chapter  11
COLLATERAL WARRANTIES
Pages 8

Over the years the courts started to show a readiness to award damages for the negligence of designers and/or contractors, even if the claimant did not have a direct contract with the contractor, i.e. was not in privity of contract, thus expa nding the area of negligence claims beyond the original employer. However, in the late 1980s the courts took a more stringent position, fi nding that it was not possible to recover damages for negligence in relation to defects in buildings as such damages were economic losses, which are not recoverable in tort. The two key decisions in this regard were the House of Lords’ decisions in D&F Estates v Church Commissioners581 and Murphy v Brentwood District Council.582 After these two cases it was clear that owners and those occupying buildings, such as tenants, needed a contractual method to claim damages against either the designers and/or contractors. These sorts of claims had to be based in a breach of contract and, as they had no privity of contract with either the designer or contractor, such claims would fail. This problem extended to not just subsequent owners and occupiers but also to those providing the funds, other purchasers, and those who had any other interest in the building or project. The development of collateral warranties created the contractual relationship needed.