Environmental Torts And Pure Economic Loss
An environmental civil action has been struck out recently. The claimants had suffered loss but were unable to demonstrate any form of tangible physical damage.
The case of D Pride & Partners & Others v Institute for Animal Health & Others arose out of an outbreak of foot and mouth disease in 2007. It was first identified at a farm in Surrey which was three miles away from a research facility operated by The Institute for Animal Health ("IAH") and Merial Animal Health Limited ("MAH").
Following the outbreak, animals were culled, a restricted zone across the whole of England was declared, and a ban on animal exports into the European Union was imposed.
Fourteen livestock farmers brought claims against IAH and MAH, together with the Secretary of State for Environment, Food and Rural Affairs as licensor and regulator of the research facility. Liability in tort (negligence, nuisance and the rule in Rylands v Fletcher) was alleged following the release of the virus from the facility.
Seven of these farmers had had to cull their livestock. These claims were quickly settled. The remaining seven had not had to cull livestock, but claimed that they suffered losses as a result of being unable to move livestock freely, for example in relation to lost milk production, loss of condition, failure to slaughter/mate at the optimum time, lost calves, and poor sale prices.
IAH, MAH and the Secretary of State brought an action to strike the claims out on the basis that they disclosed no good cause of action and/or that there was no real prospect of success.
On 31 March 2009, the High Court agreed that the claims should be struck out. It was of the view that losses claimed by the claimants were (except for a few smaller items, for example lost calves and loss of condition) pure economic loss. The losses were not consequent on any physical damage to the livestock, which is usually a pre-requisite to a claim in negligence, nuisance and the rule in Rylands v Fletcher.
The claimants tried to overcome this point by arguing that the farmers and the defendants were actually in a...
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