Murphy v Brentwood District Council
A local authority is not liable in negligence to a house owner for the cost of repairing defects in a house caused by negligent approval of its plans, because the loss is pure economic loss.
Facts
Mr Murphy bought a house built on a concrete raft foundation. The plans for the foundation had been approved by the council, which had relied on the advice of consulting engineers, but the design was defective. The foundation cracked, causing serious damage to the walls and pipes. Mr Murphy could not afford the repairs, and sold the house for about £35,000 less than its value in good condition. He sued the council in negligence.
Legal principle
The House of Lords held that the council was not liable, and overruled Anns v Merton London Borough Council. Lord Keith said that the damage suffered by Mr Murphy was not physical damage to property, but pure economic loss, consisting of the cost of repairing a defect in the house or the reduction in its value. There was no duty of care to avoid such loss in these circumstances, and the complex structure theory, that one part of a building can damage another, was rejected. The proper remedy for a defective product, including a building, lies in contract or under statute, such as the Defective Premises Act 1972.
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
- Junior Books Ltd v Veitchi Co Ltd [1983] 1 AC 520
- Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20, [2022] AC 783
- Meadows v Khan [2021] UKSC 21, [2022] AC 852
- Ross v Caunters [1980] Ch 297
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This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
