Spartan Steel v Martin [1973] QB 27

Key point

  • Pure economic loss (which is not as a consequence of physical damage) is not recoverable in negligence

Facts

  • D contractors of the electricity board negligently drove a power shovel though a cable which supplied electricity to C’s factory, causing a power cut
  • C sought to claim damages for the following losses:
    1. Reduction in value of the metal that had to be removed from furnace before it solidified and damaged machinery
    2. Consequential loss of profits from the damaged metal
    3. Loss of profits due to the downtime that prevented factory work from being carried out

Held (Court of Appeal)

  • Only damages for physical damage and consequential loss were awarded
  • The loss of profits from the downtime is a pure economic loss that is not recoverable

Commentary

  • Assumption of responsibility does not apply in this case since the damage was not caused by the negligent provision of professional services
  • Although the cable was damaged, it did not belong to C but to the electricity board, therefore the loss of profits from the downtime was not consequential loss