Junior Books Ltd v Veitchi Co Ltd
A subcontractor who laid a defective floor was liable in negligence for the economic loss of the building owner, because of the very close relationship between them.
Facts
Junior Books engaged a building contractor to build a factory. On the advice of Junior Books' architects, the contractor engaged Veitchi, specialist flooring subcontractors, to lay the floor. There was no contract between Junior Books and Veitchi. The floor was defective and started to crack, although it was not dangerous. Junior Books claimed the cost of replacing the floor and its loss of profits while the work was done.
Legal principle
The House of Lords held, by a majority, that Veitchi was liable. Lord Roskill said that the relationship between the parties was so close as to be almost equivalent to contract, because Junior Books had nominated Veitchi as specialists, relied on their skill and experience, and Veitchi knew this. The case has since been treated as confined to its own facts, and has not been followed in later cases on pure economic loss.
Related cases on pure economic loss and negligent misstatement
- Customs and Excise Commissioners v Barclays Bank plc [2006] UKHL 28, [2007] 1 AC 181
- Esso Petroleum Co Ltd v Mardon [1976] QB 801
- Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465
- Henderson v Merrett Syndicates Ltd [1995] 2 AC 145
- Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20, [2022] AC 783
- Meadows v Khan [2021] UKSC 21, [2022] AC 852
- Murphy v Brentwood District Council [1991] 1 AC 398
- Ross v Caunters [1980] Ch 297
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