Economic Loss & Negligent Misstatements Flashcards
What are the two types of ecomonic loss?
Pure and consequential
What is consequential ecomonic loss?
Financial loss that is a direct result/consequence of damage to property or injury to person
Which case can be used for consequential economic loss?
The Fortunity
True or false: there is generally no liability for pure economic loss
True
What happened in Weller v Foot and Mouth Disease Research Institute and what type of loss was this?
A virus escaped D’s lab and affected cattle, making them unsaleable. An action was brought against the profits lost had the cows not been affected. This was pure economic loss, which is not recoverable
What is the one exception to the rule of no liability for pure economic loss?
Negligent misstatements
What does Hedley Byrne v Heller state must be proved between the claimant and the maker of the statement?
A ‘special relationship’
What must C first prove in a negligent misstatement claim?
That D possesses a special skill or expertise
What does Esso Petroleum v Mardon tell us about the wide approach D having a special skill or expertise?
It includes defendants who hold themselves out to having the requisite knowledge and skill required by the claimant.
Which things must be considered for the second criteria of negligent misstatements - voluntary assumption?
That D did not have to give the advise/could have kept silent, and that the advise could have been subject to a disclaimer (as in Hedley Byrne)
What two things must be known to the maker of a negligent misstatement?
The user and the purpose
In which case(s) were the defendants liable as they should have known their valuation would be passed on to C?
Yianni/Smith
Why was the defendant in Caparo v Dickman not liable for negligent misstatements?
They did not know the purpose to which C would use their accounts for (didn’t know it was for a takeover)
For the criteria resonable relience, C must show what?
That they actually relied on the statement given, and that it was reasonable for them to do so.
What may make relying on a statement less reasonable?
If there are large sums of money involved/invested, if it was given in a purely social situation (Chaudhry v Prabhakar), if it is not their job eg. not reasonable for a builder to offer legal advise even if they ‘hold themselves out as having the requisite knowledge’
