Pure Economic Loss

Question 1

what is the definition of pure economic loss?

Answer 1

(Spartan Steel v Martin and Co. (Contractors))-pure economic loss not caused by physical injury or damage to c can not be claimed

Question 2

what is pel caused by negligent misstatements?

Answer 2

• d gives advice or makes statements to c and c suffers a loss in relying on it
• if professional advice given for a fee c can usually claim in contract

Question 3

what is the duty of care for negligent misstatements?

Answer 3

• (Hedley Byrne v Heller and Partners)-pel made by negligent misstatements can be claimed if there is a “special relationship”
• (Caparo v Dickman)-“relationship of proximity”

Question 4

what are the steps of the relationship of proximity?

Answer 4

1. possession of a skill or expertise of d
2. d knows it is highly likely his advice will be relied upon
3. reliance by c on the advice which leads to economic loss
4. it is reasonable for c to rely on the advice
   - social situations-not normally reasonable to rely but (Chaudhry v Prabhakar)-relationship can exist in social situation
5. advice is directly communicated to c
6. no disclaimer

Question 5

what is the rule for breach of negligent misstatements?

Answer 5

did d display the care skill and expertise that would normally be displayed by a reasonably competent advisor?

Question 6

what is the rule for causation of negligent misstatements?

Answer 6

-check causation-(Barnett v Chelsea and Kensington Hospital Management
Committee)
-remedies-damages-compensatory