Pure Economic Loss

Question 1

When is economic loss not recoverable?

Answer 1

When financial loss is not related to person injury or damage to property. Spartan Steel v Martin

Question 2

Where is economic loss recoverable?

Answer 2

Where it is caused by a negligent misstatement, rather than a negligent act. Hedley Byrne v Heller

Question 3

When is a duty of care owed in the making of a statement?

Answer 3

When a special relationship is between them.

Question 4

What are the four points which make a special relationship?

Answer 4

The defendant who made the statement posses some special skill relating to statement.
Knows it is highly likely claimant will rely on it.
Claimant does rely on it, incurring financial loss.
It was reasonable for claimant to rely on it.
JEB fasteners v bloom

Question 5

Other than duty of care, what are the other two elements of negligence?

Answer 5

Breach of duty of care.

Damage.

Question 6

Spartan Steel v Martin

Answer 6

Negligently cut off electricity supply to steelworks.

Recovery of damages for pure economic loss was not permitted as a matter of policy.

Question 7

Hedley Byrne v Heller

Answer 7

Relied on credit reference from Heller about a client, suffered financial loss.
Negligent misstatement may give rise to an action for damages of economic loss.

Question 8

JEB Fasteners v Bloom

Answer 8

C acquired company to make use of directors.

C knew financial state so could not claim reliance.