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View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by UC Research Repository NON PHYSICAL DAMAGE A COMPARATIVE PERSPECTIVE JULIO ALBERTO DIAZ A thesis presented to The University of Canterbury In partial fulfilment of the requirements For the degree of Doctor of Philosophy in Law To my mentors: Dr. Maria Emilia Lloveras (in memoriam) and Dr. João Baptista Villela ACKNOWLEDGMENTS I am heartily thankful to my supervisor, Professor Stephen Todd, for his invaluable guidance, and assistance. I would also like to thank the University of Canterbury for the financial support that made this thesis possible as well as the Law Library staff for their constant help (always with a smile). Finally, my acknowledgment to the Yale Law School for allowing me to spend a summer researching in its fantastic library. Table of Contents PREFACE i PART I: PSYCHIATRIC INJURY 1 CHAPTER 1: THE COMMON LAW 1 1.1 Introduction 1 1.2 Intentional infliction of mental suffering 3 1.3 The impact theory of recovery: the Coultas case 5 1.4 The zone of danger approach 8 1.5 Fear of peril or harm to others. 10 1.6 Foreseeability of the plaintiff 12 1.7 The categorization of the victims 18 1.7.1 Generally 18 1.7.2 Page v Smith: Primary victims 19 1.7.3 The Hillsborough tragedy: secondary victims 22 1.8 The class of persons who can claim for nervous shock 23 1.9 Proximity in time and space 27 1.9.1 Generally 27 1.9.2 The immediate aftermath of an accident 32 1.9.3 Shocking events on television 36 1.9.4 Immediate sight or hearing 40 1.9.5 Proximity in other common law jurisdictions 42 (a) Canada 42 (b) Australia 43 (c) South Africa 50 1.10 The ‘sudden shock’ requirement 51 1.10.1 The rule in Alcock 51 1.10.2 The rule in other jurisdictions 56 1.11 The twist in the reasonable foreseeability test 57 1.12 Reasonable foreseeability: prospectively or ex post facto ? 60 1.13 The ‘normal fortitude’ requirement 63 1.13.1 Generally 63 1.13.2 The rule in other common law jurisdictions 67 (a) Canada 67 (b) Australia 68 1.14 Bystanders 69 1.15 Rescuers 73 1.15.1 Generally 73 1.15.2 Who is a rescuer? 78 1.15.3 The fireman’s rule 84 1.16 Employees 85 1.17 Occupational stress 88 CHAPTER 2: THE CIVIL LAW 1. Damage 91 1.1 The principle of full compensation 97 1.2 The scope of protection in France 98 1.3 The scope of protection in Germany 101 1.3.1 Generally 101 1.3.2 Injury to life 102 1.3.3 Injury to body 104 1.3.4 ‘Another right’ 107 1.4 Psychiatric harm in civil law 108 1.5 Conclusions 114 PART II: ECONOMIC LOSS 116 Introduction 116 CHAPTER 3: THE COMMON LAW 119 2.1 The rule in Hedley Byrne v Heller 119 2.1.1 Background 119 2.1.2 Lord Denning’s dissent at the House of Lords 130 2.1.3 Voluntary assumption of responsibility 136 2.1.4 The choice model 141 2.1.5 The voluntary action model 141 2.1.6 Reliance 142 2.1.7 The requirement of special skill or knowledge 143 2.1.8 To whom does the duty extend 149 2.1.9 Hedley Byrne in other common law jurisdictions 155 (a) Canada 155 (b) Australia 157 (c) New Zealand 159 2.2 Relational economic loss 162 2.2.1 Generally 162 2.2.2 The exclusionary rule 164 2.2.3 Relational loss in other common law jurisdictions 174 (a) Australia 174 (b) Canada 177 2.3 Defective products or building structures 182 2.3.1 Generally 182 2.3.2 The decision in Murphy v Brentwood District Council 188 2.3.3 Murphy in other Commonwealth jurisdictions 194 (a) Canada 195 (b) Australia 198 (c) New Zealand 202 2.4 Residual categories of claims 207 2.4.1 Disappointed beneficiaries 207 2.4.2 Employment references 209 2.4.3 Freezing injunctions 211 CHAPTER 4: THE CIVIL LAW 215 2.1 Economic loss in Germany 215 2.1.1 Generally 215 2.1.2 Economic loss and the ‘right of an established and operating business.’ 217 2.1.3 Economic loss resulting from interference with the use and enjoyment of property 222 2.1.4 Economic loss and contract remedies 225 2.1.5 Pure economic loss resulting from conduct contra bonos mores 229 2.1.6 Other provisions 231 2.2 Economic loss in France 232 2.2.1 Generally 232 2.2.2 The cable cases 235 2.2.3 Other situations 237 2.2.4 The manipulation of causal requirements 237 2.2.5 Auditor’s liability 239 2.2.6 Liability for economic loss without fault 242 2.3 Economic loss in Italy 243 2.4 Economic loss in The Netherlands 245 2.5 Conclusions 248 PART III: CONCLUSIONS 251 Table of cases 267 Bibliography 271 i PREFACE The interest of jurists in legal systems other than their own has been a matter of long tradition. All legal systems have the same purpose of regulating and harmonizing the human activity within their respective societies, and in each society the legal system forms part of the culture and civilization as well as of the history and the life of its people. Many legal problems are conceptually the same wherever they arise. Jurists from different systems confront the same problems. Sometimes codes and case law give the same answer, sometimes those answers are different; if this was the case, I wanted to explore whether some answers were better than others. It would certainly not be accurate to say that there has been no approximation between the civil law and the common law traditions. Arguments that these two systems are drawing progressively closer can be heard more and more often. In spite of having started from opposite extremes, it is said that as a result of the movements the civil law and the common law have made in the direction of the other, there is no longer much difference between them. The same social needs, and similar economic and technical conditions, have led to the adoption of similar solutions for their legal problems. However, even admitting as a fact that the results might be close to each other, the methods used to reach them are nevertheless extremely divergent. After all, the ‘idioms of legal thought’ and the guiding habits of mind are different. A civilian naturally reasons from principles to instances, the common lawyer from instances to principles. The civilian puts his faith in syllogisms, the common lawyer in precedents; the first silently asking himself as each new problem arises, ‘What should we do this time?’ and the second asking aloud in the same situation, ‘What did we do last time?’ The civilian thinks in terms of rights and duties, the common lawyer in terms of remedies. The civilian is chiefly concerned with the policy and rationale of a rule of law, the common lawyer with its pedigree. The instinct of a civilian is to systematize, the working rule of the common lawyer is solvitur ambulando.1 By the end of the nineteenth century, Oliver Wendell Holmes was telling Americans not to study civil law because ‘it tends to encourage a dangerous reliance…on glittering generalities’ instead of ‘the exhaustive analysis of a particular case which the common law begins and ends.’2 It has not always been so. At the beginning of the same century, new 1 Thomas Mackay Cooper, ‘The common law and the civil law-A Scot’s view.’ (1950) 63 Harvard Law Review 468, 470 2 Oliver W Holmes, ‘Misunderstandings of the Civil Law.’ (1871) 6 American Law Review, 37, 49. ii translations appeared of Grotius, Puffendorf, Pothier and Domat.3 Courts and treatise writers used them. An English judge praised Pothier as the highest authority one could cite next to an English case.4 A New York court consulted Grotius, Puffendorf and Barbeyrac to decide who owned a fox caught on Long Island, a decision that still appears in many American casebooks.5 At no point does this thesis have the purpose of pretending to demonstrate the cultural superiority of one system over the other. Each system possesses strong characteristic of a distinct and comprehensive nature that establishes its own individuality. In its own ethnic and historical framework, each system serves well the society in which it functions; each has demonstrated its ability to satisfy the social and economic needs of a world in constant change. Each has also maintained a balance between the elements of flexibility and adaptation, on the one hand, while assuring the essential attributes of stability and security, on the other. I assumed from the beginning that comparative law is much more than a set of different legal rules. It has a historical, political, social and cultural dimension. The law is rooted in the culture, it reflects the Volksgeist (the spirit of the People) and it responds to the specific demands of a given society in a given time and place. Substitution of one legal tradition for another would neither be possible nor desirable. At the start of this research, a shocking contrast between styles revealed that the difficulties were going to be huge. To a civilian lawyer who was having his first contact with the common law, it looked as if I had in front of my eyes a gigantic, disorganized, amorphous mass of cases.
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