Ch 4: Negligence: Economic Loss Flashcards
What is the primary issue with economic loss and psychological loss suits?
They are potentially limitless - loss may be caused without the defendant even being aware it has occurred, so liability would be boundless
What is the general rule of economic loss claims?
No Duty of Care is owed for Pure Economic Loss
What is the main exception to the general rule of economic loss liability?
Special Relationships - a situation where a defendant may be said to have assumed a responsibility towards the claimant
What are the two elements of a Special Relationship under the Hedley Bryne case?
1) An assumption of responsibility by the defendant
2) reasonable reliance by the claimant
What are the 4 rules set out by Caparo for establishing a Special Relationship?
- the defendant knew the purpose for which advice was required
- the defendant knew the advice would be communicated to the claimant
- the defendant knew the claimant was likely to act on that advice
- the advice was acted on by the claimant to its detriment
What are the two events required to rely on an Exclusion Notice to avoid liability for statements?
- Reasonable steps must have been taken to bring the exclusion notice to the claimants attention
- the wording of the notice must cover the loss suffered by the claimant
Can liability be excluded for death or personal injury?
Not for a business or trader - see the CRA 2015 and UCTA 1977
What is the UCTA 1977
Unfair Contracts Terms Act of 1977
Applies to negligence claims for a BUSINESS - limits liability exclusion
What is the CRA 2015?
Consumer Rights Act 2015
Applies to Negligence claims for a TRADER
Limits exclusion of liability
Where the CRA and UCTA apply what can a defendant do or not do?
- Cannot exclude liability for death or personal injury
- Can exclude liability for negligent acts causing other damage (e.g economic loss)
As a general rule, is a Duty of Care owed against pure psychiatric harm?
No
What is PURE psychiatric harm?
Harm caused without any physical impact or injury to the claimant
What are the two conditions for a pure psychiatric harm to be considered for a duty of care?
- must be a medically recognized illness
OR
- must be a shock induced physical condition (e.g heart attack
What is a Primary Victim?
Someone who:
- Was in the actual area of danger
- reasonably believed they were on danger
What is a Secondary Victim?
Someone who:
- Witnesses injury to someone else
- fears for the safety of another person
What are the requirements for a Duty of Care to be owed to a Primary Victim?
- Risk of physical injury must be foreseeable
- it is not necessary for the risk of PSYCHIATRIC harm to be foreseeable
What are the Alcock tests for Duty of Care for a Secondary Victim?
- Foreseeability of psychiatric harm
- Proximity of relationship
- Proximity in time and space
- Proximity of Perception
