Economic Loss

Question 1

Consequential Economic Loss

Answer 1

• Consequential economic loss occurs when the claimant suffers a loss of money because he has suffered physical loss. The economic loss s a result of the negligent act/physical loss.
• You can claim for consequential economic loss.

Question 2

Pure Economic Loss

Answer 2

• This is stand alone economic loss, where there is no personal injury or physical damage, just a loss of money.
• Generally pure economic loss isn’t recoverable. However, it is if it arises from a negligent misstatement or if there is a special relationship between C and D.

Question 3

Negligent Misstatement

Answer 3

• Relates to a representation of fact, which is not true and is relied on by another party to their disadvantage.

Question 4

Special Relationship- 5 factors

Answer 4

• The defendant must possess a special skill.
• The claimant must rely on statement to his/her detriment.
• The reliance must be reasonable.
• The advice must be required for a purpose made known to the advisor.
• If the advice will be passed on to the person ultimately relying on it, this must be made known to the advisor.

Question 5

Special Relationship- The defendant must possess a special skill + Case

Answer 5

• If someone proclaims knowledge on an area they don’t actually have knowledge in, they will still be regarded as having that special skill.
• Mutual Life v Evatt.

Question 6

Special Relationship- The claimant must rely on the statement to his/her detriment + Case

Answer 6

• The claimant must rely on the statement to their loss.
• Yianni v Edwin Evan’s and Sons

Question 7

Special Relationship- The reliance must be reasonable + Case

Answer 7

• Must be given when advisor is in reasonable state of mind.
• James McNaughton Paper Group v Hicks.

Question 8

Special Relationship- The advice must be required for a purpose made known to the advisor

Answer 8

• ## The advisor must be informed on the reason for the advice.

Question 9

Special Relationship- If the advice will be passed onto the person ultimately relying on it.

Answer 9

• If the advice is going to be passed onto a third party, the advisor must be made known about it.