Economic Loss

Question 1

When can you claim for economic loss?

Answer 1

1) If the loss is the direct result of injury to the person or damage to property, this is called. CONSEQUENTIAL ECONOMIC LOSS.

2) If the loss is caused by negligent misstatement, PURE ECONOMIC LOSS

Question 2

Consequential economic loss

Answer 2

SPARTAN STEEL V MARTIN

Facts: D negligently cut an electricity cable to C’s factory, shutting it down.

C claimed for :
1)damages to goods in production (physical)
2)loss of profit on those damaged goods (CEL)
3)loss of profit on products that could not be manufactured, (PEL)

HELD: you cannot recover for the goods that would have been manufactured later that day has the power not been cut as this was pure economic loss and not as a consequence of damage to the property. However you could recover for the rest, including CEL.
Claim for 1&2, not 3.

Question 3

Negligent misstatement

Answer 3

A claimant may sue in Meg for PEL caused by relying on a negligently made statement.
HEDLEY BRYNE V HELLER 1964.
Held - liability for economic loss arising from a negligent misstatement could arise in such circumstances if the:
i) The statement was made negligently
ii) There is a ‘special relationship’ between the parties

Question 4

In CAPARO V DICKMAN 1990, the HL set out in more detail what is needed to prove a special relationship

(5 points) (2 cases)

Answer 4

1) The person giving the advice must possess special skill relating to the advice given so that the D ought to have realised that the C would rely on that skill.

MUTANT LIFE V EVATT:
2) The party receiving that advice has acted in reliance on it and it was reasonable for C to rely on the advice

JEB FASTENERS LTD MARKS
3) The advice must be communicated directly to the claimant & not through a third party means - radio, tv, newspaper etc.

4) The person giving the advice understood that their advice would be relied upon by C and that the C would not be seeking further advice.

5) A defendant will not be liable for statements made informally or in a social situation

Question 5

5) A defendant will not be liable for statements made informally or in a social situation….
However in..

Answer 5

CHAUDHRY V PRABHAKER

HELD - Advicentigen by a friend might give rise to a duty of care provided they posses RELEVANT EXPERTISE
However, the general rule will remain that there will be no liability for statements made informally or in a social situation.

Question 6

Remedy - Damages

Answer 6

Can claim for GENERAL & SPECIAL DAMAGES