Lamb owned a house in London. She moved to America and rented the house to a tenant. Borough workers, working on the street, struck a water main that caused serious damage to the foundation of the house and the tenant moved out. All of the furniture was removed from the house. Eventually squatters took over the house, however agents of Lamb ejected them and some meager security is installed. Squatters take it over again, and ruin the house. Lamb sued the Borough for the damages caused by the squatters. The Borough was successful at trial which Lamb appealed.
- Is this damage a foreseeable consequence of the Borough's negligence?
- Does the test set out in Home Office help reach the logical conclusion?
Denning, for a unanimous court, rejects the test from Home Office as being too expansive and allowing damages to be assessed when they should not. He states that in all of these types of cases what really lies behind the judicial decisions is public policy. No one, throughout the course of the squatters taking over the house, suggested that it was the Borough's fault or contacted them to put a stop to it. He says that in cases like this insurance should be the provider of funds, not the courts. Although this is a foreseeable outcome of the water main breakage using Lord Reid's test, damages should not be assessed for public policy reasons.
Oliver essentially agrees with Denning. He states that Reid's test does not limit damage assessment enough, and that it should include a more "stringent standard" but does not suggest an alternative.
Watkins states that in cases like these judges must simply use their instincts to decide whether or not the outcome is too remote to deserve damages. He says that there will usually be a clear common sense answer – here it is to dismiss the appeal.
Reasonable foreseeability of damages is not enough in itself to justify awarding damages; courts must consider the public policy implications, or discover a more stringent standard to ensure that damage awards are logical.