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Published online by Cambridge University Press: 01 March 1999
Does the loss of computer data constitute damage to property for the purposes of an action in negligence, or is it pure economic loss? On the test in Hunter v. Canary Wharf Ltd. [1997] A.C. 655, if the loss of data is concomitant with a change in the configuration in the particles of the computer hardware by means of which the data are stored, the Courts are likely to find that damage to property has taken place. This is likely to have significant implications in the context of problems caused by the “millennium bug”. However, whatever may be the correct analysis of the nature of the loss, de minimis principles and considerations of fairness, justice and reasonableness may militate against the imposition of liability in tort, at least where the loss of data is negligently, rather than deliberately, caused.
I am grateful to my colleagues in Chambers, Antony Edwards-Stuart Q.C. and Andrew Davis, for their comments on this article.
1 [1991] 1 A.C. 398 at p. 486.
2 (1997) 13 Const.L.J. 267.
3 The term “data” is used here to embrace all forms of information stored on computer, including programs, and “loss” is intended to include corruption of such data.
4 (1995) 11 B.C.L.R. (3d) 385; [1995] 10 W.W.R. 756.
5 Ibid., at para. 11.
6 (1986) 83 Cr.App.R. 54; Divisional Court.
7 (1865) L.R. 1 C.C.R. 7.
8 An unreported case decided by the Court of Appeal on 29 November 1984.
9 Ibid., at p. 58.
10 “… to injure [a thing] so as to lessen or destroy its value.” The Oxford English Dictionary, 2nd ed. (1989).
11 Law Com. No. 186, dated 25.9.89, para. 2.30.
12 1990 c. 18.
13 The term “contents” was intended to include both data and programs: Law Com. No. 186 at para. 3.68.
14 (1991) 93 Cr.App.R. 25.
15 Ibid., at pp. 28–29; emphasis supplied.
16 [1997] A.C. 655, where the Court of Appeal's decision is reported; the issue did not arise for decision in the House of Lords.
17 Counsel for the defendants.
18 [1997] A.C. 655 at p. 676; emphasis supplied.
19 Nor, apparently, was the Court of Appeal in Hunter referred to The Orjula [1995] 2 Lloyd's Rep. 395, where, in considering whether the contamination of a vessel with hydrochloric acid amounted to physical damage to the vessel for the purposes of an action in negligence, Mance J. expressly derived assistance from a number of criminal cases, including both Cox v. Riley and Whiteley. The Orjula was referred to with approval by the Court of Appeal in the Blue Circle case, below.
20 [1999] 2 W.L.R. 295.
21 Ibid., at p. 303; emphasis supplied.
22 AUSTLII database, [1998] VICSC 25 (4 March 1998).
23 The definition is adopted from Ranicar v. Frigmobile Pty. Ltd. [1983] Tas.R. 113 at p. 166, per Green C.J.
24 See Aswan Engineering Establishment Co. v. Lupdine Ltd [1987] 1 All E.R. 135 at pp. 158–159 per Nicholls L.J.; Murphy v. Brentwood District Council [1991] 1 A.C. 398 at p. 478 per Lord Bridge, at p. 484 per Lord Oliver; The Orjula [1995] 2 Lloyd's Rep. 395, 400–401; Invercargill City Council v. Hamlin [1996] A.C. 624. Cf. section 5(2) of the Consumer Protection Act 1987.
25 (1995) 53 F. 3d 195.
26 The claim in contract was dismissed at first instance.
27 Ibid., at p. 198.
28 Law Com. No. 186 at para. 2.29.
29 [1991] 1 A.C. 398 at p. 486.
30 Ibid.
31 [1990] 2 Q.B. 557.
32 [1997] Env.L.R. 341.
33 Ibid., at p. 349.
34 British Celanese Ltd. v. A. H. Hunt (Capacitors) Ltd. [1969] 2 All E.R. 1252; S.C.M. (UK) Ltd. v. W. J. Whittal & Son Ltd. [1971] 1 Q.B. 337; Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd. [1973] Q.B. 27; Muirhead v. Industrial Tank Specialities Ltd. [1986] Q.B. 507; Londonwaste Ltd. v. Amec Civil Engineering Ltd. (1997) 53 Con.L.R. 66.
35 [1996] 1 A.C. 211.
36 Ibid., at p. 236, approving [1994] 1 W.L.R. 1071 at p. 1077; emphasis supplied.
37 [1998] 2 Lloyd's Rep. 255.
38 Ultramares Corp. v. Touche (1931) 255 N.Y. 170 at p. 179 per Cardozo C.J.
39 Many policies, however, now have exclusions in relation to millenium problems.
40 [1970] 1 W.L.R. 1017.
41 Ibid., at p. 1036.
42 [1973] 1 Q.B. 27.
43 Ibid., at p. 38.
44 Barretts & Baird (Wholesale) Ltd. v. I.P.C.S. [1987] I.R.L.R. 3 at pp. 6 and 10, per Henry J.
45 Associated British Ports v. Transport and General Workers’ Union [1989] 1 W.L.R. 939 at pp. 960–961 per Butler Sloss L.J., at pp. 965–966 per Stuart-Smith L.J.