Pure economic loss

Question 1

What is meant by economic loss?

Answer 1

A loss that is purely financial and not consequent to personal injury or property damage (only monetary loss)

(can only claim if there is a negligent misstatement from someone in a special relationship to the C)

Question 2

Principle of Spartan steel v Martin & co

Answer 2

No claim for loss of profit for the time the factory was closed as a matter of public policy

Question 3

Two exceptions to claim for economic loss

Answer 3

• Negligent misstatement (an incorrect statement)
• Special relationship (a relationship akin to contract such as a professional/expert)

Must lead to financial loss

Question 4

Legal principle of Hedley Byrne v Heller and Partners

Answer 4

There was an actionable claim negligence, where there is a special relationship this can allow a claim for a purely economic loss

Question 5

3 part test for special relationship

Answer 5

• D has or implied to have special skill/expertise
• D shares this information with the C/knows it will be shared with the C
• D knows it is being relied upon for a specific reason

Question 6

Legal principle of Caparo v Dickman

Answer 6

No liability due to no special relationship (D did not know it was relied upon for a specific purpose) ‘ Set test for special relationship’