Law of Torts: Case Study #2 Anns v. Merton LBC (1978)
Principle of pure economic loss
Fact of the case:
The claimants were the tenants/leaseholders in a block of flats. The flat suffered some structural defects ranging from cracks on the walls, slopping of floors and subsidence due to inadequate foundations which were 2ft 6ins deep instead of 3ft deep as required.
The council was responsible for inspecting the foundation during the contruction of the flats.The claimants sued the Merton LBC instead of the builder as they saw the council having more financial resources in terms of paying out the damages.
The claimants based their claim on two reasons:
(a) the council's negligence in approving the plans of the properties
(b) council's failure to inspect at the time of construction
The claimants initial hearing failed as the action was only taken six years after the sales of flat. It was successfully appealed that action could only be taken when it was discovered.
The claimants won the lawsuits as the House of Lords and categorised the damage as' material damage to property'. Lord Wilberforce classified the damages suffered as physical damage to the property and that where foreseeability and proximity should be a duty of care. Therefore, the defendant was held liable.
Two-stage test
Anns v. Merton showed that (1) determining the duty of care in the tort of negligance by two-stage test and (2) English courts' willingness to prove for the claims in negligance for pure economic loss.
Lord Wilberforce proposed 2 stage test for the duty of care:
(1)whether there is a sufficient relationship of proximity between the wrongdoer and the person who has suffered
(2)whether there are any considerations which reduce the duty owed
References:
https://www.liuk.co.uk/anns-v-merton-lbc-pure-economic-loss/
http://www.e-lawresources.co.uk/cases/Anns-v-Merton-London-Borough-Council.php
https://www.lawteacher.net/free-law-essays/contract-law/development-of-the-principles-of-tort-law-contract-law-essay.php
Fact of the case:
The claimants were the tenants/leaseholders in a block of flats. The flat suffered some structural defects ranging from cracks on the walls, slopping of floors and subsidence due to inadequate foundations which were 2ft 6ins deep instead of 3ft deep as required.
The council was responsible for inspecting the foundation during the contruction of the flats.The claimants sued the Merton LBC instead of the builder as they saw the council having more financial resources in terms of paying out the damages.
The claimants based their claim on two reasons:
(a) the council's negligence in approving the plans of the properties
(b) council's failure to inspect at the time of construction
The claimants initial hearing failed as the action was only taken six years after the sales of flat. It was successfully appealed that action could only be taken when it was discovered.
The claimants won the lawsuits as the House of Lords and categorised the damage as' material damage to property'. Lord Wilberforce classified the damages suffered as physical damage to the property and that where foreseeability and proximity should be a duty of care. Therefore, the defendant was held liable.
Two-stage test
Anns v. Merton showed that (1) determining the duty of care in the tort of negligance by two-stage test and (2) English courts' willingness to prove for the claims in negligance for pure economic loss.
Lord Wilberforce proposed 2 stage test for the duty of care:
(1)whether there is a sufficient relationship of proximity between the wrongdoer and the person who has suffered
(2)whether there are any considerations which reduce the duty owed
References:
https://www.liuk.co.uk/anns-v-merton-lbc-pure-economic-loss/
http://www.e-lawresources.co.uk/cases/Anns-v-Merton-London-Borough-Council.php
https://www.lawteacher.net/free-law-essays/contract-law/development-of-the-principles-of-tort-law-contract-law-essay.php
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