Pure Economic Loss

Question 1

what is pure economic loss?

Answer 1

Pure economic loss is economic financial loss unaccompanied by physical injury or damage to property.

Question 2

what are the two types of economic loss recoverable as noted in Glencar Explorations plc v Mayo co.co

Answer 2

Keane J notes there are two types of pure economic loss recoverable:

1. relational economic loss
2. Negligent misstatements

Question 3

what is relational economic loss?

Answer 3

This occurs where the actions of the def cause the loss, Must show proximity, so the ct. knows the floodgates won’t open

Question 4

reasons why courts are reluctant to grant pure economic loss

Answer 4

(i) fake/exaggerated claims
(ii) Measurability of damage
(iii) Floodgates argument

Question 5

Mcshane Wholesale v Johnston

Answer 5

The plaintiff’s factory was closed because the electricity supply was cut due to a negligently caused fire on the defendant’s adjoining premises. The plaintiff’s fruit and vegetables were destroyed.
Plaintiff suffered consequential economic loss and loss of future profits as unable to order and sell fruit and vegetables - Pure economic loss

Question 6

what does recovery for pure economic loss base on?

Answer 6

The extent of recovery will be based on proximity, foreseeability and public policy

Question 7

when is recovery for economic loss permitted in ireland

Answer 7

Glencar exploration plc v Mayo county council is an acknowledgment that recovery from economic loss is permitted in ireland in certain circumstances. He gives the following examples where economic loss has been empathetically recognised in irish courts

• Negligent misstatement (Hedly byrne)
• breach of statutory powers causing defects in local authority housing ( siney v Dublin Corporation)
• negligent provision of services (Ross v Caunters)