Tort: Pure Economic Loss, Psychiatric Harm and Employers’ Primary Liability

Question 1

What is employers’ primary liability?

Answer 1

The employer’s own negligence in breaching their duty of care owed to employees at common law

Question 2

How does primary liability differ from vicarious liability?

Answer 2

Primary liability arises from the employer’s own fault; vicarious liability holds the employer responsible for the torts of employees even if the employer is not at fault

Question 3

What does it mean that an employer’s duty is personal and non-delegable?

Answer 3

The employer remains legally responsible for an employee’s safety even if the employer entrusts tasks to others; liability cannot be delegated

Question 4

Which case confirmed that an employer’s duty is non-delegable?

Answer 4

McDermid v Nash Dredging [1987] confirmed that employers cannot delegate their ultimate responsibility for employee safety

Question 5

What four obligations make up an employer’s duty of care?

Answer 5

To provide safe and competent employees; safe and proper plant and equipment; a safe place of work (including third-party premises); and a safe system of work with adequate supervision and instruction

Question 6

Which case defined the four facets of an employer’s duty of care?

Answer 6

Wilsons and Clyde Coal Co Ltd v English [1938] specified the obligations to provide safe employees, equipment, premises, and systems of work

Question 7

What is required to satisfy the duty to provide safe and competent employees?

Answer 7

The employer must select and retain employees who are capable and safe to perform their roles; known hazards from fellow employees must be addressed to prevent harm

Question 8

Which case illustrates breach of the duty to employ safe and competent staff?

Answer 8

Hudson v Ridge Manufacturing Co Ltd [1957]: employer was liable for hiring a worker known for dangerous pranks

Question 9

What duty does an employer owe regarding plant and equipment?

Answer 9

To provide and maintain machinery, tools, and protective equipment that are safe for use by employees

Question 10

Give an example where an employer was held not negligent for not installing protective screens in vehicles.

Answer 10

Yorkshire Traction Co Ltd v Walter Searby [2003]: employer reasonably balanced driver complaints about glare against low risk of passenger assault

Question 11

What duty does an employer owe regarding the workplace premises?

Answer 11

To ensure the physical work environment is safe, including premises not owned by the employer if employees are required to work there

Question 12

Which case shows the degree of care required for third-party premises?

Answer 12

Wilson v Tyneside Cleaning Co [1958]: employer must take reasonable steps to assess and address hazards in third-party locations

Question 13

What factors affect the standard of care for premises not owned by the employer?

Answer 13

Nature of the premises, type of work, employee experience, degree of control by the employer, and knowledge of hazards (Cook v Square [1992])

Question 14

What does the duty to provide a safe system of work involve?

Answer 14

Designing, implementing, and enforcing procedures, instructions, training, supervision, and warnings to minimize workplace risks

Question 15

Which case established that an employer must both devise and enforce a safe system of work?

Answer 15

General Cleaning Contractors Ltd v Christmas [1953]: employer breached duty by failing to provide instructions or safeguards when employees cleaned windows from sills instead of ladders

Question 16

Why is it not enough for an employer to merely devise a safe system of work?

Answer 16

Because the employer must also take reasonable steps to ensure employees follow the system, enforcing training and compliance

Question 17

How was failure to enforce use of protective equipment treated in Bux v Slough Metals [1974]?

Answer 17

The employer was held negligent for not ensuring employees wore safety goggles, despite providing them

Question 18

What did Clifford v Charles Challen & Sons [1951] illustrate about barrier cream?

Answer 18

Employer was liable for not supplying or enforcing use of barrier cream, as workers developed dermatitis from contact with glue

Question 19

How does breach of duty apply in the employment context?

Answer 19

The employer must take reasonable precautions (Latimer v AEC [1953]); an objective test is used, and special employee characteristics (e.g., a known disability) may increase the required care (Paris v Stepney Borough Council [1951])

Question 20

What role does causation play in primary liability claims?

Answer 20

The usual ‘but for’ test applies; failure to provide safety equipment may not cause loss if the employee would not have used it (McWilliams v Sir William Arrol [1962])

Question 21

How is remoteness assessed in employers’ primary liability claims?

Answer 21

By the same foreseeability test used in general negligence: damage must not be too remote and must be a type of harm reasonably foreseeable at breach

Question 22

What defences are available against a primary liability claim?

Answer 22

Voluntary consent (volenti non fit injuria) and contributory negligence, with statutory limitations under RTA 1988 s 149, UCTA 1977 s 2(3), and CRA 2015 s 65 limiting reliance on consent clauses

Question 23

Why is the defence of voluntary consent rare in the employment context?

Answer 23

Courts are reluctant to find that employees freely and voluntarily assume workplace risks due to unequal bargaining power (Bowater v Rowley Regis Corporation [1944])

Question 24

Which case illustrated the rare success of volenti in an employment-like context?

Answer 24

ICI Ltd v Shatwell [1965]: employees knowingly engaged in potentially dangerous testing and were held to have consented to the risk

Question 25

What is contributory negligence in an employment claim?

Answer 25

A partial defence where the employee’s own failure to take reasonable care (e.g., not wearing safety equipment) contributed to their injury, reducing damages proportionately

Question 26

How was contributory negligence applied in Bux v Slough Metals [1974]?

Answer 26

Claimant’s damages were reduced by 40% for failing to wear provided safety goggles, which would have prevented or reduced his eye injury

Question 27

How was contributory negligence applied in Clifford v Charles Challen & Sons [1951]?

Answer 27

Claimant’s award was reduced by 50% for failing to use barrier cream that would have mitigated dermatitis risk

Question 28

What statutory requirement ensures employers are protected against primary liability claims?

Answer 28

Employers must carry compulsory liability insurance under the Employers’ Liability (Compulsory Insurance) Act 1969 and associated 1998 Regulations

Question 29

What is 'psychiatric harm' in the context of negligence claims?

Answer 29

A medically recognised psychiatric illness or a shock-induced physical condition suffered as a result of perceiving a traumatic event

Question 30

Why do courts restrict claims for pure psychiatric harm?

Answer 30

To prevent a flood of claims, avoid disproportionate liability, and reduce risk of fraudulent or exaggerated claims

Question 31

What distinguishes an 'actual victim' from a 'primary victim'?

Answer 31

An actual victim suffers physical harm (with or without psychiatric harm); a primary victim suffers psychiatric harm because of reasonable fear for their own physical safety

Question 32

What test determines if a primary victim is owed a duty of care?

Answer 32

Whether physical injury to the claimant was reasonably foreseeable at the time of the defendant’s negligence (Page v Smith [1996] 1 AC 155)

Question 33

Why does a primary victim not need to foresee psychiatric harm for duty?

Answer 33

Because once physical injury is foreseeable, the defendant owes a duty of care for any resulting psychiatric harm under the 'thin skull' rule (Page v Smith)

Question 34

Give an example of a primary victim case where no physical harm occurred but psychiatric harm was recoverable.

Answer 34

Page v Smith: claimant had ME, no physical injury from a collision but suffered worsening ME (psychiatric harm), and duty was owed because physical injury was foreseeable

Question 35

What requirement must be satisfied before any psychiatric harm claim can proceed?

Answer 35

The claimant must have suffered a medically recognised psychiatric illness or shock-induced physical condition

Question 36

In Hinz v Berry [1970] 2 QB 40, why was only part of the claimant’s claim allowed?

Answer 36

The claimant’s depression (medically recognised) was recoverable, but grief, sorrow, and worry were not because they were not medically recognised psychiatric illnesses

Question 37

Define a 'secondary victim' in psychiatric harm claims.

Answer 37

A person who suffers psychiatric harm from witnessing or learning about injury to another (usually a close relative) but without being in fear for their own safety

Question 38

What is the key difference in establishing duty between primary and secondary victims?

Answer 38

Primary victims need only foresee physical injury; secondary victims must satisfy stricter proximity and foreseeability criteria (the Alcock criteria)

Question 39

What are the Alcock criteria for secondary victims?

Answer 39

(a) Psychiatric harm must be reasonably foreseeable in a person of ordinary fortitude; (b) Close ties of love and affection with the victim; (c) Proximity in time and space to the accident or its immediate aftermath

Question 40

Why did the claimant fail in Bourhill v Young [1943] AC 92?

Answer 40

Because psychiatric harm (stillbirth) was not reasonably foreseeable in an ordinary person who did not witness the accident but only heard it and saw aftermath later

Question 41

Why did the claimant succeed in McLoughlin v O’Brian [1982] 2 All ER 298?

Answer 41

She witnessed the immediate aftermath at hospital (family injured and distressed), was closely related to victims, and psychiatric harm was reasonably foreseeable

Question 42

What relationship categories give a rebuttable presumption of 'close ties of love and affection'?

Answer 42

Parent–child, husband–wife, and engaged couples

Question 43

Why were many Alcock claimants unsuccessful despite watching the disaster on live TV?

Answer 43

Because witnessing via television does not satisfy proximity in time and space, and victims were not individually identifiable on screen

Question 44

Can a secondary victim claim for psychiatric harm caused by a delayed 'aftermath' beyond two hours?

Answer 44

Probably not—immediate aftermath requires seeing victims in the same condition as at the accident scene; longer delays break proximity (Alcock)

Question 45

What key principle was overruled by Paul v Royal Wolverhampton NHS Trust [2024] UKSC 1?

Answer 45

That psychiatric harm claims required sudden shock; Paul confirmed sudden shock is not required, but proximity and other Alcock factors remain

Question 46

Why did the Supreme Court reject duty in Paul v Royal Wolverhampton NHS Trust?

Answer 46

Because medical crises lack a discrete 'accident'—no clear traumatic event, no assumption of responsibility for non-patients, and no immediate proximity

Question 47

What distinguishes 'accident' cases from 'medical crisis' cases for psychiatric harm?

Answer 47

Accidents are discrete, external events; medical crises are prolonged, unpredictable illnesses, lacking a clear immediacy for triggering duty (Paul)

Question 48

When can a secondary victim recover psychiatric harm from live TV coverage?

Answer 48

If victims are identifiable, the event is happening live, and the claimant directly perceives the traumatic event as it unfolds (Alcock, but very narrow exception)

Question 49

What is an 'assumption of responsibility' case in psychiatric harm law?

Answer 49

Situations where a defendant assumes duty to protect a claimant from foreseeable psychiatric harm (e.g., doctor–patient, employer–employee relationships)

Question 50

Give an example where an employer assumed responsibility for employee’s psychiatric harm.

Answer 50

Walker v Commissioner of Police for the Metropolis [2000]: police owed duty to officers for PTSD from witnessing traumatic events because they assumed responsibility for their welfare

Question 51

How did Walker v Northumberland County Council [1995] 1 All ER 737 illustrate assumption of responsibility?

Answer 51

Council owed duty to social worker who suffered a second breakdown because they knew his heavy caseload posed a foreseeable stress risk and failed to reduce workload

Question 52

What guidelines did Barber v Somerset County Council [2004] UKHL 13 provide for occupational stress?

Answer 52

Psychiatric harm must be reasonably foreseeable based on: (a) nature/extent of work; (b) visible signs of stress; (c) size and resources of employer; and remedies must be proportionate

Question 53

Why is sudden shock not required in assumption of responsibility cases?

Answer 53

Because the claimant’s psychiatric harm arises from a recognized duty relationship, not necessarily a single traumatic event (Paul confirms for medical contexts)

Question 54

How are rescuers and bystanders classified for psychiatric harm?

Answer 54

They are treated as primary victims if they fear for their own safety when attempting rescue; otherwise, as secondary victims if they merely witness or learn about events

Question 55

Give an example of a rescuer as a primary victim.

Answer 55

Cullin v London Fire & Civil Defence Authority [1999]: firefighter who saw colleagues trapped suffered PTSD as a primary victim because he feared for his own safety

Question 56

Why did the court treat fire officers as secondary victims in White v Chief Constable of South Yorkshire Police [1999]?

Answer 56

Because they did not fear for their own safety but suffered PTSD from assisting after the accident; they did not qualify as primary victims

Question 57

What must a claimant demonstrate to satisfy 'proximity in time and space' for secondary victim claims?

Answer 57

That they were present at the accident or its immediate aftermath and directly perceived the event or its consequences with their own senses

Question 58

Can a claimant recover for psychiatric harm when they only hear about an accident indirectly?

Answer 58

No—hearing news reports or learning about it later does not satisfy the proximity requirement and is not a valid basis for secondary victim duty (Alcock)

Question 59

What is meant by 'immediate aftermath' in psychiatric harm law?

Answer 59

The claimant encounters the victims in the same physical and emotional condition as at the accident scene, usually within a very short time frame (e.g., up to two hours)

Question 60

How does the 'thin skull' rule apply to psychiatric harm?

Answer 60

If psychiatric harm is foreseeable, the defendant is liable for all psychiatric consequences even if claimant’s vulnerability made harm worse (Brice v Brown [1984])

Question 61

What is the structure for analyzing a primary victim psychiatric harm claim?

Answer 61

Identify parties and tort; confirm medically recognised psychiatric or shock-induced harm; classify as primary victim; test if physical injury was foreseeable; apply precedent or common duty principles

Question 62

What is the structure for analyzing a secondary victim psychiatric harm claim?

Answer 62

Identify parties and tort; confirm medically recognised psychiatric or shock-induced harm; classify as secondary victim; apply Alcock criteria (foreseeability, relationship proximity, time/space proximity)

Question 63

What are the four main categories of loss in negligence?

Answer 63

(1) Personal injury/property damage; (2) Consequential economic loss; (3) Pure economic loss; (4) Psychiatric damage

Question 64

What is 'pure economic loss'?

Answer 64

Economic loss that arises without any damage to the claimant’s property or injury to their person

Question 65

Give an example of pure economic loss not flowing from property damage or personal injury.

Answer 65

Lost profits from a bad investment or missing a contractual opportunity

Question 66

How is 'pure economic loss arising from damage to property of another' defined?

Answer 66

Economic loss suffered by a claimant when a third party’s property is damaged, leading to loss for the claimant

Question 67

Which case illustrates loss from damage to another’s property being pure economic loss?

Answer 67

Weller & Co Ltd v Foot & Mouth Disease Research Institute [1965]: auction house’s lost profits were pure economic loss after local cattle infection

Question 68

Why could the auction house not recover its lost profits in Weller?

Answer 68

Because their losses flowed from damage to farmers’ cattle (property of another), so it was pure economic loss and non-recoverable

Question 69

Why do courts generally refuse to allow recovery for pure economic loss?

Answer 69

Policy concerns: to avoid floodgates of litigation, crushing liability, and fraudulent claims, and to respect contractual boundaries

Question 70

What is the general rule regarding pure economic loss in negligence?

Answer 70

No duty of care is owed for pure economic loss, so it is not recoverable (Spartan Steel & Alloys Ltd v Martin & Co [1973])

Question 71

What facts in Spartan Steel illustrate the distinction between consequential and pure economic loss?

Answer 71

Damaged metal lost profit was consequential economic loss (recoverable), but profit on unmolten future melts was pure economic loss (non-recoverable)

Question 72

In Spartan Steel, why was the lost profit on future melts non-recoverable?

Answer 72

Because that profit did not flow from damage to the claimant’s property but from damage to a third party’s electricity cable, making it pure economic loss

Question 73

What is the rule for defective items under pure economic loss?

Answer 73

The cost of repairing or replacing an inherently defective product is pure economic loss and not recoverable in tort (Murphy v Brentwood DC [1990])

Question 74

Why could Murphy not recover for the cost of repairing his defective house?

Answer 74

Because the defect was inherent in the property (foundations) and no physical damage had occurred; it was pure economic loss

Question 75

What are the three subcategories of pure economic loss by definition?

Answer 75

(1) Economic loss not flowing from property damage/personal injury; (2) Loss from damage to another’s property; (3) Cost of repairing defective items

Question 76

Why is consequential economic loss recoverable if resulting from property damage?

Answer 76

Because it flows directly from damage to the claimant’s own property or person, making it not 'pure' economic loss

Question 77

What is a negligent misstatement in the context of pure economic loss?

Answer 77

A statement provided carelessly which the claimant reasonably relies upon, leading to pure economic loss

Question 78

In which landmark case were negligent misstatements first recognized as a basis for liability?

Answer 78

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964]

Question 79

What were the facts of Hedley Byrne v Heller?

Answer 79

Hedley Byrne relied on a bank’s written credit reference for Easipower; Easipower defaulted; Hedley Byrne suffered £17,000 pure economic loss

Question 80

Why did Hedley Byrne v Heller establish liability for negligent statements?

Answer 80

Because, absent a valid disclaimer, the bank would have owed a duty of care given the claimant’s reasonable reliance on their expertise

Question 81

What disclaimer appeared in Hedley Byrne, and why did it matter?

Answer 81

The bank’s letter said 'without responsibility,' which negated assumption of responsibility and avoided duty

Question 82

What three overlapping tests emerged from Hedley Byrne for negligent misstatement duty?

Answer 82

(1) Reasonable reliance; (2) Voluntary assumption of responsibility; (3) Special relationship of trust and confidence

Question 83

What are the three steps in the 'reasonable reliance' test for negligent statements?

Answer 83

(a) Claimant relied on the defendant’s advice (fact); (b) It was reasonable for claimant to rely; (c) Defendant knew claimant was relying (fact)

Question 84

What factors determine whether reliance on a defendant’s advice is reasonable?

Answer 84

(1) Defendant’s special skill/knowledge; (2) Claimant’s own skill/knowledge; (3) Context of advice (social vs professional); (4) Other relevant circumstances

Question 85

How does the relative expertise of parties affect reasonable reliance?

Answer 85

If defendant has superior expertise and claimant lacks it, reliance is more likely reasonable; if claimant has equal expertise, reliance may be unreasonable

Question 86

Give an example where equal expertise negated reasonable reliance.

Answer 86

Stevenson v Nationwide Building Society [1984]: estate agent relied on a building society valuation but should have known to get a structural survey

Question 87

Give an example where a first-time buyer’s lack of expertise made reliance reasonable.

Answer 87

Yianni v Edwin Evans [1982]: first-time buyer reasonably relied on lender’s valuation rather than costly independent survey

Question 88

How does the context of advice (social vs professional) affect duty?

Answer 88

Professional advice given for a specific purpose is likelier to attract duty; social advice generally does not, unless the adviser assumes responsibility

Question 89

What case suggests social advice can sometimes give rise to duty?

Answer 89

Chaudhry v Prabhakar [1989]: friend with car knowledge advised purchasing a used car, and was held to have assumed responsibility

Question 90

What is required for the 'voluntary assumption of responsibility' test?

Answer 90

Defendant must undertake responsibility for correctness of advice, akin to a contractual obligation, often arising when giving professional services

Question 91

Give an example where voluntary assumption of responsibility created duty without payment.

Answer 91

Lejonvarn v Burgess [2017]: architect friend gave free design advice and assumed responsibility, so owed duty for pure economic loss

Question 92

In Henderson v Merrett Syndicates Ltd [1995], what assumption of responsibility was recognized?

Answer 92

Underwriters managing investors’ syndicate affairs assumed responsibility to exercise reasonable care, giving rise to duty for negligent advice

Question 93

What four criteria from Caparo v Dickman help identify assumption of responsibility?

Answer 93

(1) Advice communicated to claimant or known to be communicated; (2) Defendant knew purpose of advice; (3) Defendant knew claimant would rely without independent check; (4) Claimant acted to their detriment

Question 94

How did Caparo v Dickman [1990] clarify negligent misstatement duties?

Answer 94

It confirmed duty arises when advice is produced for a specific purpose, communicated to an identifiable claimant who reasonably relies and suffers loss

Question 95

Why did Caparo shareholders fail to recover from auditors?

Answer 95

Auditors’ reports were for shareholders’ internal voting decisions, not for potential investors’ purchase decisions—no assumption of responsibility for investment advice

Question 96

What factors determine if a negligent misstatement disclaimer is valid under UCTA/CRA?

Answer 96

Under UCTA 1977 and CRA 2015, disclaimers of liability for negligence must satisfy a reasonableness test (fairness to consumer/business)

Question 97

List the UCTA factors for assessing reasonableness of a disclaimer in negligent misstatement context.

Answer 97

(1) Relative bargaining positions; (2) Availability of alternative advice; (3) Difficulty of task for defendant; (4) Practical consequences/costs and ability to insure

Question 98

Which case applied UCTA reasonableness to disclaimers in a negligent survey context?

Answer 98

Smith v Eric S. Bush [1989]: 'Without responsibility' disclaimer was unreasonable because buyer was first-time and lacked funds for full survey

Question 99

How does CRA 2015 treat disclaimers of liability for negligence between trader and consumer?

Answer 99

Any term excluding or limiting liability for personal injury or most losses is void; other exclusions must be fair under the fairness test

Question 100

Why will contractual claims often cover pure economic loss for defective products?

Answer 100

Because contract law allows recovery for breach of implied terms (quality/fitness), whereas tort generally bars pure economic loss

Question 101

What must a beneficiary prove to recover loss from a negligently drafted will?

Answer 101

That the solicitor assumed responsibility toward the beneficiary, the will instructions were clear, and the beneficiary relied to their detriment (White v Jones [1995])

Question 102

What key test was established in White v Jones [1995] for negligent wills?

Answer 102

Solicitor’s undertaking to change a will gave rise to duty owed to beneficiaries, as loss to beneficiary was foreseeable if instructions not carried out

Question 103

What duty does a referee owe when giving an employment reference?

Answer 103

A duty to prepare an accurate reference once they voluntarily assume responsibility by agreeing to provide it (Spring v Guardian Assurance [1995])

Question 104

What was the outcome in Spring v Guardian Assurance plc [1995]?

Answer 104

Employer owed duty to employee to exercise reasonable care in preparing a reference; negligent negative reference gave rise to duty for pure economic loss