Econmic loss Flashcards
What is Economic loss?
is financial rather than physical loss also meaning “damage to the wallet” of victim includes loss of profit, fall of value property
What are the two type of Economic loss?
Consequential economic loss
Pure Economic loss
What is a Pure Economic loss?
Damage that is simply economic cannot be claimed for unless it’s a result of Will,reference,Negligence misstatement
What happen in Spartan Steel v Martin?
C succeeded in their claim for the damage to the steel being produced at the time as this was straightforward property damage, and for the loss of profit that would have been made on the steel as this was consequential economic loss
What is A negligent misstatement?
is a statement which is inaccurate due to the negligence of the person making it
What happened in Hedley Byrne v Heller?
established there could be liability for pure economic loss if there was a “special relationship” between the claimant and defendant.
3 key elements that need to be satisfied for a successful claim for pure economic loss under Hedley Byrne v Heller. These are:
1)A special relationship between parties
2)Voluntary assumption of responsibility for the statement
3)Reliance by the claimant upon the advice
What is A special relationship between parties?
defendants will be a professional, for example an accountant writing a financial, or a solicitor providing legal advice
-Therefore, professionals who volunteer an opinion in a purely social setting will not be liable for pure economic losses suffered by claimants who rely upon their opinions.
Case for a special relationship between parties?
Chaudhry v Prabhakar
What is Voluntary assumption of responsibility for the statement?
When asked for his professional opinion, a person has three options: he may simply refuse; or he may give advice but add a warning that it should not be relied upon; or he may give advice without any warning.
Case for Voluntary assumption of responsibility for the statement?
-In Hedley Byrne v Heller, the claim failed because the negligent letter contained a warning about relying upon the advice.
What is Reliance by the claimant upon the advice?
-The claimant must have in fact relied upon the statement, and it must have been reasonable for him to do so in the circumstances.
Case for Reliance by the claimant upon the advice?
Smith v Eric Bush the defendant owed the claimants a duty of care because it was reasonably foreseeable that the claimant, as the purchased of the house, would rely upon it.
