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Liesbosch Dredger v SS Edison [1933] AC 449

Economic Loss – Negligence – Remoteness of Damage – Damages – Foreseeability

Facts

The complainant’s dredger, Liesbosch, were negligently damaged and sunk by the owner of the Edison in Greece. At the time, the complainant had a contract with Harbour Commissioners for construction on the harbour and they needed this dredger in order to successfully carry out the work. But, the complainants could not afford to buy a replacement dredger and they were forced to hire a substitute. However, this would work out more expensive for the complainants.

Issues

The defendant admitted liability for negligently sinking the Liesbosch, but the issue concerned how the damages should be calculated. The complainants had claimed their actual loss and argued that all of the circumstances should be taken into account for damages, including their additional expenses for their hiring contract.

Held

It was held that the complainant could not claim for their additional hire contract expenses, as this was not foreseeable by the defendants. The only recoverable damages would be the market price of the replacement for the Liesbosch dredger. This would also include any costs that were incurred for insuring and adapting the new vessel, in order for it to be similar to the Liesbosch that was lost. This would allow the complainants to complete the contract. In addition, damages would include compensation for the contract during the loss of the dredger and until the new one could be reasonably available. This case became the authority for economic loss.


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