In Murphy v Brentwood DC [1990], cracks in the wall of a new house in which the design had been negligently approved by the council were considered to be pure economic loss.

Question

Quizplus · Accepted Answer

The statement is true. Whereas in Anns the same harm had been categorised as 'material physical damage' by Lord Wilberforce, this point was actually overruled by the House of Lords in Murphy, which returned to first principles and categorised the financial loss suffered when such damage occurs to a house (or other item of property) as a decrease in value only and therefore a pure economic loss. Murphy was one of the cases which came at the culmination of the closing down of the areas in which recovery for pure economic loss could be made (alongside Caparo Industries v Dickman [1990]).

In Murphy V Brentwood DC [1990], Cracks in the Wall