Reavis v Clan Steamliners, (1925) 21 Ll.L.Rep. 388, CSIH
Citation:Reavis v Clan Steamliners, (1925) 21 Ll.L.Rep. 388, CSIH
Rule of thumb: If a person is killed through negligence, and a business loses an important employee costing them money, can the business sue the shipping company for this loss? No, this loss is not recoverable due to the remoteness of losses rule.
Judgment:
The basic facts of this case was that many members of an orchestra had been on a ship when it sunk due to negligence in how it was sailed, resulting in these orchestra member dying. A remaining member of the orchestra sought to sue the ship company for loss of wages in no longer being able to earn money due to the orchestra ending. It was held that this was secondary economic loss and did not meet the remoteness test needed for damages, ‘The particular point involved was whether insurers of a vessel were entitled to claim damages arising from a collision in circumstances where the owner himself could not have done so; and, in discussing the argument put forward by the insurers Lord Penzance points out the endless litigation which would arise f rights of action were allowed to those who by contract had an indirect interest in the lines or services of persons in the preservation of property and negatives of existence of any such rights of action. The ratio of this view I take to be that the injurious consequences arising to such persons through injury to, or destruction of, life or property are indirect or remote damages which the law will not allow. To state the matter another way, liability for damage must be founded on the breach of duty owed to the persons claiming damages. Applying the general rule to the present case, I think that shipowners have duty to carry their own passaengers safely and to avoid injuring passengers on other ships, but they have no duty to persons who may by contract or otherwise be interested in the safety of the passengers’
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