Civil Engineering Reference
In-Depth Information
disappointed prospective beneficiaries, it is submitted that the principles enunciated
by the court are of general application. The court expounded the view that proxim-
itywastobeassessedbyconsideringwhetheritcouldbesaidthatthepartycausing
thelossassumedresponsibilityinwhateverformtothepartysuferingthatloss.he
court also reaffirmed their commitment to allowing recovery by analogous extension
only. hat is, the court will look to determine whether recovery has been permitted in
similar situations before allowing recovery in the case under consideration. he court
in
White and Another
reiterated their opposition to any
carte blanche
extension of the
law in relation to economic loss. In essence, the law will only be allowed to develop
by increment rather than by quantum leap.
Notwithstanding the above, it must be borne in mind that
Junior Books Ltd
,being
a House of Lords' decision in a Scottish case, is still binding upon Scottish courts. It
has not been overruled by any of the subsequent House of Lords' decisions in English
cases. Instead, its applicability has been stated to be confined only to the very limited
circumstances which pertained to the facts of that case. However, there have been sev-
eral decisions of the Scottish courts which have at least indicated that, while the House
of Lords' decisions in
Murphy
and
D&FEstatesLtd
will be of very high persuasive
authority to a Scottish court, it is perhaps rather premature to assume that such cases
will be followed unquestioningly by Scottish courts or that, as some commentators
would suggest,
Junior Books Ltd
is dead and buried, see
Parkhead Housing Associa-
tion Ltd
v.
Phoenix Preservation Ltd
(1990) and
Scott Lithgow Ltd
v.
GEC Electrical
Projects Ltd
(1992). To conclude this brief overview of economic loss, it is perhaps
worth considering one of the major policy restrictions often cited as the principal
reason for imposing restrictions on the recovery of economic loss, namely the 'flood-
gates' argument. The floodgates argument should not be misunderstood as being a
reflection of the courts' unwillingness to countenance a multitude of claims against
one party. Rather the floodgates argument is the courts' unwillingness to allow liabil-
ity in an indeterminate amount for an indeterminate time to an indeterminate class.
The courts' formulation of the test of proximity will, inevitably, filter out those claims
where liability is indeterminate.
