Understanding the Effects of the Floodgates Argument On Cases Involving Psychiatric Injury and Economic Loss - Coursework Example

Understanding the Effects of the Floodgates Argument On Cases Involving Psychiatric Injury and Economic Loss I. Introduction The floodgates argument is based on the notion that when certain causes of action are allowed at one time, it would open the floodgates of litigation and swamp the counts with several claims of the same nature that the efficiency of the court to administer justice is compromised (Lunney and Oliphant, 2008). Based on this argument, many worthy claimants have been denied remedies by the courts. As it is, this argument has been largely criticized in a number of decisions of the courts (see McLoughlin v OBrian1. However, despite the many criticisms against this argument, the courts are persuaded to consider this argument when setting qualifications for recovery of damages in cases involving psychiatric injury or nervous shock and in claims of pure economic loss. To give us a clear picture of how the floodgates argument has helped shaped rulings of the courts in cases involving psychiatric injury or nervous shock and in claims of pure economic loss, let us discuss these issues one by one. II. Nervous Shock Because of fear of opening the floodgates of litigation, the courts have been extremely cautious when it comes to evaluating cases involving nervous shock or psychiatric injury. In the case of Bell v GN Railway Co2, the court first acknowledge the ill effects of nervous shock when it said that “the plaintiff (had) sustained a nervous shock which resulted in certain injuries to his health.” However, it was not until the decision of Dulieu v White3 when the English court actually acknowledge the fact that nervous shock can have some negative physical impacts on the victim. Later on, in the case of Hambrook v Strokes Bros4, the court ruled that damages may be awarded when the nervous shock resulted in a situation where relatives of the victims were involved. Technically, there are two types of victims in this case. The primary victim who may be directly involved in the incident (Page v Smith5) and the secondary victim who suffers psychiatric damage resulting from the harm done to another person who is close to him or her (McLoughlin v OBrian6). In both cases, the courts have been quite reluctant to award damages fearing that such award will open the floodgates of litigation. In the case of Page v Smith7, imposed several limiting factors to the recovery of damages. These factors as follows (a) the nervous shock or psychiatric injury must be the product of the claimants (b) the relationship between the victim and the person who suffered nervous shock (c) the shock must be foreseeable and must be separate from psychiatric damage resulting from other forms of personal injury and (d) the person suffering from nervous shock must not be unduly susceptible to psychiatric reactions. When it comes to secondary victims, the court somehow relaxed its rules in the case of McLoughlin v O’Brian8. According to the court in this case, the perception of the senses is sufficient in order for the claimant to recover damages based on nervous shock. In other words, the claimant need not be present at the scene to suffer from nervous shock (see McLoughlin v O’Brian9). The decision of the court in McLoughlin v O’Brian has been largely criticized using the floodgates argument. Accordingly, the more of less lenient criteria of the court in awarding damages for nervous shock has the potential of opening the floodgates of litigation. Consequently, Lord Wilberforce proposed to lay down limitations as to who should be awarded damages for nervous shock. According to him, he following elements should be met before damages for nervous shock can be awarded (a) there should be a certain class of persons who can file claims (b) that claimant should have proximity to the incident and (c) the means by which the shock was caused should be defined. These criteria were later on used by the court in deciding the case of Alcock v Chief Constable of South Yorkshire Police10. According to the decision of the court in this case, for a person to recovery damages arising from nervous shock, he or she must satisfy the following requirements (a) the defendant’s negligence results to a foreseeable psychiatric illness on the part of the claimant due to his or her “close relationship of love and affection” with the victim (b) there is physical and temporal proximity between the accident and the claimant (c) the nervous shock must come through the claimant’s own sight or hearing of the incident or its immediate aftermath. (See also McFarlane v EE Caldeonia Ltd11; Vernon v Bosley (No 1)12; Greatorex v Greatorex and Others13). III. Economic Loss Because of fear of spurious actions arising from a tortuous act, the court has been reluctant to award damages for pure economic loss to claimants. To ensure that the courts are not flooded with claims, the courts developed some control mechanisms that effective limits the recovery of damages for economic loses. Technically, there are two broad categories where claimants may recover damages for economic loss. First, the claimant can recover damages as consequence of physical damage on the property of another person and second, when the claimant acquired a defective item or property. In the first category, there are three instances when claimants cannot successfully sue for damages. First, in cases where the damage sustained is such that it interrupts the claimant’s ability to carry on his business (see Cattle v Stockton Waterworks14; Weller v Foot and Mouth Disease Research Institute15). An exception to this rule is the case of Spartan Steel & Alloys v Martin16, where the court specifically said that claims for damages on purely economic basic is untenable but claims for damages based on economic loss consequent upon physical damage is recoverable. In other words, where the claims was filed based on physical damage suffered, the claim may proper. Second, the claimant must have a contractual right over the use of the property for his or her business in order for him or her to be able to recover damages (Candlewood Navigation v Mitsui17). Third, when the loss is a result of damage to property owned by a third party where the claimant is at risk to the loss at the time the damage was sustained under a contract with a third person, the claimant cannot recover damages (see Leigh v Aliakmon Shipping18). In the second category, the House of Lords held that claimants cannot recover damages on pure economic loss for acquiring defective items or property (see Dutton v Bognor Regis UDC19; Anns v Merton LBC20; Murphy v Brentwood DC21. The Court temporarily diverted from its rulings not to allow recovery of damages based on pure economic loss in the case of Junior Books v Veitchi22 but it later on said that this case is unique in itself and should not be made as a general basis to recover damages. According to the court, the relationship between the complainant and the respondent in the case of Junior Books v Veitchi gave rise to a special situation. Note that Veitchi is this case is a specialist flooring contractor engaged by Junior Books. The floor installed by Veitchi and Junior Books have to relay the flooring. In a rare act, the court allowed Junior Books to recover economic damages based on the fact that there was a contractual relationship between the parties. After the somewhat controversial decision of the court in the case of Junior Books, the court returned to its strict ruling when it comes to awarding pure economic damages. In the subsequent cases of Muirhead v Industrial Tank Specialities23; Simaan General Contracting v Pilkington Glass (No 2)24; Greater Nottingham Co-op Society v Cementation Piling & Foundations25, the court reiterated its stand that damages may not be recovered based on pure economic loss. Bibliography Books 1. Horsey, K & Rackley,E. (2009) Tort Law Oxford University Press, Oxford 1st ed 2. Lunny M., Oliphant K. (2008) Tort Law: Text and materials, Oxford University Press Table of Cases 1. Alcock v Chief Constable of South Yorkshire Police [1992] 1 A.C. 310 2. Anns v Merton LBC [1977] 2 All ER 492 3. Bell v GN Railway Co (1890) 26 L.R. (IR) 428 at 442 4. Candlewood Navigation v Mitsui [1985] 2 All ER 935 5. Cattle v Stockton Waterworks (1875) LR 10 QB 453 6. Dulieu v White[1901] 2 K.B. 669 7. Dutton v Bognor Regis UDC [1972] 1 QB 373 8. Greater Nottingham Co-op Society v Cementation Piling & Foundations [1988] 2 All ER 971 9. Greatorex v Greatorex and Others [2000] Times Law Report May 5 10. Hambrook v Strokes Bros [1925] 1 K.B. 141 11. Junior Books v Veitchi [1982] 3 All ER 201 12. Leigh v Aliakmon Shipping [1986] 2 All ER 145 13. McFarlane v EE Caldeonia Ltd [1994] 2 All ER 1 14. McLoughlin v OBrian [1983] 1 AC 410 15. Muirhead v Industrial Tank Specialities [1985] 3 All ER 705 16. Murphy v Brentwood DC [1990] 2 All ER 908 17. Page v Smith [1995] 2 All ER 736 18. Simaan General Contracting v Pilkington Glass (No 2) [1988] 1 All ER 791 19. Spartan Steel & Alloys v Martin [1972] 3 All ER 557 20. Vernon v Bosley (No 1) [1997] 1 All ER 577 21. Weller v Foot and Mouth Disease Research Institute [1966] 1 QB 569 Read More