In an earlier article1 the writer considered an Australian case2 which allowed the recovery of economic loss by a time charterer from the owner of a ship which collided with the chartered vessel. The loss consisted of wasted hire paid while the ship was being repaired as well as lost profits3. The Privy Council has now4 allowed the defendant shipowner’s appeal and, in doing so, has indicated that the Law Lords are not necessarily prepared to widen the scope for economic loss claims in tort.

Significantly, Lord Fraser5 dealt with Junior Books Ltd. v. Veitchi Co. Ltd.6 by saying that it may be regarded as having extended the scope of duty somewhat, but that any extension was not in the direction of recognizing a title to sue in a party who suffered economic loss because his contract with the victim of the wrong was rendered less profitable or unprofitable7. Their Lordships were able to avoid a collision with the Australian High Court case of Caltex Oil (Australia) Pty. Ltd. v. The Dredge “Willemstad”8 by stating that there was no single ratio decidendi to be found in the case9. That must be correct but, interestingly, they were not impressed with the approach of Gibbs and Mason, JJ., in Caltex which attempted to distinguish between a plaintiff as an individual and as a member of an unascertained class. Indeed, apart from the Hedley Byrne 10 type of case, their Lordships rejected the idea that it is practicable (from the point of view of certainty) to find a satisfactory control mechanism by reference to an ascertained class. Nor does it appear that they accepted a suggested test based upon allowing economic losses which were a direct result of a wrongful act and foreseeable11.

The Privy Council followed the approach of Lord Wilberforce in Anns v. Merton L.B.C.12 and decided that special considerations operated in this maritime context to limit the scope of the duty of care owed by the defendant shipowner. They did so at the second stage of the approach adopted by Lord Wilberforce—a specific reminder of the