Anns v Merton London Borough Council [1977] UKHL 4; [1978] AC 728

Citation

• Full case name: Anns and others v Merton London Borough Council
• Neutral citation: [1977] UKHL 4
• Reported at: [1978] AC 728; [1977] 2 All ER 492; [1977] 2 WLR 1024
• Court: House of Lords
• Judgment: 1977
• Leading speech: Lord Wilberforce
• Subject: duty of care; local authority building control; defective premises

Facts

In 1962 the local authority approved building plans for a block of maisonettes. The plans required foundations three feet or deeper. The council had power to inspect the work but was under no obligation to do so.

In 1970 structural damage appeared: cracking in the walls and sloping of the floors. The lessees discovered that the foundations had been built to a depth of only two feet six inches. They sued the council in negligence for approving inadequate foundations and for failing to inspect.

The trial court dismissed the claim as statute-barred. The Court of Appeal allowed the appeal, holding that the cause of action arose when the damage was discovered, and the council appealed.

Decision and the two-stage test

Lord Wilberforce set out a general approach to whether a duty of care exists which became known as the two-stage test. First, is there a sufficient relationship of proximity between the parties such that carelessness on the defendant’s part may be likely to cause damage — in which case a prima facie duty of care arises. Second, are there any considerations which ought to negative, or to reduce or limit, the scope of that duty?

Applied to the facts, the House held that a local authority could owe a duty of care in relation to its building control functions, and that the cause of action arose when the state of the building presented a present or imminent danger to the health or safety of occupiers.

Later history

The two-stage test proved too expansive. It was cut back in a series of decisions and was finally departed from by the House of Lords in Murphy v Brentwood District Council [1991] UKHL 2; [1991] 1 AC 398, which held that the cost of repairing a defective building is pure economic loss and is not recoverable in negligence.

The modern approach in England and Wales is the incremental, three-part analysis associated with Caparo Industries plc v Dickman: foreseeability, proximity, and whether it is fair, just and reasonable to impose a duty, developed by analogy with established categories rather than from a general principle. Anns remains important as the high-water mark it corrected, and as the starting point for understanding why the construction market relies on contracts and warranties rather than tort.

Why it matters for insurance

Anns and its reversal explain the shape of construction and property liability insurance in the UK. Because the tort route to a builder or a building control body was closed off, the market fell back on contractual remedies, collateral warranties, third party rights and specific latent defects products. Those are the things that actually respond when a defect emerges years later.

It also matters to public and products liability policies generally. Those wordings respond to legal liability for injury and for damage to third party property. The scope of that liability is set by the general law of negligence, so where the courts narrow the duty of care, the policy narrows with it — without a word of the wording changing.

For a business buying liability cover the practical point is that a policy is only ever as wide as the liabilities the law recognises. Contractual liability, in particular, is treated differently by most wordings, which is why the indemnities a business signs up to should be checked against its cover before signature rather than after a claim.

See also

• Murphy v Brentwood District Council — the decision that departed from Anns
• D&F Estates v Church Commissioners — pure economic loss and defective building work
• Caparo Industries plc v Dickman — the test that replaced the two-stage approach
• Pirelli General v Oscar Faber — when the cause of action accrues in building damage claims

References

• Anns v Merton London Borough Council [1977] UKHL 4; [1978] AC 728
• Murphy v Brentwood District Council [1991] UKHL 2; [1991] 1 AC 398
• Caparo Industries plc v Dickman [1990] 2 AC 605

Frequently asked questions

Is Anns v Merton still good law?

Not as a general test for the duty of care in England and Wales. The House of Lords departed from it in Murphy v Brentwood District Council in 1990. It is still studied because it explains why the law took the shape it did, and versions of the approach survive in some other common law jurisdictions.

What was the two-stage test?

First, whether there is a sufficient relationship of proximity such that carelessness may be likely to cause damage, giving rise to a prima facie duty. Second, whether there are considerations which ought to negative, reduce or limit the scope of that duty.

What replaced it?

The incremental approach associated with Caparo Industries plc v Dickman, which asks about foreseeability, proximity and whether it is fair, just and reasonable to impose a duty, and develops the law by analogy with established categories rather than from a single general principle.

This page is insurance information for UK businesses, not legal advice. It summarises a reported judgment and explains why insurance buyers and brokers refer to it; it is not a substitute for reading the judgment or taking advice on your own facts. Case summaries are necessarily short and omit detail. Position stated as at August 2026.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.