Pur Economic Loss

Question 1

Pure economic loss types

Answer 1

2 types

Consequent economic loss - losses flow from the injury

And pure economic loss - only this treated as separate category

Question 2

Hedley burns heller

Answer 2

Relationship so close it’s almost contractual

Question 3

Was economic loss cause by negligent act or negligent misstatement ? Hedley Byrne v heller

Answer 3

Distinction- loss caused by statements vs losses caused by actions

Same result so no reason to see a distinction.

But judges do make a distinction
Act eg crashing a train
Vs negligent advice (write a negligent reference)

Question 4

General rule for pure economic loss Spartan steel

Answer 4

You can’t claim if it’s caused by a negligent act.

Construction in the road and severed a power cable to a factory and factory made metal.

Some metal ruined. Property damage.

Loss of profit as they couldn’t sell the metal. This is consequent loss and allowed to claim.

3rd loss metal they couldn’t produce while power out. That’s pure economic loss and court said you can’t claim for that. I e profits you were going to make.

You should have insurance for this.

Question 5

Claiming for pure economic loss to property what must you have ?

Answer 5

You must own the property

Question 6

Distinction between damage and defect

Answer 6

Courts make distinction between courts treat defect product and losses flowing as pure economic loss.

Eg donohue v Stephenson (snail) bottle was defective.

She claimed injury caused by defective product. This rule also applies to buildings. Eg builders built defect.

Question 7

If you give negligent advice can negligent advice cause personal injury?

Answer 7

Special rules only apply if claimant suffer injury we use caparo

Question 8

Test for liability two party relationships negligent statements

Answer 8

Hedley Byrne v heller
1 reasonable reliance
2 assumption of responsibility
3 special relationship

Question 9

Negligent mistatements

Answer 9

You can claim pure economic loss if there is a special relationship between claimant and defendant (hedley Byrne v heller)

• asked bank for a reference
• provided letter with a disclaimer (not liable for what is said)
• in the absence of a disclaimer a duty would arise

1. Relying on skill and judgement
   2 def knew or ought to know claimants was relying on him
   3 it was reasonable for claimant to rely on defendant

Question 10

Clarify SC NR v Steel + BNL v playboy club

Answer 10

NRAM v steel
- affirmed that
2 stage negligent misstatement
1 foresee reasonably to rely on the advice
2 reasonably foreseeable in the circumstances

Question 11

Standard of care expected of special skill or knowledge

Answer 11

Bolam test
Standard of man professing to have that skill.

This doesn’t apply to negligent medical advice - Montgomery
Sc held it is for the person to decide the risk.
In patients position attach significance to the risk.

Dr aware of material risks involved.