Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] 2 All ER 145 (HL)

Facts

  • The case involved a shipment of steel coils from South Korea to the United Kingdom.
  • The buyers, Leigh and Sillavan Ltd, contracted with the sellers, Aliakmon Shipping Co Ltd, for the goods.
  • Under the contract, the buyers assumed the risk of damage during transit but did not acquire legal title to the goods until after the damage occurred.
  • The steel coils sustained damage due to improper stowage during transit.
  • The buyers sought to recover economic loss in tort, claiming the carriers owed them a duty of care, despite not having legal ownership at the time.

Issues

  1. Whether a party without legal ownership or possessory rights at the time of damage can recover in tort for economic loss arising from negligence.
  2. Whether contractual assumption of risk or an equitable interest is sufficient to establish a proprietary interest to support a tort claim.
  3. Whether tort law allows recovery for economic loss absent a direct and vested proprietary interest in the damaged property.

Decision

  • The House of Lords unanimously held that a proprietary interest at the time of damage is a prerequisite for recovery in tort.
  • The Court found that contractual rights or expectations, even if they include assumption of risk, do not equate to a proprietary interest.
  • Equitable interests were also deemed insufficient to establish the standing required for a tortious claim.
  • The buyers' claim was rejected due to lack of legal ownership or possessory rights at the time of damage.

Legal Principles

  • In tort law, a claimant must have a proprietary interest (legal or possessory) in property at the time of damage to recover for economic loss.
  • Contractual rights or mere expectations do not establish standing for recovery in tort; a direct and vested legal or equitable ownership is required.
  • The distinction between contractual remedies (based on agreement) and tortious claims (requiring an independent duty and proprietary interest) is affirmed.
  • The requirement of proprietary interest provides clarity in commercial transactions and limits liability to those directly affected.

Conclusion

The Aliakmon decision established that recovery in tort for damage to goods requires proprietary interest at the time of loss, preventing claims based solely on contractual risk or equitable interest and delineating the boundary between contract and tort remedies in commercial contexts.

The answers, solutions, explanations, and written content provided on this page represent PastPaperHero's interpretation of academic material and potential responses to given questions. These are not guaranteed to be the only correct or definitive answers or explanations. Alternative valid responses, interpretations, or approaches may exist. If you believe any content is incorrect, outdated, or could be improved, please get in touch with us and we will review and make necessary amendments if we deem it appropriate. As per our terms and conditions, PastPaperHero shall not be held liable or responsible for any consequences arising. This includes, but is not limited to, incorrect answers in assignments, exams, or any form of testing administered by educational institutions or examination boards, as well as any misunderstandings or misapplications of concepts explained in our written content. Users are responsible for verifying that the methods, procedures, and explanations presented align with those taught in their respective educational settings and with current academic standards. While we strive to provide high-quality, accurate, and up-to-date content, PastPaperHero does not guarantee the completeness or accuracy of our written explanations, nor any specific outcomes in academic understanding or testing, whether formal or informal.
No resources available.

Job & Test Prep on a Budget

Compare PastPaperHero's subscription offering to the wider market

PastPaperHero
Monthly Plan
$10
Assessment Day
One-time Fee
$20-39
Job Test Prep
One-time Fee
$90-350

Note the above prices are approximate and based on prices listed on the respective websites as of May 2025. Prices may vary based on location, currency exchange rates, and other factors.

Get unlimited access to thousands of practice questions, flashcards, and detailed explanations. Save over 90% compared to one-time courses while maintaining the flexibility to learn at your own pace.

All-in-one Learning Platform

Everything you need to master your assessments and job tests in one place

  • Comprehensive Content

    Access thousands of fully explained questions and cases across multiple subjects

  • Visual Learning

    Understand complex concepts with intuitive diagrams and flowcharts

  • Focused Practice

    Prepare for assessments with targeted practice materials and expert guidance

  • Personalized Learning

    Track your progress and focus on areas where you need improvement

  • Affordable Access

    Get quality educational resources at a fraction of traditional costs

Tell Us What You Think

Help us improve our resources by sharing your experience

Pleased to share that I have successfully passed the SQE1 exam on 1st attempt. With SQE2 exempted, I’m now one step closer to getting enrolled as a Solicitor of England and Wales! Would like to thank my seniors, colleagues, mentors and friends for all the support during this grueling journey. This is one of the most difficult bar exams in the world to undertake, especially alongside a full time job! So happy to help out any aspirant who may be reading this message! I had prepared from the University of Law SQE Manuals and the AI powered MCQ bank from PastPaperHero.

Saptarshi Chatterjee

Saptarshi Chatterjee

Senior Associate at Trilegal