Many businesses directly affected cannot claim compensation

Farmers and other businesses embroiled in the recent outbreak of foot and mouth will have to rely on the 40-year-old case of Weller & Co vs Foot and Mouth Disease Research Institute 1965.

Law firm Vizards Wyeth, which specialises in insurance and litigation, pointed out that in late 1959/early 1960 the virus, imported from Africa to a laboratory at the Pirbright site, allegedly escaped and infected cattle, resulting in the cancellation of markets in nearby Farnham and Guildford.

The incident resulted in a legal test case being brought which will be relevant to businesses affected by the latest foot and mouth outbreak.

Alan Bannister, partner at solicitors Vizards Wyeth, said: “If the present outbreak of foot and mouth disease in Surrey is due to the escape of a virus being used at the experimental facility in Pirbright then this is a considerable case of déjà vu.

“The Weller case provided a distinction between those who could successfully sue for economic loss and those who couldn’t. The case is still relevant and there is no reason why the outcome will be any different today.

“Following the Weller case, farmers whose animals are culled as a result of foot and mouth will be able to take action against the person or company responsible. The claimants will be able to seek recovery of all their financial losses which were a direct result of the loss of their animals, including the value of the animals and incidental costs such as veterinary fees and increased staff costs.

“However, farmers whose animals are not culled, but who suffer a loss because they cannot sell on animals as they cannot be transported, and have suffered incidental damage such as increased cost of feed, will be not be able to pursue a claim. The courts will find that the business has not suffered direct physical damage but only economic loss which is not recoverable at law.

“Many businesses, not just farms but also others affected by the restriction on movement of livestock, will wish to know whether they can recoup their losses from the latest scare, and whether they should use the courts to sue the source of the outbreak.

"The answer is sadly no, they cannot pursue their losses because their loss too is purely economic and is even more remote from the physical damage of beasts actually culled. "