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The requirements for imposing a duty of care are the same whether the
loss caused by the breach of duty is physical damage or purely economic
loss. Whatever the nature of the damage sustained, it is necessary to
consider the foreseeability of the damage, the nature of the relationship
between the parties and whether it is fair, just and reasonable to impose
a duty of care.
The Court of Appeal allowed an appeal by the third defendant,
classification society Nippon Kaiji Kyskai, against Mr Justice Hirst's
decision, on a preliminary point of law, that on the facts pleaded the
society owed a duty of care to the plaintiff cargo owner, Marc Rich & Co.
Two weeks after the Nicholas H embarked on her voyage from Peru to
Italy loaded with cargoes of lead and zinc concentrate, she anchored off
San Juan, having reported a crack in her hull.
After some repairs a surveyor acting on behalf of her classification
society recommended that the vessel continue but that the repairs
should be dealt with at the earliest opportunity after discharge of the
cargo. The day after the vessel sailed from San Juan in Peru she
reported that the temporary welding repairs had cracked, and she sank a
few days later. The cargo was totally lost.
The cargo owner's proceedings against the shipowners were settled by a
payment of a proportion of its claim. The classification society was sued
in negligence for the balance of the claim.