Armstead v Royal & Sun Alliance Insurance Company Ltd

Armstead v Royal & Sun Alliance Insurance Company Ltd

A contractual liability incurred by a bailee as a direct consequence of physical damage to the bailed property is recoverable from the tortfeasor, provided the liability is a reasonable pre-estimate of the loss of use suffered by the bailor. The defendant bears the burden of proving that the sum claimed is not a reasonable estimate and thus too remote. In this case, the respondent failed to plead or prove that the clause 16 sum was not a reasonable pre-estimate, so the sum is recoverable.

Parties
Appellant/claimant: Lorna Armstead; Respondent/defendant: Royal & Sun Alliance Insurance Company Ltd
Jurisdiction
England and Wales
Judgment Date
14 February 2024
Procedural Posture
Civil Appeal (tort Negligence) / Supreme Court (third Appeal, Judgment)
Outcome
Appeal allowed. Judgment for the appellant.
Legal Topics
Negligence, Pure Economic Loss, Remoteness of Damage, Bailment, Damages, Consumer Contracts, Penalty Clauses, Unfair Terms
Tort Law Contract Law Consumer Protection Negligence Pure Economic Loss Remoteness of Damage Bailment Damages +3 more

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Parties

Lorna Armstead

Appellant/claimant

Royal & Sun Alliance Insurance Company Ltd

Respondent/defendant

Procedural Posture

Civil Appeal (tort Negligence) / Supreme Court (third Appeal, Judgment)

Legal Issues

  1. 1 Whether a contractual liability to pay a sum for loss of use of a hire car, arising from physical damage caused by a third party's negligence, is recoverable as damages by the hirer from the negligent party's insurer.
  2. 2 Whether such loss is irrecoverable as pure economic loss or as being too remote.

Ratio Decidendi

A contractual liability incurred by a bailee as a direct consequence of physical damage to the bailed property is recoverable from the tortfeasor, provided the liability is a reasonable pre-estimate of the loss of use suffered by the bailor. The defendant bears the burden of proving that the sum claimed is not a reasonable estimate and thus too remote. In this case, the respondent failed to plead or prove that the clause 16 sum was not a reasonable pre-estimate, so the sum is recoverable.

Court Disposition

Appeal allowed. Judgment for the appellant.

Orders

  • Judgment entered for Ms Armstead for the clause 16 sum of £1,560.