SCM (United Kingdom) Ltd v W J Whittall and Son Ltd: CA 1970

The defendants’ workmen damaged an electric cable belonging to the electricity board, cutting off several factories, including the plaintiff’s. The defendant sought to have the claim struck out.
Held: The part of the claim arising from physical damage was not struck out, but that for economic loss was. Economic loss ought not to be put on one pair of shoulders, but spread among all the sufferers.
Lord Denning said: ‘I must not be taken, however, as saying that economic loss is always too remote. There are some exceptional cases when it is the immediate consequence of the negligence and is recoverable accordingly. Such is the case when a banker negligently gives a good reference on which a man extends credit, and loses the money. The plaintiff suffers economic loss only, but it is the immediate – almost, I might say, the intended – consequence of the negligent reference and is recoverable accordingly: see Hedley Byrne and Co. Ltd. v. Heller and Partners Ltd. [1964] A.C. 465. Another is when the defendant by his negligence damages a lorry which is carrying the plaintiff’s goods. The goods themselves are not damaged, but the lorry is so badly damaged that the goods have to be unloaded and carried forward in some other vehicle. The goods owner suffers economic loss only, namely, the cost of unloading and carriage, but he can recover it from the defendant because it is immediate and not too remote. It is analogous to physical damage: because the goods themselves had to be unloaded. Such was the illustration given by Lord Roche in Morrison Steamship Co. Ltd. v. Greystoke Castle (Cargo Owners) [1947] A.C. 265. Likewise, when the cargo owners have to pay a general average contribution. It is not too remote and is recoverable.
Seeing these exceptional cases you may well ask: How are we to say when economic loss is too remote or not? Where is the line to be drawn? Lawyers are continually asking that question. But the judges are never defeated by it. We may not be able to draw the line with precision, but we can always say on which side of it any particular case falls.’

Lord Denning
[1971] 1 QB 337, [1970] 3 All ER 245, [1970] 3 WLR 694
England and Wales
Cited by:
CitedDutton v Bognor Regis Urban District Council CA 1972
The court considered the liability in negligence of a Council whose inspector had approved a building which later proved defective.
Held: The Council had control of the work and with such control came a responsibility to take care in . .
CitedD Pride and Partners (A Firm) and Others v Institute for Animal Health and Others QBD 31-Mar-2009
The claimants sought damages after the loss of business when the defendants’ premises were the source of an outbreak of foot and mouth disease. The organism had escaped from their premises via a broken drain.
Held: Much of the damage claimed . .

Lists of cited by and citing cases may be incomplete.

Damages, Utilities

Leading Case

Updated: 01 November 2021; Ref: scu.186894