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Lloyd's Maritime and Commercial Law Quarterly

BOOK REVIEW - RICHARDS BUTLER ON LATENT DAMAGE

RICHARDS BUTLER ON LATENT DAMAGE by Robert Merkin, LL.M., Director of Research, Richards Butler, Senior Visiting Fellow, Centre for Commercial Law Studies, Queen Mary College. Lloyd’s of London Press Ltd., London (1987, xxii and 150 pp., plus 12 pp. Appendix and 7 pp. Index). Hardback £35.
This slim but expensive volume is mainly concerned with the operation of the Limitation Act 1980, following the amendments to it by the Latent Damage Act 1986 and the Consumer Protection Act 1987.
The new Acts have made an extremely difficult area of law even more complex. The same set of facts can give rise to no less than nine different limitation periods! This complexity is the result of Parliament’s imposing new limitation periods upon existing ones. The author, who is Director of Research at Richards Butler, has provided an admirable detailed analysis and comparison of the different regimes for resolving latent damage problems relating to: (1) personal injuries; (2) non-personal injury cases; and (3) damage to persons and property caused by defective products. The book will be invaluable for practitioners and advanced students in this field of law.
The author defines the “latent damage” problem as one in which the effects of the defendant’s non-fraudulent wrongdoing do not become manifest to, or could not reasonably have been discovered by, a plaintiff of full capacity. The various solutions to this problem are discussed clearly and critically, with useful illustrations and diagrams.
His analysis and critique of the decision in Pirelli General Cable Works Ltd. v. Oscar Faber & Partners [1983] 2 A.C. 1 is the best I have read. The basis of that decision is that the limitation period for claims in tort begins to run on the date of the occurrence of the damage caused by the alleged negligence. The Latent Damage Act 1986 mitigates this rule but does not displace it. The result is that there can be a number of different starting dates for limitation arising out of the same event, and in many cases it is difficult to determine precisely when the damage has occurred. The common law rule is subject to the obscure “doomed from the start” exception, which has already given rise to a good deal of litigation. The author suggests that a building or product will not be classified as doomed from the start unless it is inevitably bound to suffer damage as a result either of the passing of time or of the use to which it is put by the plaintiff.
He also demonstrates the difficulties which arise in cases of economic loss of the variety in Junior Books Ltd. v. Veitchi Co. Ltd. [1983] 1 A.C. 520. He argues that a cause of action does not arise in relation to a defective subject-matter until damage has occurred to it, and the mere fact that economic loss will almost inevitably have been suffered by the plaintiff from the outset is immaterial. The decision of the Court of Appeal in Muirhead v. Industrial Tank Specialities Ltd. [1986] Q.B. 507, which is referred to in other contexts but not this one, indicates that the class of latent damage cases in which pure economic loss is recoverable is extremely limited. The author suggests that in the exceptional cases it might be possible to classify the subject-matter as doomed from the start, but I doubt whether this is consistent with the interpretation of Junior Books by Goff, L.J., in Muirhead. In “equivalent to con

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