Waineciano

Business Law – Course Work Assessment

Issue 1

Simon has a claim against Universal Construction plc. for his injuries, caused by the poor excavation of the foundations of the office block next to his house and the loss of earnings he experienced while he was at the hospital.

Universal Construction plc. was building a new office block next to Simon´s house. The foundations had been poorly excavated and the office block was half finished, this caused subsidence to occur to Simon´s house, that at the same time caused a wall of Simon´s house to collapse. Simon was inside the house at this moment and he was injured, so he had to spend a month in hospital recovering. Simon is self-employed, so he was unable to tender for some lucrative contracts that possibly would have reported possible earnings of £20.000.

Now I will discuss how the law of negligence must be applied to this case, trying to determine if Simon should be compensated for his injuries and the loss of earnings he experienced.

Reading page 464 of English Law and Lecture 1 slides, we can see that negligence is an example of tort and it is no just careless conduct. To succeed in a negligence action, claimant must prove that the defendant owes duty of care to him, also showing that there is a loss or/and damage caused by that breach of duty.

Alderson B (1856) said ¨negligence is the omission to do something, which a reasonable man, guided upon those considerations, which ordinarily regulate the conduct of human affairs, would do, or doing something which a reasonable prudent man would not do¨.

Applying these words to the case, we can clearly se that Universal Construction plc. was negligent because a reasonable company would have revised, at least one time, the foundations of a building before it was half finished. They will also be negligent, if they had revised the office block and did not wanted to do anything to solve the problem, to avoid spending more money or working more on the building.

In Donoghue v Stevenson (1932), the court held that the neighbour principle should be used to determine the existence of duty of care. For Lord Atkin to decide whether if someone is your neighbour or not, you must make an objective test of proximity and you must study if there is a reasonable foreseeability that the accident will happen, taking a look at the level of care that defendant took while he was working.

To know if Universal Construction plc. owes Simon a duty of care it is essential taking a look to Caparo v Dickman (1990) case, in which the court held that in order to determine whether the defendant owed duty of care we have to make the next questions:

1. Was it foreseeable that the defendant would injure the claimant by the action in question?

In my opinion, of course it was foreseeable that Universal Construction plc. would injure someone one day, because it is foreseeable that if the foundations of a block are poorly excavated and it is already half finished, some day the wall of one neighbour is going to collapse and it is very likely that if someone is inside the house he will be injured.

2.Was there a sufficient proximity between the defendant and the claimant?

Yes there was, Simon was living in the house next to the office block they were building, so there was a geographical proximity between the defendant and the claimant.

3. It is fair, just and reasonable that the court should impose a duty?

In one hand, it is fair, just and reasonable to impose a duty of care to Universal Construction plc. for the injuries and damages that Simon suffered. Hence, they should compensate Simon for the injuries and the physical damage of the house they caused. In the other hand, we must study in depth if Universal Construction plc. owes a duty of care for the loss of earnings that Simon experienced while he was recovering in hospital.

To succeed in this action for negligence, Simon must prove the defendant owed him a duty of care, that the defendant was in a breach of that duty of care and that the damage that was suffered was a direct consequence of the defendant´s breach of duty.

In this case, there is no need to prove this because Simon can be relieved of the burden of proving negligence if the court accepts a plea of res ipsa loquitur, which means that the thing speaks for itself. Simon should use this rule of evidence to demonstrate that the injuries and physical damage of his house would not have existed without the negligence of Universal Construction plc.

The court will infer negligence on the part of defendant without the need for Simon to pinpoint the cause of injury or explain how the defendant failed to take reasonable care. Therefore, Universal Construction will be liable unless they furnish evidence to show that his negligence did not cause Simon´s loss and there is no evidence, so they will be liable for the injuries and the physical damage of the house.

According to the loss of earnings, if we take a look at the case of Spartan Steel Alloys Ltd v Martin and Co Ltd (1972), the Court of Appeal allowed only the claimant´s damages for the spoilt metal and the loss of profit on one melt to be recovered. They refused to allow the claimants to recover their loss of profit, which resulted from the factory being unable to function during the period when there was no electricity. This decision was taken by Lord Denning, who based his decision on remoteness of damage rather than absence of any duty of care to avoid causing economic loss.

Lord Denning concluded that ¨recovering the economic loss is a question of policy, so whenever the courts draw a line to mark the bounds of duty, they do so as a matter of policy so as to limit the responsibility of the defendant¨.

The Court of Appeal also held that the loss of profits on additional melts, however, was a pure financial loss not sufficiently connected with the physical damage and therefore not recoverable.

Applying this rules established in Spartan Steel Alloys Ltd v Martin and Co Ltd (1972) to Simon´s case, the Court of appeal will decide he should not receive a compensation for the loss of earnings, because although it was a consequence of the physical damage that Universal Constructions plc. caused him, it is a remote damage rather than absence of duty of care.

Accordingly,

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