D. Pride & Partners (a firm) & Ors v Institute for Animal Health & Ors

At summary judgment, pleaded primary facts are assumed true unless fanciful, but the claimant must show a real prospect of establishing each essential element. Physical damage may include organic produce passing the stage at which it could be marketed because of an external factor. Loss caused indirectly by movement restrictions is nevertheless too remote where the claimant’s property was neither infected nor directly affected. The exclusionary rule prevents recovery in negligence, nuisance and Rylands v Fletcher for pure economic loss and indirect physical loss in circumstances of this kind.

Livestock farmers claimed against the Institute for Animal Health, Merial and the Secretary of State for Environment, Food and Rural Affairs for losses allegedly caused by an escape of foot and mouth disease virus from Pirbright and consequent movement restrictions.

The defendants applied to strike out the claims or obtain summary judgment. After claims by the first seven claimants settled, the remaining claimants pursued negligence, private nuisance and Rylands v Fletcher claims for reduced sale prices, additional costs, lost profits and loss of livestock condition. The central issues were whether the losses constituted physical damage, whether indirect loss was recoverable, and whether the pleaded duty of care was sufficiently limited.

1. Applications granted. The remaining claimants had no real prospect of succeeding on any claim. The claims were dismissed under CPR Part 24.
2. For summary judgment, pleaded primary facts were accepted unless plainly fanciful. The court asked whether, on those assumptions, the claimants had a real prospect of success and whether another compelling reason required a trial.
3. Physical damage is distinct from pure economic loss. Where an external factor causes organic produce to pass the stage of natural development at which it could be marketed, a court may find physical damage. The claims concerning oversized pigs therefore had a real prospect of satisfying that requirement, together with profit truly consequential on the damage.
4. The claims nevertheless failed because the farms and livestock were not infected or directly affected by the virus. The losses resulted from government movement restrictions and were indirect and too remote. But-for causation was insufficient.
5. The proposed duty was not confined to a legally manageable class. Nationwide measures affected farmers, hauliers, auctioneers, slaughterhouse owners and others. Foreseeability and vulnerability did not establish proximity or justify a novel duty. The pleaded assumption of responsibility was unsupported by the necessary dealings or reliance.
6. The exclusionary rule also defeated the nuisance and Rylands v Fletcher claims. The measures were not a direct emanation from the defendants’ land, and there was no real prospect of direct physical injury to the claimants’ land. The question of DEFRA’s possible joint-tortfeasor liability was left undecided.

First-instance decision. The High Court determined the defendants’ applications to strike out or obtain summary judgment.