THE PALACE OF JUSTICE CIVIL APPEAL NO. P-02-2074-2011 ...

contemplate would be affected by his acts or omissions. However,
this duty only extended to latent defects. Accordingly, where a defect
was discovered before any injury to person or damage to property,
other than the defective house itself, had occurred, the loss suffered
by the claimant was pure economic loss and, accordingly, was
irrecoverable because no duty of care was owed in respect of it. The
House of Lords also held that the local authority’s duties were
regulated by public law duties in the form of supervising compliance
with building regulations and so forth. The extension of the local
authority’s duties by the imposition, alongside public regulation, of a
private law duty of care was contrary to public policy and should not
be permitted; such extension was a matter for Parliament. Lord
Mackay of Clashfern, the Lord Chancellor, said (at p. 457):
For this House in its judicial capacity to create a large new area of
responsibility on local authorities in respect of defective buildings would in
my opinion not be a proper exercise of judicial power.
In Governors of the Peabody Donation Fund v Sir Lindsay
Parkinson & Co Ltd [1985] AC 210 at 241 Lord Keith of Kinkel
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