Key Case | Spartan Steel v Martin & Co (1973) | Negligence - Pure Economic Loss

In this case it was held that as a matter of policy it should be the law that there is no actionable claim for purely economic loss, to extend the duty to this extent could prove disastrous for defendants.

CASE SUMMARY

Claimant: Factory owner

Defendant: Martin & Co

Facts: Workmen employed by the defendant were digging up the road outside of a factory and negligently damaged an electric cable supplying electricity to the claimant’s factory. The lack of electricity meant that the claimant’s lost profits on the items that they could have produced during the time the factory was not functional.

Outcome: Not liable

Legal principle: Whilst the claimants were compensated for the physical damage to equipment and materials and subsequent loss of profits for those materials that were in use at the time. However, in respect of the loss of profit for the time the factory was closed, it was held that as a matter of policy it should be the law that there is no actionable claim for purely economic loss, to extend the duty to this extent could prove disastrous for defendants.