The topic at hand is that of liability for psychiatric harm
that is negligently inflicted under tort law.1
It seeks to study if the various victims identified have a legitimate claim
against Demon Hall for having negligently causing them psychiatric harm.
Establishing this depends on whether a duty of care existed in law between Hall
and the victims. The legal test for duty of care is found in the case of Caparo
Industries Plc v Dickman.2
It was stated in this case that a duty of care exists where the claimant much
have been foreseeable with respect to the harm,3
there must have been a relationship of proximity between the victim and the
defendant,4
and it must be fair, just and reasonable to in the given circumstances to
impose a duty of care on the defendant.5

Psychiatric harm essentially refers to the idea of liability
being imposed on the defendant when the claim undergoes something in response
to a traumatic event. Indeed, where the claimant has suffered mental illness,
neurosis or a personality change arising out of the traumatic event, then
psychiatric harm can be found to exist. As Victorian Railways Commissioners v
Coultas6
shows, claims cannot be accommodated where the claimant has undergone emotional
distress, grief or anguish, unless this positively caused a psychiatric
illness. The reason for this is that it would be difficult to assign a monetary
value to such harm, the necessity to prevent fictitious claims leading to
excessive litigation and issues in proving negligence accurately.7

There are traditionally two main categories in which
psychiatric harm can occur. The differentiating point between the two
categories is the question of whether or not the injured plaintiff was involved
mediately or immediately as the participant in the event or whether the plaintiff
was simply an unwilling and passive bystander witnessing the injury caused to
others.8
The former refers to the victim being classified as a primary victim, while the
latter sees the victim being classified as a secondary victim. The distinction
is important as the secondary victims usually have to fulfil many more factors
before they can successfully prove that the defendant is liable for the
psychiatric harm.

1 J
Murphy, ‘Negligently inflicted psychiatric harm: A re-appraisal’, (1995) 15(3)
Legal Studies, 415

2
Caparo Industries Plc v Dickman 1990 1 All ER 568

3 Haley
v London Electricity Board 1965 AC 778; Bournhill v Young 1943 AC 92

4
Goodwill v British Pregnancy Advisory Service 1996 1 WLR 1397

5
Marc Rich & Co AG v Bishop Rock Marine Co Ltd 1996 AC 211; White v Jones
1995 2 AC 207

6 Victorian
Railways Commissioners v Coultas (1888) 13 App Cas 222

7 J
Murphy, Street on Torts (12th edn, Oxford University Press, 2007) 67

8
Alcock v Chief Constable of South Yorkshire 1992 1 AC 310 at 407, as per Lord
Oliver