Economic loss Flashcards
When is financial loss ordinarily recoverable?
When it has resulted from negligent infliction of injury to the person or property e.g. loss of earnings
What is pure economic loss?
When the only result is loss of money (no injury or damage) e.g negligent advice
Why is pure economic loss only recoverable in certain circumstances? + case
Restrictive approach based on policy –> economic loss likely to be a loss of profit which is more an issue for contract than tort (Spartan Steel)
What is the PoL for Hedley Byrne?
In appropriate circumstances, a duty could arise in relation to negligent provision of info. or advice
HoL laid down guidelines of when principle would apply –> added to Caparo v Dickman
What must there be in order to claim?
A special relationship between the 2 parties based on skill + judgement of the D and the reliance placed upon it
What 5 elements determines a special relationship?
- Special skill or expertise
- Voluntarily assumed responsibility for giving advice
- Knew would rely on advice
- Reasonable reliance on the advice
- Relied on advice to detriment (loose money)
What does a special skill or expertise include? (2 examples)
-Relationship where the party giving advice was in the business of giving advice of the sort in question
-Business or professional relationship might in general give rise to the duty if C is genuinely seeking professional advice
What case is an example of a negligent misstatement?
Howard Marine & Dredging Co Ltd
Do purely social relationships normally give rise to a duty of care? Use a case
No, but has done when it has been established that carefully considered advice was being sought from a party with some expertise (Chaudhry v Prabhaker)
What is the PoL for Yanni v Edwin Evans & Sons
Common relationships are where valuers or accountants provide advice e.g. building society surveyor
What case states that the mere fact C pays for advice is not enough?
West Bromwich Albion Footbaall Club Ltd v El-Safty
In what case did an insurance company not owe a duty of care in giving investment advice?
Mutual Life & Citizens Assurance v Evatt
What is the PoL for Henderson v Merrett Syndicates Ltd?
Where a person assumed responsibility to perform professional or quasi-professional services for another who relied on those services, the relationship between the parties was sufficient to give rise to a duty
What did Caparo say in reference to 3. knew would rely on advice
‘Necessary to show that the D knew his statement would be communicated to the C… and that the C would be likely to rely on it’
What is the PoL for Goodwill v British Pregnancy Advisory Service?
- No liability unless C relied on advice given
- If reliance is foreseeable, it will be reasonable (Caparo)
- It will not be foreseeable reliance if the claimant belongs to a group of potential claimants that is too large
