Murphy v Brentwood District Council [1991] UKHL 2, [1991] 1 AC 398

Court: House of Lords

Facts: The case involved Mr. Murphy, who owned a property built on land in Brentwood District Council's jurisdiction. The house was constructed with a defective foundation, leading to subsidence and damage. Murphy sued the Council, claiming negligence for failing to ensure that the builder adhered to building regulations.

Issue: Whether the local authority, Brentwood District Council, could be held liable in negligence for pure economic loss resulting from a defect in the construction of a building.

Held: The House of Lords held that the Council could not be held liable for the damage to Murphy’s property because the loss was purely economic rather than material or physical. The court reasoned that extending liability to cover pure economic loss would create excessively broad liability and introduce concepts akin to product liability and transmissible warranties, which were not intended by the law.

Key Judicial Statement: Lord Oliver stated, "The principle that a duty of care in negligence does not extend to pure economic loss caused by a defect in a building must be maintained. To allow such claims would lead to an unacceptable extension of liability and judicial legislation of warranties for defective buildings."

💡 LevelUpLaw: Murphy v Brentwood District Council is pivotal in defining the boundaries of duty of care in negligence, especially concerning pure economic loss. It confirms that recovery for such losses due to defective buildings is not typically supported, emphasizing the need to avoid broadening negligence claims to include economic damages that arise from defects rather than physical harm.