The plaintiff, Mariola Marine Corp. (“Mariola”), purchased the Morning Watch, a steel-hulled motor yacht built in 1962 according to Lloyd’s Rules, on 18 March 1985. Subsequently, Mariola found the vessel to have extensive and serious corrosion of her steel work in the main and boat deck, resulting in costly remedial work. Mariola’s principal argument was that it had been induced to buy the Morning Watch by the negligent misrepresentation of a Lloyds’s surveyor contained in his interim class certificate, and claimed damages for losses sustained as a consequence. The claim failed, and Phillips, J., took the opportunity to re-state the principles and policy which the English courts are currently following when deciding questions of liability for economic loss resulting from the negligent misstatements of third parties.

It is important to note that the interim certificate was not shown to anyone acting for Mariola prior to completion of the sale. It was, however, sent to the owner’s agent. Following receipt, the agent issued sale particulars of the yacht which included the statement: “Always maintained to 100 A1 Lloyd’s, from whom her history is available. Has passed current special survey (November, 1984) with no difficulty, so purchaser is spared expense of a survey.”