The “black hole” cases

In a series of cases over the last 20 years or so, defendants have attempted to escape liability by contending that the person who has a cause of action is not the person who suffered the relevant loss. The "black hole" cases, in the construction contract context, arise where loss has been suffered, not by a contracting party, but by a third party, usually due to the fact that the contracting party does not own the property on which the construction was carried out. Damages are said to have fallen down a black hole, since the third party cannot claim damages due to the problem of privity of contract; nor can the employer claim, due to the fact that he is said to have suffered no loss, not being the owner of the land in question either at all or when the damage occurs.