Great North Eastern Railway Ltd. v Railcare Ltd.

Damages for tortious loss must be proved on the balance of probabilities, but mathematical precision is unnecessary where the nature of the loss makes precision impossible. The court should adopt the most reliable practical methodology, using cross-checks where appropriate, and make deductions only for extraneous factors supported by evidence.

In assessing consequential expenses, the claimant may recover costs caused by the defendant’s negligence, but separable costs arising from the opportunity to remedy unrelated defects are not recoverable. A contributory-negligence case based principally on hindsight will fail where the alleged precautions were not reasonably required by the information then available.

Great North Eastern Railway Ltd. v Railcare Ltd. concerned a claim in tort arising from the derailment of a passenger train after a negligently overhauled wheelset failed. Liability for the derailment was admitted. The trial concerned the amount of lost passenger and catering revenue, consequential expenses, and an allegation that the claimant had contributed to the loss by failing to detect the fatigue crack before the derailment.

The principal questions were how lost revenue should be calculated; which remedial and operational expenses were caused by the defendant’s negligence; and whether the claimant’s visual inspection regime or its implementation amounted to negligence or contributory negligence.

1. Lost revenue. The court held that the appropriate method was to subtract actual revenue in the affected periods from the best estimate of revenue that would have been earned absent the derailment, with appropriate deductions for unrelated factors. The more complex theoretical methodology advanced by the defendant was rejected, although it could provide a cross-check.
2. The claimant’s forecast was insufficiently supported to be a reliable estimate. An adjusted budget-based calculation, using unaffected periods and allowing for actual performance above budget, was preferred. The court allowed an uplift for the two weeks preceding the derailment, deducted £40,000 for extraneous factors, and assessed net passenger revenue loss at £1.975 million before an agreed further deduction. Lost catering revenue was assessed at £29,600.
3. Expenses. Costs attributable to the defendant’s negligent failure to deburr and chamfer were recoverable. Other costs were irrecoverable where separable and caused only by the opportunity to remedy unrelated defects. The claimant recovered £155,000 in additional Interfleet costs. Payments made under the railway performance and track-access arrangements were legally recoverable, proved, and not too remote. The court allowed the Key Services payment of £42,000 and the Track Access payment of £102,000, together with specified miscellaneous expenses.
4. Contributory negligence. The claimant was not negligent in failing to detect the unprecedented crack. The visual inspection system itself was not criticised, and the evidence did not establish negligent implementation during the relevant examinations. The defendant’s case depended on hindsight and failed to show that the crack should reasonably have been detected.
5. The proposed hypothetical response involving less extensive immediate remedial work was rejected. The claimant would probably have acted substantially as it did, and that response would not have been unreasonable. The arguments on avoided loss and apportionment were therefore academic. The court gave only a provisional view that any apportionment would have concerned the avoidable additional loss, having regard to causative potency and blameworthiness.

This was a first-instance trial in the High Court (Commercial Court). Liability had been admitted before trial, and the judgment determined quantum and the allegation of contributory negligence.