ICAEW BL · Chapter 5 · Question 10 of 10
A firm negligently installs a heater in an office, and a fire is a foreseeable result. The fire spreads far more widely than anyone would have expected and destroys an adjoining archive. Applying The Wagon Mound principle, is the firm liable for the damage to the archive?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Yes, because the type of damage (fire damage) was reasonably foreseeable, even though its extent was not
Explanation
The Wagon Mound (No 1) held that a defendant is liable only for damage of a reasonably foreseeable type. Once the type of damage is foreseeable, the defendant is liable for its full extent, even if that was not foreseeable (Hughes v Lord Advocate, Vacwell). The 'direct consequences' test in Re Polemis was rejected. Physical damage to property is not pure economic loss.
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