Economic loss/ Negligent Misstatement Flashcards
What is the opening for economic loss?
The C may be able to claim for economic loss.
What is consequential loss?
Consequential economic loss is a loss in money which is the direct consequence of the physical damage from the negligent act. This loss is recoverable - Spartan Steel v Martin. This means that the loss can be directly linked to the actual physical damage/ injury.
What is pure economic loss?
Pure economic loss is a loss, which is not directly consequent of physical damage. Cannot claim in Tort - Spartan Steel v Martin. This financial loss cannot be directly linked to the actual physical damage or injury suffered by the C.
What is negligent misstatement?
Where D makes a statement, C relies on this statement and then suffers a financial loss.
What is the opening for negligent misstatement?
The D may be liable for economic loss, due to their negligent misstatement.
What was said in Hedley Bryne v Heller?
Hedley Bryne v Heller - set out following conditions, which is proved, give special rise to a special relationship between 2 parties - Caparo v Dickman.
What is the first condition?
1) D must posses the special skill relating to advice - based on skill and judgment of the D, and the reliance placed upon it.
What is the side rule for condition one?
SR - Social situations - General rule is D will not be liable for statements made in a social situation or informally. However, In Chaudhry v Prabhaker, advice given in a social situation could give rise to a duty of care.
What is the second condition?
D knows it’s highly likely C will reply on advice - In Mutual Life v Evatt - a duty arises when the D was in the business of giving the advice or professed special skill and judgement in the field the advice was given.
What is third condition?
C replies on advice and suffers a financial loss.
What is the fourth condition?
It is reasonable for C to rely on the advice - test is if there is sufficient proximity between the 2 parties for there to be reasonable reliance. If there is sufficient proximity, it is reasonable for C to rely (Caparo v Dickman). Also, if D has a higher authority it is more reasonable- White v Jones.
What is the side rule of the 4th condition?
Voluntary assumption of duty - no one asks for your advice but you decide to give it anyways. Hedley Bryne v Heller - maker of statement voluntary assumes a responsibility of making the statement rather than staying silent, shows the existence of duty.
