authority and another
PL case concerning blood transfusions. A party contracted hepatitis after receiving a blood transfusion. At the time, little was known about it so it was impossible to identify it in blood. P Brought an action and claimed that the ‘knowledge’ defence applied here. it was accepted that liability was regardless of fault. The purpose was to make liability stricter.
Issue: legitimate expectations (it is legitimate to expect that the blood would be free from diseases). The defence based on “knowledge” in s.4 did not apply where the existence of the generic defect was known or should have been known in the context of accessible information. Once the existence of the defect was known, there was the risk of that defect materialising in any particular product, and it was immaterial that the known risk was unavoidable in the particular product, since it would defy the point of the directive if a producer let dangerous products go to market simply because he didn’t know which of his products were dangerous.
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd
this was an important consumer case that tested how fair the current law on consumer rights and contracts is. C bought 30 pounds of cabbage seeds from D for 192. the crop then failed due to the worthless nature of the seeds. It turned out they supplied seeds of an inferior quality and hence why the crop did not materialise. this incurred a financial loss onto the other party.
Palmer v Palmer
Issue: whether a manufacturer should design a product against any potential misuse of that product. Can a misuse of a product be rendered as making it ‘defective’?
Considered the term ‘defect’ under the CPA 1987. the case involved injuries that were sustained as the result of improper use of a product by the consumer. To say the product was defective, it would need to be shown on the facts that the product has the potential to induce any misapplication.
The claimant had been sitting in the front seat and her head sustained a significant impact with the side panelling of the car, which resulted in severe brain damage. She had been wearing a seat belt with a device attached which had been designed to introduce slack into the belt in order to maximize comfort for the wearer. This device, called a Klunk Klip, was manufactured by one of the defendants in the litigation. The device was sold with instructions for use. However, the users did not have access to the instructions, as they had purchased the vehicle second hand with the unit already installed.
It ruled in favour of the claimant, holding that the device had a tendency to induce some members of the public to introduce excessive slack. The court found it likely that, in using the device, a member of the public would introduce more slack than appropriate, thus effectively converting the seat belt from an inertia reel seat belt into a potentially dangerous static seat belt.
XYZ v Travellers Insurance Company Ltd
claimants alleged they had been provided with defective breast implants. The courts should make a decision to see if the insurance company has ‘unjustifiably intermeddled. Transform was insured by travellers. The parties claimed a non party costs order against them which was upheld on appeal.
Hitchens (Hatfield) Ltd v Prudential Assurance Company Ltd
A case on construction liability. an insurer is not required to prove negligence in order to rely on an exclusion for faulty/defective design. All that needs to be shown is that the design was not fit for purpose.
Judgment in Finney Lock Seeds case
Lord Bridge: points out that this is the first time the house of Lords has had to consider a modern statutory provision giving the court power to override contractual terms excluding or restricting liability, which depends on the courts view of what is fair and reasonable. He thinks it is unfair to allow the appellants to rely on the contractual limitation of their liability, dismissing the appeal.
liability for potential misuse
Misuse must be foreseeable and not ‘drastic’.
LBU v Travelers Insurance Company Ltd
cracks emerged in a University accommodation block. It had been built over a historic watercourse, leading to disintegration.
Coulson J: It was held that the blocks had ‘gradually deteriorated’, and that the design was ‘faulty and defective’, and both of these causes meant that the damage (if accidental) was excluded under the policy.
