Lloyd's Maritime and Commercial Law Quarterly
ECONOMIC LOSS IN THE MARITIME CONTEXT
N. J. J. Gaskell.*
1. General introduction
It is well recognized that the common law is in a state of flux (not to say uncertainty) concerning the possibilities of recovery, in an action for negligence, of damages for economic loss (however that is defined)1. There is little doubt that practitioners, academics and students in the common law countries are awaiting major decisions of superior courts to open the way for such recovery. Several cases have indicated the likely direction of the law2 and it seems inherent in the nature of the common law that liability will be extended rather than reduced. That this should be so is hardly ever questioned3. Indeed, any commentator who suggests that new liabilities should not be created has to cross what has been described elsewhere as an “intellectual picket line” to cries of abuse about being a defender of the outmoded “floodgates” argument. Discussion of economic loss is often too vague and unrelated to potential claims. It is difficult to formulate rules without seeing the possible consequences across the range of economic activity. It is proposed in this article to consider, in the specific context of maritime law, the impact of widening recovery for economic loss resulting from collisions and groundings and particular reference will be made to a recent Australian case, The Mineral Transporter
4. The rules will be considered in the context of a well defined market where the competing interests are well recognized and finely balanced and in which there is a developed body of case-law. The market to some extent already takes account of various risks involved in maritime transport5. Before any decision is
* Institute of Maritime Law, University of Southampton.
1 The literature is copious but see in particular: Rogers, W. V. (ed.), Winfield and Jolowicz on Torts (12th edn., London, Sweet & Maxwell, 1984) especially pp. 76–80; Dias, R. W. (ed.) Clerk and Lindsell on Torts (15th edn., London, Sweet & Maxwell, 1982) pp. 371 et seq.; Percy, R. A. (ed.), Charlesworth and Percy on Negligence (7th edn., London, Sweet & Maxwell, 1983) pp. 43 et seq.; Prosser, W., Law of Torts, (4th edn. 1971) p. 665; Grubb, A., “A Case for Recognising Economic Loss in Defective Building Cases” [1984] C.L.J. 163; Keeler, J. F., “Paying for Mistakes—Professional Negligence and Economic Loss” (1979) 53 A.L. J. 412; Glass, H. H., “Duty to Avoid Economic Loss” (1977) 51 A. L. J. 373; Craig, P. P., “Negligent Mistatements, Negligent Acts and Economic Loss” (1976) 92 L.Q.R. 213; Marshall, D., “Liability for Pure Economic Loss Negligently Caused—French and English Law Compared” (1975) 24 I.C.L.Q. 748; Stevens, L. L., “Negligent Acts Causing Purely Financial Loss: Policy Factors at Work” (1973) 23 U. of Toronto L.J. 431; Fleming, J., “Limitations on Liability for Economic Loss Caused by Negligence: A Pragmatic Appraisal” (1972) 12 J.S.P.T.L. 105; Harvey, C., “Economic Losses and Negligence” (1972) 50 Can. Bar Rev. 580; Note, (1971) 49 Can. Bar Rev. 619; Note, “Negligence and Economic Loss” (1971) 117 S.J. 255; Atiyah, P., “Negligence and Economic Loss” (1967) 83 L.Q.R. 259; Note, “Negligent Interference with Economic Expectancy: The Case for Recovery” (1964) 16 Stanford L.Rev. 664; Note, “Economic Loss and Products Liability Jurisprudence” (1966) 66 Columbia L.Rev. 917. Of particular interest are the as yet unpublished papers presented at the Colston Symposium on “The Law of Tort: Policies and Trends in Liability for Damage to Property and Financial Loss” held in April 1984 at Bristol University.
2 Such as, Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465; Rivtow Marine Ltd. v. Washington Iron Works [1974] S.C.R. 1189; Caltex Oil (Australia) Pty. Ltd. v. The Dredge “Willemstad” (1976) 136 C.L.R. 529; Junior Books Ltd. v. Veitchi Co. Ltd. [1983] 1 A.C. 520. And see now Leigh and Sillivan Ltd. v. Aliakmon Shipping Co. Ltd. The Times, 8th December 1984.
3 But see Atiyah, op. cit., fn., 1, supra.
4 For a similar concentration on specific areas see also Grubb (defective buildings) and Craig (negligent misstatements) op. cit., fn. 1, supra. The Mineral Transporter [1983] 2 N.S.W.L.R. 564 (Supreme Court, New South Wales).
5 See the speech of Lord Diplock in Federal Commerce and Navigation Co. v. Tradax Export S.A. (The Maratha Envoy) [1978] A.C. 1, 7 et seq.
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