Loss Prevention Loss Prevention Alerts

LPA 06 – An Example of the Restriction on the Recovery of Economic Loss

- uploaded by

Published in February 2000

A recent case there is an interesting example of the law with respect to the restriction on the recovery of economic loss. The defendant built a dairy building for a predecessor in title of Unigate, but due to the defendant’s failure to build a fire wall to a satisfactory height, a fire which broke out in the storage area was able to spread over the top of the wall causing substantial damage to other parts of the dairy building and to the plant, machinery and equipment that was kept there. It was held that the defendant owed a tortious duty of care to Unigate (there being no collateral warranty with them), but that Unigate could only recover in respect of the damage to the plant, machinery and equipment and not in respect of the damage to that part of the building as lay on the far side of the wall beyond which the fire had started.