Case

For educational use only

*27  Spartan Steel & Alloys Ltd. v Martin & Co. (Contractors) Ltd.

Court of Appeal

22 June 1972

Key: Key fact

Legal principle

Claimant’s arguments

Defendant’s argument

Judgement

[1970 S. No. 3104]

[1973] Q.B. 27

Lord Denning M.R., Edmund Davies and Lawton L.JJ.

1972 April 9, 25, 26, 27; June 22

Damages—Remoteness—Economic loss—Contractors negligently damaging cable supplying electricity to factory—Physical damage to metal in factory's furnace as result of power cut—Loss of profit from melt and from melts which would have taken place if no power cut—Whether economic loss recoverable—Whether economic loss attaching to physical loss recoverable—Doctrine of parasitic damages

The defendants' employees were digging up a road when they negligently damaged an electric cable, which the defendants *28 knew was the direct supply from the electricity board's power station to the plaintiffs' factory. The plaintiffs were without electricity until the board was able to repair the cable and immediately the power supply failed, they had to pour molten metal out of their furnace to prevent the metal solidifying and damaging the furnace. As the plaintiffs could not keep the metal at the correct temperature and complete the "melt," the metal depreciated in value by £368 and they lost a profit from the sale of the metal from that melt of £400. They could also have completed four further melts during the power cut and their loss of profit from those melts was £1,767.

In an action for negligence against the defendants, the plaintiffs claimed all three sums as damages, a total of £2,535. The defendants admitted negligence and liability for the physical damage of £368 but denied liability for the plaintiffs' economic loss. The plaintiffs contended that the defendants were liable for their economic loss and that there was a doctrine in English law of "parasitic damages" by which damages not recoverable in themselves could be...