Anns v Merton London Borough Council [1978] AC 728 (HL)

Facts

• The claimants were lessees of a block of flats who experienced structural damage, including wall cracking, due to inadequate building support structures.
• The local authority, Merton London Borough Council, had powers to approve building plans and inspect construction to ensure compliance with building regulations.
• The claimants alleged the council negligently approved plans with insufficient depth of support structures and failed to properly inspect the construction.
• The damage required substantial repair, leading the claimants to seek recovery of these costs from the council, asserting a breach of duty in the inspection process.
• The economic impact on property owners stemmed directly from the council’s alleged negligence during construction oversight.

Issues

1. Whether a local authority owes a duty of care in negligence when exercising its statutory powers to inspect building works.
2. What test governs the existence and scope of a common law duty of care, particularly regarding local authorities?
3. Whether cracks and structural defects in property caused by inadequate support structures should be classified as physical damage or pure economic loss.
4. How distinctions between policy and operational functions affect the liability of public authorities in negligence.

Decision

• The House of Lords held that the council owed a duty of care to ensure compliance with building regulations during inspection of support structures.
• Lord Wilberforce set out a two-stage test: (1) whether a sufficient relationship of proximity exists such that damage is reasonably foreseeable, and (2) whether any considerations exist to limit or negate the duty.
• The court introduced a distinction between policy decisions (not generally actionable) and operational acts (amenable to a duty of care).
• Determined that the damage to the property constituted physical damage, allowing recovery of costs for repairs.
• The decision set a broad basis for liability in defective property cases, expanding the potential for claimants to recover losses due to negligent inspections.

Legal Principles

• Established a two-stage test for duty of care in negligence: proximity and considerations of limiting factors.
• Distinction between policy (discretionary, non-actionable) and operational (practical, actionable) functions of public authorities.
• Recognized physical damage to property (as opposed to pure economic loss) as recoverable in negligence claims.
• Duty of care arises unless policy considerations justify a limitation or negation.
• The decision expanded the scope of public authority liability in negligence, departing from previous incremental approaches.

Conclusion

Anns v Merton marked a significant shift in negligence law by creating a broad two-stage test for duty of care and extending liability for local authorities in their operational roles, particularly regarding building inspections and physical damage. However, its wide reach was later curtailed by Murphy v Brentwood District Council, which restricted recovery for pure economic loss and reevaluated the boundaries of public authority liability in tort. The case remains significant in illustrating the evolution and eventual refinement of the duty of care concept in English law.