ECONOMIC LOSS

Question 1

PURE ECONOMIC LOSS

Answer 1

Financial damage suffered from the negligent act of another party which is not accompanied by physical or property damage

Question 2

APPROACHES

Answer 2

Restrictive approach and an extension of duty of care

Question 3

RULE ONE

Answer 3

There is no liability for pure economic loss resulting from negligence. ONLY ‘CONSEQUENTIAL ECONOMIC LOSS’
[SPARTAN STEEL V MARTIN]

Question 4

RULE TWO

Answer 4

Losses caused by negligence misstatement.

Question 5

HEDLEY BRYNE V HELLER

Answer 5

special relationship and sufficient proximity

Question 6

HBH 1

Answer 6

Statement must be negligently made

Question 7

HBH 2

Answer 7

There is a special relationship between parties, meaning:

Question 8

SPECIAL RELATIONSHIP 1

Answer 8

The person giving advice must have a special skill or expertise.

Question 9

SPECIAL RELATIONSHIP 2

Answer 9

D must know it is highly likely C will rely on the statement.

Question 10

SPECIAL RELATIONSHIP 3

Answer 10

C does rely on the statement and so suffers loss.

Question 11

SPECIAL RELATIONSHIP 4

Answer 11

It was reasonable for C to rely on it.
Social situations can give rise to ‘special relationships’
[CHAUDHRY V PRABHAKAR]