The ground for actions and any defences
In the case of Murphy v Brentwood, the defendant being the Local Authority had failed to inspect the foundations of a building. The foundations were the result of the building being unstable. The plaintiff could not afford the repairs and had to sell the house at a considerable loss. The loss made on the house, the plaintiff wanted to recover from the Local Authority.
In the case of Anns v Merton 1977, the ground for actions and any defences was if the local authority were bound by a duty of care towards the residents of the flat regarding the inspection of the foundations. Also the time period that was allowed for the claim to be made legitimate, e.g. from the approval of the building work to the sale of the first flat perhaps. Lord Wilberforce then proposed the two stage test. This demonstrated if there was enough of a relationship between the defendant and claimant, meaning if the defendants action were careless would it have an adverse effect on the claimant. If so then what policies would prevent a duty of care.
In the case of Murphy v Brentwood, the plaintiff was insured with Norwich Union and as they commanded, in 1983 he started legal proceedings against the Council. His advisers were confident that they could rely on the Anns v Merton case. But they were a bit apprehensive because if the decision made in Anns could be used against the Council liable for negligence of independent contractors.
In the case of Anns v Merton 1977, at the initial hearing the claimants case failed because action was only taken six years after the first sale of the flat. It was then appealed on the point that action was only taken when it was discovered or should have been discovered. That where there was foreseeability and proximity there should be a duty of care unless there was a policy reason for holding that no duty existed. The court found the tenants were in favour.
In the case of Murphy v Brentwood, the initial hearing decided that the Councils engineers, although chosen with due care had not carefully checked and approved inadequate foundations. Therefore the building was now a hazard to the occupiers. The Council were held liable to the plaintiff, only on the initial hearing. But in 1990, a seven man House of Lords decided that the reference to Anns could be overruled and that the council could not be held liable in the absence of physical injury.
In the case of Anns v Merton 1977, the effect this case had upon the law of tort is that is referenced amongst other cases. Also it showed a test for determining the duty of care in the tort of negligence via the two stage test (Ann’s test). That duty of care should be linked to the statutory powers that were granted to the council and their exercise of due care in those powers. In the case of Murphy v Brentwood 1990, it was the decision of pure economic loss in tort, made by the House of Lords. This case was considered to overrule the case of Anns v Merton 1977.
In the case of Murphy v Brentwood, the effect this case had upon the law of tort is that because of its decision overruling Anns, it bought an end to the preceding twenty years of pure economic loss. The decision held that members of public were no longer entitled to compensation if local authorities negligently fail to protect them against construction industry negligence.
In Donoghue v Stevenson this case established modern concept of negligence in English law. It establishes how one person owes a duty of care towards another. A person can claim damages from another person where that other person owed the first person a duty of care and harmed that person through their conduct in breach of that duty. There was no contractual relationship between Donoghue and the drinks manufacturer, as Donoughe had not ordered or paid for the drink herself. Although there was a contractual relationship between the bar owner and Donoughes friend, the friend had not been harmed by the ginger beer. As ginger beer was not a harmful drink and the manufacturer had not falsely altered it. The legal hearing held that Lord Atkin said “a man has a duty of care to conduct himself in such a way as to avoid harm to others, where a reasonable man would have seen that such harm could occur". The case was returned to Scotland for the Court of Session to apply the ruling to the case. David Stevenson died within a year of the decision and it was settled out of court for less than the original claim of £500.
In the case of Caparo v Dickman, this case also represents a duty of care in law. This is where the three fold test emerged from, showing that if one party owes a duty of care then the following must be known:
Relationship of proximity between defendant and claimant
To impose liability it must be fair, reasonable and just.
Dickman had negligently approved accounts of the company’s profitability. Caparo was to rely on these approved accounts so that the transition of the takeover would be smooth. But once the takeover had been done, the company was in poorer shape than Caparo was led to believe. They sued the auditor for negligence. But the House of Lords held that there was no duty of care between an auditor and a third party of a takeover bid. The audit had been done for the company not the bidder. The bidder could have paid for its own audit. Therefore there was no relationship of proximity, or was it fair, just and reasonable to make the auditor liable for the amount of money that was a loss for the takeover.
In the case of Hedley Byrne v Heller & Partners Ltd, this case represents English tort law in pure economic loss. Where statements made were held to be a duty of care had been rejected, as these issues were only in contract law. The House of Lords held that pure economic loss did not come from a contractual relationship but that of ‘assumption of responsibility’.
This law of tort has many branches, like duty of care, negligence, anns test, neighbour principle, three stage test and pure economic loss. In the law of tort an individual may be owed a duty of care by another, to guarantee that they do not suffer any unreasonable harm. Such cases that link to that statement are that of Donoughe v Stevenson, where the manufacturer owed a duty of care as the ginger beer had been negligently produced. Another principle that can be linked to this case is the neighbour principle. As Lord Atkin had established because it did not matter that the plaintiff was unknown to the manufacturer, as the harm that occurred was foreseeable through the negligence of the drink manufacturer.
Within a contract, the above issues do play a significant part. For example the case of Anns v Merton and its effect on Murphy v Brentwood, because of the direct correlation and its significance on economic loss, this can be linked in the same way to a construction contract. For example if you take out a contract with a contractor to carry out some work, they have been approved but later the works come out to be defective, legal action can be taken because of negligence and a duty of care that is owed upon the contractor to the client to carry out the correct work.