Agreement

The claim for damage to the Esso Bernicia, the loss of the oil and consequential loss presented no real problem, and the House of Lords held that Esso could probably also claim the sum it had by Statute to pay the owner of the jetty for colliding with it (the applicable law was Scottish law which is quite different in many ways from English law and the Statute just referred to is not applicable in English law), but the other claims had been dismissed in the lower courts and Esso’s appeal on these failed. Insofar as Esso relied on its payments to the crofters and BP as constituting a loss to itself, the difficulty was that such loss was purely economic. Esso sought to contend that it was consequent on the physical damage sustained by its vessel but of course it was not: the cause of the payment becoming due was the physical damage to the sheep and terminal and the reason for the payments being made was under the TOVALOP agreement. In other words, although the damage to the sheep and terminal was of course physical, it was not physical damage to the claimant, i.e. Esso. In other words, their loss was purely economic, because the money they had paid out in respect of damage to the sheep and terminal was not a direct consequence of physical damage to themselves. This decision, of course, accords perfectly with the Law of Tort. The fact that a plaintiff who has suffered economic loss has also sustained property damage in the same incident does not help his claim for economic loss unless that loss is consequent on, not simply additional to, the property damage.