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BUSN7052 Chap.4 Negligence: Causation, Defences and Economic Loss

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Chapter 4 of 13 · BUSN7052

Negligence: Causation, Defences and Economic Loss

Proving breach is not the end of a negligence claim. This chapter covers causation under s 45 of the Civil Law (Wrongs) Act 2002 (ACT), where factual causation asks whether the negligence was a necessary condition of the harm and scope of liability asks whether liability should extend to it, together with remoteness after The Wagon Mound and the eggshell skull rule.

It then explains the defences of contributory negligence, the intoxication presumptions and voluntary assumption of risk, and finishes with negligent misstatement, pure economic loss, vicarious liability, damages and limitation.

In this chapter

What this chapter covers

  • 01

    Factual causation and scope of liability under s 45

  • 02

    Material contribution and intervening acts

  • 03

    Remoteness, the eggshell skull and manner of harm

  • 04

    Contributory negligence and the s 95 and s 96 presumptions

  • 05

    Voluntary assumption of risk and statutory immunities

  • 06

    Negligent misstatement and vicarious liability

Worked example · free

A missing handrail and an unusual injury

Q [6 marks]. A gym fails to replace a broken handrail on its stairs. A member with an undiagnosed bone condition stumbles and suffers a far worse fracture than most people would. The gym says the extent of injury was unforeseeable. Advise on causation. The marks used here pace your own revision and are not an official University allocation.
Causation decision pathBreach leads to the but-for test under s 45(1)(a), then the scope of liability under s 45(1)(b), which asks whether the kind of harm was foreseeable; failing either step means no liability.Breach provedBut for? s 45(1)(a)No liabilitynoyesScope? s 45(1)(b)Too remotenoLiableKind of harms 45(2) keepseggshell rule
Read the path from the top: a proved breach must pass the but-for test and then the scope test, and the side box shows that scope turns on whether the kind of harm was foreseeable, with s 45(2) preserving the eggshell rule.
  • +2Factual causation under s 45(1)(a): but for the missing handrail, the member would probably have steadied herself, so the breach was a necessary condition of the fall.
  • +2Scope under s 45(1)(b): a fall injury is exactly the kind of harm a missing handrail risks, so the kind of damage was foreseeable.
  • +2Extent: the eggshell skull rule, preserved through s 45(2), makes the gym liable for the full injury despite her condition.
Causation is established and the gym is liable for the whole fracture.
Sia tip — Separate the kind of harm, which must be foreseeable, from its extent, which need not be; cite Smith v Leech Brain for the second.
Glossary

Key terms

Scope of liability
The second causation question, asking whether liability should extend to the harm caused.
Eggshell skull rule
The principle that a defendant takes the plaintiff as found and pays for unexpectedly severe harm.
Voluntary assumption of risk
A complete defence requiring proof that the plaintiff knew, appreciated and freely accepted the specific risk.
Vicarious liability
An employer's liability for an employee's tort committed in the course of employment.
Pure economic loss
Financial loss suffered without personal injury or damage to property.
FAQ

Negligence: Causation, Defences and Economic Loss FAQ

How does s 45 change the old but-for test?

It splits causation into two questions. Section 45(1)(a) asks whether the negligence was a necessary condition of the harm, which works much like but-for. Section 45(1)(b) asks whether it is appropriate for liability to extend to the harm, and s 45(2) lets courts keep applying established common law principles such as the eggshell rule.

Is obvious risk a defence in the ACT?

Only in limited cases. The slides explain that most States presume awareness of obvious risks, but the ACT legislation addresses obvious or inherent risk only for equine activities under Schedule 3. In other ACT cases the common law applies, so the defendant must prove the plaintiff knew of and freely accepted the risk.

When is a speaker liable for careless advice?

Under Evatt, a duty arises when the speaker knows they are trusted for special skill or access to information, knows the statement will be acted on, and reliance is reasonable. Shaddock extended this to information, while Esanda shows courts refuse liability to an indeterminate class, such as every financier reading audited accounts.

How long does a plaintiff have to sue for personal injury in the ACT?

The Week 3 slides cite s 16B of the Limitation Act 1985 (ACT), which gives three years for personal injury claims. Plaintiffs must also take reasonable steps to limit their loss, because damages are not recoverable for losses they could have avoided by mitigating.

Study strategy

Exam move

Practise causation as two short sentences before you write anything else about it: one for s 45(1)(a) and one for s 45(1)(b). If either is uncertain, then expand with material contribution, intervening acts or remoteness, but do not reach for those tools when the chain is obvious.

Make a small table of the remoteness cases with one line each: The Wagon Mound for the kind of harm, Smith v Leech Brain for extent, Hughes v Lord Advocate for manner. For defences, learn the effect of each rather than its history: contributory negligence reduces damages, voluntary assumption of risk defeats the claim entirely, and the good samaritan and volunteer sections remove personal liability.

Rehearse the s 95 presumption with its two rebuttal routes, because intoxication facts recur in scenarios. For economic loss, practise the Evatt three-part test on short advice scenarios, deliberately changing one fact each time, such as whether the advice was casual or the adviser knew it would be used.

Finally, link vicarious liability to the employment facts in any scenario: past guides asked whether an employee's carelessness made the business liable, and the answer always starts with whether the person was an employee acting in the course of employment.

Working through Negligence: Causation, Defences and Economic Loss in BUSN7052? Sia is AskSia’s AI Law tutor — ask any BUSN7052 Negligence: Causation, Defences and Economic Loss question and get a clear, step-by-step explanation grounded in how BUSN7052 is taught and assessed. Read this chapter free, then take your hardest questions to Sia.

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