Lorna Armstead v Royal Sun Alliance Insurance Company Limited

Lorna Armstead v Royal Sun Alliance Insurance Company Limited

A bailee (Ms Armstead) cannot recover from a negligent third party (RSA) as damages the sums she is contractually liable to pay to the bailor (Helphire) under clause 16 of the hire agreement for loss of use, because such sums are not a genuine and reasonable pre-estimate of loss directly and foreseeably caused by the tort, but are instead irrecoverable pure economic loss arising from an internal arrangement between bailee and bailor. The proper measure of recoverable loss is the actual loss of use suffered by the bailor, not the contractual sum claimed under clause 16.

Parties
Claimant/appellant: Ms Lorna Armstead; Defendant/respondent: Royal Sun Alliance Insurance Company Limited
Jurisdiction
England and Wales
Judgment Date
28 April 2022
Procedural Posture
Civil Appeal / Appeal From County Court to Court of Appeal
Outcome
appeal dismissed
Legal Topics
Pure Economic Loss, Bailment, Damages for Loss of Use, Negligence, Remoteness of Damage
Tort Law Contract Law Insurance Law Pure Economic Loss Bailment Damages for Loss of Use Negligence Remoteness of Damage

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Parties

Ms Lorna Armstead

Claimant/appellant

Royal Sun Alliance Insurance Company Limited

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From County Court to Court of Appeal

Legal Issues

  1. 1 Whether a bailee (Ms Armstead) can recover as damages from a negligent third party (RSA's insured) the sums she is contractually liable to pay to the bailor (Helphire) under a hire agreement for loss of use of a damaged vehicle.
  2. 2 Whether such sums constitute irrecoverable pure economic loss or recoverable consequential loss.
  3. 3 Whether clause 16 of the Helphire agreement represents a genuine and reasonable pre-estimate of loss recoverable in tort.

Ratio Decidendi

A bailee (Ms Armstead) cannot recover from a negligent third party (RSA) as damages the sums she is contractually liable to pay to the bailor (Helphire) under clause 16 of the hire agreement for loss of use, because such sums are not a genuine and reasonable pre-estimate of loss directly and foreseeably caused by the tort, but are instead irrecoverable pure economic loss arising from an internal arrangement between bailee and bailor. The proper measure of recoverable loss is the actual loss of use suffered by the bailor, not the contractual sum claimed under clause 16.

Court Disposition

appeal dismissed

Orders

  • Appeal dismissed; no recovery for sums claimed under clause 16 of the Helphire agreement.