Liesbosch Dredger v SS Edison [1933] AC 449
Economic Loss – Negligence – Remoteness of Damage – Damages – Foreseeability
Facts
The complainant’s dredger, Liesbosch, were negligently damaged and sunk by the owner of the Edison in Greece. At the time, the complainant had a contract with Harbour Commissioners for construction on the harbour and they needed this dredger in order to successfully carry out the work. But, the complainants could not afford to buy a replacement dredger and they were forced to hire a substitute. However, this would work out more expensive for the complainants.
Issues
The defendant admitted liability for negligently sinking the Liesbosch, but the issue concerned how the damages should be calculated. The complainants had claimed their actual loss and argued that all of the circumstances should be taken into account for damages, including their additional expenses for their hiring contract.
Decision/Outcome
It was held that the complainant could not claim for their additional hire contract expenses, as this was not foreseeable by the defendants. The only recoverable damages would be the market price of the replacement for the Liesbosch dredger. This would also include any costs that were incurred for insuring and adapting the new vessel, in order for it to be similar to the Liesbosch that was lost. This would allow the complainants to complete the contract. In addition, damages would include compensation for the contract during the loss of the dredger and until the new one could be reasonably available. This case became the authority for economic loss.
Updated 19 March 2026
This article remains broadly accurate as a summary of the original Liesbosch Dredger v SS Edison [1933] AC 449 decision and its immediate ratio. However, readers should be aware of a highly significant subsequent development: the House of Lords in Lagden v O’Connor [2003] UKHL 64 expressly overruled the central principle from Liesbosch that a claimant’s impecuniosity (poverty) could break the chain of causation and limit recoverable damages. The House of Lords held that where a claimant cannot afford to purchase a replacement and must instead hire at greater expense, those additional costs are recoverable provided the loss was a foreseeable type of loss caused by the defendant’s tort. The thin skull (or egg-shell skull) rule applies: a defendant must take the claimant as they find them, including their financial circumstances. Accordingly, the rule in Liesbosch — that a claimant’s impecuniosity is too remote to found a claim for additional loss — no longer represents good law. The case retains historical importance and is still cited in discussions of remoteness and economic loss, but its core holding on impecuniosity has been superseded by Lagden v O’Connor. Students should ensure they address this development in any assessed work.
