Held:
Damage from the squatters擅自占用房屋或土地的人was too remote, hence not recoverable 不能討回.

Critics over Lord Reid’s test in Home Office v Dorset Yacht Co Ltd [1970] AC 1004, that :

1) the ‘very likely’ test will stretch the liability of defendants too far, and it should be a household’s duty to insure their property (i.e. the claimant has duty to protect herself from squatters’ damage via insurance)

2) damage could be unlikely even though reasonably foreseeable

3) a tortfeasor was liable for all damages reasonably foreseeable however unlikely

Comparison with Home Office v Dorset Yacht Co Ltd [1970] AC 1004

– Relationship between defendant and 3^rd party:

a) Home Office case :

Defendant : Home Office
3^rd parties : borstal boys
⇒→Relationship: Home Office had been in control of the borstal boys

b) This case:

Defendant : Camden London Borough Council

3^rd parties : squatters

⇒→Relationship: Council had no control whatsoever over the squatters

Conclusion:

1) Factors to determine if damage is too remote:

a) consider whether the 3^rd party intervention is a foreseeable consequence of the original negligence （在此案，地區局因疏忽造成爆水管不足以成為導致不束客侵佔索償人房子之原因）

b) Mere ‘reasonably foreseeable’ is not enough, need to consider likelihood of damage. （在此案，不束客侵佔索償人房子有可能導致房子損毀，但可能性不大）

2) need to consider relationship between Defendant and 3^rd party causing the damages

Lamb v Camden LBC [1981] EWCA Civ 7, [1981] QB 625 is a leading case in English tort law. It is a Court of Appeal decision on negligence and the test of reasonable foreseeability of damage, especially where the damage has been caused by third parties not the defendant him or herself.

Facts
The plaintiff Mrs Lamb, who owned a house off Hamstead Heath in London, had let this property to a tenant and then travelled to America. Whilst away, the defendant Camden London Borough Council carried out building works nearby which included the digging of a trench溝. This caused a water main to burst, which in turn caused subsidence 沉陷. The house became uninhabitable and the tenant moved out. Mrs Lamb returned from America for six weeks to prepare the house for repair work and one of the things she did was to put all of the furniture into storage. She then returned to America. However, the house was now invaded by squatters who caused some £30,000 worth of damage. Having finally evicted驅逐the squatters擅自占用房屋或土地的人and carried out the repair work, Mrs Lamb sued the Council, who admitted liability for nuisance討厭的. There was thus no issue with the Council paying for the subsidence damage on its own (£50,000). The point of law which arose was whether Mrs Lamb could recover from the Council the £30,000 due to the squatters’ damage.

Official Referee
Following Lord Reid’s test in Dorset Yacht Co. Ltd. v. Home Office [1970] A.C. 1004, the official referee, Judge Edgar Fay, found that the squatters’ damage was too remote and was not recoverable. Although it may have been “reasonably foreseeable”, it was not, in Judge Fay’s view, “likely“.

Court of Appeal

Giving the lead judgment in the Court of Appeal, Lord Denning held that Lord Reid had been wrong on the grounds, firstly, that the “very likely” test would stretch the liability of defendants too far and that it was a householder’s duty to insure their property, secondly, that this test ran counter to the case of Stansbie v. Troman [1948] 2 K.B. 48, where damage was unlikely but reasonably foreseeable (and therefore recoverable), and thirdly, that this test ran counter to the Wagon Mound cases [1961] A.C. 388; [1967] 1 A.C. 617 by which a tortfeasor was liable for all damage that was reasonably foreseeable however unlikely.

Lord Denning went on to hold that, while duty of care, causation and foreseeability were all useful devices for limiting liability, ultimately it was a question of policy for the judges to decide. He cited cases on economic loss and nervous shock as illustrations of this policy-based approach.

He concluded his judgment by repeating his view that it was Mrs Lamb whose duty it was to protect herself from the squatters’ damage via insurance.

Oliver LJ and Watkins LJ delivered concurring judgments.

Comment
Markesinis and Deakin note that a key difference between this case (where the plaintiff did not recover) and Dorset Yacht Co. Ltd. v. Home Office [1970] A.C. 1004 (where the plaintiff did recover) was the relationship between the defendant and the third party which “may be as important as the nature of the intervening act”. While the Home Office had been in control of the borstal少年犯教養院boys in the Dorset case, Camden Borough Council had had no control whatsoever over the squatters.

Ratio decidendi
A defendant is only liable for the act of a third party where the third party intervention is a foreseeable consequence of the original negligence, but policy considerations and the relationship between the defendant and the third party may be taken into account.