economic loss and psychiatric injury

Question 1

Theory of tort law - economic loss

Answer 1

-while a duty of care of care is owed to claimants to not damage property
- there is no duty to compensate for loss of profit
2 reasons for this
1. financial or economic loss would traditionally be compensated through law of contract
2. allowing claims will open floodgates to similar claims.

Question 2

Economic loss caused by negligence

Answer 2

• if a claimant successfully proves a negligent act or omission by another they will be able to claim damages for
• any physical injuries
• any damage to property

for example in a car accident caused by negligent driving
the claimant can claim for any personal injury and the cost of the repair of any damages to the vehicle

the claimant will also be liable for any consequential economic loss

• claimant cannot for pure economic loss e.g. loss of cost of profit for a business that is not operating during the injury
  however exception for calming for pure economic loss is when the loss is a result of acting on a negligent mistreatment. - if there is a special relationship w the d that gave the advice - As seen in Hedley v Byrne

Question 3

Spartan Steel Martin and co(contractors) Ltd 1973

Answer 3

3 parts to the claim of the electric cable being cut and a result in loss of power at the whole factory .
1. for the damages to the melts of the production line and the furnace -this could be a successful cliam as it was physical damage

• loss of profit due to the melts.- could be claimed successfully as it amounted to the consequential economic loss of physical damage.

-loss of profit while the factory was out of acution. - it was decided by the CoA that this part of the claim shouldnot be allowed as it amounted to pure economic loss.
-was a financial loss that was not caused by physical damage to he claimant.
- thislossofprofit wasbetter borne by the insurers rather then the defendantsalone.

legal principle- a line must be drawn as a matter of poloicy