LLB CASE ANALYSIS (Law of Contract and Law of Tort)

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LLB CASE ANALYSIS (Law of Contract and Law of Tort)

‘The starting point for any rule of remoteness of damage is the familiar notion that a line must be drawn somewhere: it would be unacceptably harsh for every tortfeasor or contract breaker to be responsible for all the consequences which he has caused’. Different tests have been produced through case law which differentiates the liability of defendants; these will be presented throughout the essay.

In the Law of Tort there has previously been much controversy surrounding the rules of which should be applied in the instance of remoteness of damage. There are in effect two competing rules namely: the ’directness’ test and the ‘foreseeability’ test.  The genesis of the directness test is found within the case of Re Polemis v Furness Withey & Co., whereby a ship was destructed as a result of the negligent actions of stevedores. At first instance the arbitrator held that no liability arose. However, on appeal the defendant was found liable for the direct consequence of their actions, ‘‘it matters not whether the nature of the damage which has sustained is foreseeable as long as its origins can be linked to the relevant act of the defender’; identifying that if the loss made arises directly and naturally from the defendants wrong doing then the claimant’s loss is recoverable in damages. This case was overruled by the Overseas Tankship (UK) Ltd (The Wagon Mound) v Morts Dock & Engineering Co. Ltd, whereby the test of foreseeability was introduced. In this case the defendant’s vessel leaked oil in the wharf where it was moored; some cotton debris became embroiled in the oil, which when sparked resulted in a fire that caused extensive damage to the wharf and some vessels. The judgement of the case departed from the previous precedent. It was held that there is no actionable breach of duty unless it can be shown that at the time of the act the consequences of the act were reasonably foreseeable.’ Therefore, if damage was foreseeable, albeit minor, the defendant should be held liable for all such damage. The defendants in The Wagon Mound were held not liable as the fire was unforeseeable. Parallels occur within the line of Scottish authority found in the ‘Grand Rule’ which stretches back to the case of Allan v Barcaly,  as it is consistent with the foreseeability principle and also incorporates’ references to damage that arises ‘naturally and directly’.

Simmons v British Steel plc (hereafter referred to as Simmons), may be considered to give clarity to the controversy regarding the two tests of remoteness of damage. The case itself regards the pursuer who had an accident at work, which resulted in an injury to the head, a flare up of a previous skin condition and depression. The main legal principle, clarifies that the ultimate test in regards to remoteness of damage is the reasonably foreseeable test. Simmons’ case establishes a series of tests by which remoteness of damage should be approached. It was held ‘the defender is not held liable for a consequence of a kind which is not reasonably foreseeable’ (The Wagon Mound, Allan v Barclay), with the possible exemption in situations whereby ‘damage [was] caused by a novus actus interveniens or unreasonable conduct on the part of the pursuer’.  Subject to the satisfaction of prior tests, ‘the defender is liable, even if the damage is greater in extent than was foreseeable or it was caused in a way that could not have been foreseen’. The said rule is reinforced by previous case law; the issue of whether or not defendants should be held liable in situations whereby an unforeseeable route causes foreseeable damage was discussed in Hughes v Lord Advocate (hereafter referred to as Hughes).  In this case a young boy suffered burns due to the explosion of a paraffin lamp. Hughes also applied in the ruling of Page v Smith; it was held that ‘psychiatric injury and physical injury should be treated as the same type of injury [personal] for the purposes of foreseeability’. This is reinstated in Simmons ‘where personal injury to the pursuer was reasonably foreseeable; the defender is liable for any personal injury’.  Simmons also held ‘the defender must take his victim as he finds him’ ; the extent of the damage caused does not have to be reasonably foreseeable. In Smith v Leech Brain & Co but for the reasonably foreseeable burn to the pursuers’ lip, the pursuer would not have contracted cancer, which resulted in his death.  As shown from Hughes and Smith v Leech Brain & Co as long as the negligent action was reasonably foreseeable, the defendant will be held liable regardless of the unforeseeable route or extent of the damage caused.

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When considering whether a contracting party is liable for damages, the basic rule is held in Hadley v Baxendale (hereafter referred to as Hadley); whereby a mill was closed due to the delay of a carrier delivering a mill shaft.  The primary governing rules state damages are recoverable under conditions where ‘the damage arise[s] “naturally, i.e., according to the usual course of things, from such breach of [the] contract itself?’ Secondly, that those damages because of special knowledge would have been in the contemplation of both parties, at the time they made the contract.  Within the case Victoria Laundry (Windsor) Ltd v Newman ...

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