The Gazette 1989

MARCH 1989

GAZETTE

Defective Building Work: Who should pay? Part 2

plaintiff, however; moreover, bringing the defect to the attention of the vendor or manufacturer could help his case. 14 If the product injures another person, should the doctrine of novus actus inter- veniens apply? 15 "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. 16 Article 9 of the Convention excludes from com- pensation damage to, or destruction of, the defective product itself. 17 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. 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 A Glance Towards Europe Lord Bridge's notion of Prevention Costs or Damages for Self- Destructing Product?

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 12 observes, "it would be unfair to require the

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-

By 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 of "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? 13 (The proviso in that paragraph as to "unjust enrich- ment" might save the day for the

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