Also known as: Spartan Steel & Alloys Ltd v Martin & Co (Contractors) Ltd
Court: Court of Appeal (Civil Division)
Judgment Date: 22 June 1972
Where Reported: [1973] Q.B. 27; [1972] 3 W.L.R. 502; [1972] 3 All E.R. 557
Legal Issues in Spartan Steel v Martin
The legal issue in Spartan Steel v Martin was regarding the recoverability of purely economic loss in negligence cases.
Spartan Steel v Martin case raised the question of whether economic loss, unrelated to physical damage, was recoverable for breach of duty in negligence, even in the absence of physical harm to the claimant’s property or person.
Material Facts in Spartan Steel v Martin
The case involved a claim for damages by Spartan Steel against Martin & Co. The claimant sought to recover economic loss resulting from the interruption of the electric power supply to their factory, which was caused by the defendants’ alleged negligence.
The claimant argued that the defendants owed them a duty to take reasonable care to avoid acts liable to cause economic loss, and that such economic loss was recoverable for breach of that duty.
The defendants admitted liability for the direct physical damage to the claimant’s property but contested liability for the economic loss unrelated to physical damage.
Judgment in Spartan Steel v Martin
The Court of Appeal held that the defendants were liable for the economic loss suffered by the claimant.
The judgment affirmed the recoverability of economic loss for breach of duty in negligence, even in the absence of physical damage to the claimant’s property.
The court’s decision was based on the recognition that economic loss, if a direct and reasonably foreseeable consequence of the defendants’ negligence, was recoverable, irrespective of the absence of physical damage to the claimant’s property.
The Reason for the Decision in Spartan Steel v Martin
The court’s decision was grounded in the principle that the recoverability of economic loss in negligence cases should not be contingent upon the existence of physical damage.
The court emphasised that the key consideration was whether the economic loss was a direct and reasonably foreseeable consequence of the defendants’ negligence.
The judgment underscored the importance of foreseeability and directness in determining the recoverability of economic loss, irrespective of the absence of physical harm to the claimant’s property.
The court rejected arguments that sought to limit the recoverability of economic loss solely to cases involving physical damage, highlighting the need to focus on the foreseeability and directness of the economic loss resulting from the defendants’ negligence.
The court’s reasoning was also influenced by the recognition of the principle that the nature of the damage is not a factor determinant of legal principle once the duty of care is established.
The judgment emphasised that each case must be decided on its facts to determine whether the defendant owed a duty to the plaintiff, and once the duty is established, the extent of the damage is immaterial.
This principle underscored the court’s decision to allow the recovery of economic loss, irrespective of the absence of physical damage, based on the existence of a duty of care owed by the defendants to the claimant.
Legal Principles in Spartan Steel v Martin
The case of Spartan Steel v Martin established the legal principle that economic loss, if a direct and reasonably foreseeable consequence of the defendants’ negligence, is recoverable in negligence cases, irrespective of the absence of physical damage to the claimant’s property.
The decision emphasised the importance of foreseeability and directness in determining the recoverability of economic loss, highlighting that the nature of the damage is not a factor determinant of legal principle once the duty of care is established.
This principle set a precedent for the recognition of the recoverability of economic loss in negligence cases, based on the existence of a duty of care owed by the defendants to the claimant, and the direct and reasonably foreseeable consequence of the defendants’ negligence
