Negligence: Pure Economic Loss & Pure Psychiatric Harm

Question 1

Rule: Pure economic loss duty of care

Answer 1

GR: D does not owe C a duty of care not to cause PEL
* C cannot recover damages
* Due to lack of proximity in relationship

Question 2

Categories of PEL

e.g. loss not recoverable

Answer 2

• defective goods (cost of replacement not recoverable)
• Loss arising from damage to another’s property
• negligent act causes PEL
• negligent statement causes PEL

Question 3

3 exceptions

Exceptions to GR that no duty of care for PEL

Answer 3

• Negligent statement (assumption of responsibility and reasonable reliance)
• Wills
• Referee

Question 4

Tests

When will D owe C a duty in respect of negligent advice / misstatement?

Answer 4

• Reasonable reliance

1. Reasonable for C to rely on D’s advice; and
2. D knew or ought to have known C was relying on their advice

• Did D assume responsibility toward C?

1. D communicated advice to C (specifically or as a member of ascertainable class) or knew advice would be communicated to C
2. D knew purpose for which C would use the advice
3. D knew C would act without independent inquiry; and
4. C acted on D’s advice to their detriment

Question 5

Duty owed by:
* Solicitors in respect of Wills
* Referees in respect of references
* Social situations

Answer 5

Social Situation
No duty of care unless:
* D has more knowledge than C; and
* C makes clear will rely on D

Wills
Solicitors owe a duty to future beneficiaries (B can sue for loss of intended legacy)

References
Referee owes a duty to subject of reference to provide an accurate reference

Question 6

When can D rely on an exclusion notice?

Answer 6

1. D took reasonable steps to bring notice to C’s attention before tort was committed
2. wording of notice covers loss suffered by C
3. The clause is fair / reasonable (at time liability arose) under CRA or UCTA

Cannot exclude death or personal injury

Can exclude property damage if:
* Bargaining power?
* obtain advice elsewhere (cost and time)?
* difficulty of task
* Ability of parties to bear losses?

Question 7

General rule: duty of care for PPH

Answer 7

D does not owe duty of care not to cause PPH due to lack of proximity of relationship

Question 8

Exception to general rule no duty not to cause PPH?

Answer 8

D owes C duty where type of harm is recoverable and the relevant victim test is satisfied

Question 9

Type of PPH which is recoverable

Answer 9

1. Caused by sudden shock (not gradual build up); and
2. Medically recognised OR shock-induced physical condition (miscarriage / heart attack)

Question 10

When is a victim a primary or secondary victim?

Answer 10

Primary:
* In area of danger; or
* reasonably beleived in danger

Secondary:
* Witnesses injury; or
* Fears for another’s safety

Question 11

When is a primary victim owed a duty of care for shock induced PPH?

Answer 11

Risk of physical injury was foreseeable

Question 12

When is a secondary victim owed a duty of care for shock induced PPH?

Answer 12

1. Risk of PPH was foreseeable (person of normal fortitude)
2. Close relationship of love and affection (presumed if parent/child, husband/wife, fiancé otherwise prove)
3. Present at accident or immediate aftermath (not 8 hours later at morgue / hospital 1 hour later ok if in same condition); and
4. Sees or hears with own senses (live TV no duty unless ‘impact as great if not greater than actual sight of accident’)

Question 13

PPH and rescuers

Answer 13

Rescuers are treated the same way as primary or secondary victims