Leigh and Sillavan v. Aliakmon Shipping Co. (The Aliakmon)1 provides Court of Appeal authority on whether the buyer of goods damaged during shipment who had no property in the goods at the time of damage and no right to sue under the Bills of Lading Act 1885, s. 1, can sue the negligent shipowner in tort. The conflict between The Wear Breeze 2 and The Irene’s Success 3 is resolved, at any rate for the time being, in favour of The Wear Breeze. Sir John Donaldson, M.R., and Oliver, L.J., held that the buyer has no action in tort and that The Wear Breeze is still good law. But the decision was not unanimous. Robert Goff, L.J., concurred in the result only because on the particular facts an action in tort against the shipowners would fail. In his view, The Wear Breeze should now be regarded as wrongly decided.

The law of tort on recovery for economic loss caused by negligence is passing through a period of rapid development. Although they reached opposite conclusions, Oliver and Robert Goff, L.JJ., agreed that there is no single general principle which can explain the circumstances in which economic loss is recoverable. The decisive factor in this case proved to be the Hague Rules. In The Irene’s Success Lloyd, J., thought that the Hague Rules were not a sufficiently weighty consideration to displace a prima facie duty to take care, but all the members of the Court of Appeal held that it would be wrong for a shipowner who had contracted to carry goods on Hague Rules terms to be made liable to a claim in tort not limited by their provisions4. The Master of the Rolls and Oliver, L.J., held that it followed that the shipowner owed no duty at all to the buyer, since they did not see how a duty of care in tort to the buyer could be equated to the contractual duty to the shipper. Robert Goff, L.J., differed on this point. His conclusion was that the shipowner did owe a duty of care to the buyer, but the buyer’s claim in tort would be subject to the terms of the bill of lading restricting the shipowner’s liability.

The decision is not without its difficulties. In general terms, the problem is the effect on C’s claim of exemption clauses in a contract between A and B, misperformance of which by A causes loss to C. Where the loss to C can be characterized as physical damage to his property, the courts have devised for similar cases involving the Hague Rules a solution which ensures that C has a claim in tort against A subject to the exemption clauses5. The decision of the Master of the Rolls and Oliver, L.J., that where the loss to C is purely economic, the limitations on A’s contractual obligations