Pure Economic Loss Flashcards
What is the general rule regarding duty of care and pure economic loss?
There is no duty of care owed by D to C to not cause pure economic loss
What is Pure Economic Loss?
Loss caused without physical damage to C’s person or property
What does Pure Economic Loss not include?
Consequential economic loss
Provide examples of consequential economic loss
Personal injury leading to loss of earnings
Damage to property leading to loss of earnings is recoverable
Give examples of pure economic loss situations
Economic loss caused by acquiring a defective item of property - cost of repairing or replacing the defective item is PEL and not recoverable
Economic loss unconnected to personal injury to the claimant or physical damage to the claimant’s property
Economic loss caused by damage to the property of a third party - where a fault caused manufacturing to shut down, the time and money lost because manufacturing couldn’t be done was PEL and unrecoverable
Economic loss where there is no physical damage: actions - escape of a virus that reduced value of cattle
Economic loss where there is no physical damage: statements
What is the position where there is no physical damage, but financial loss through a statement?
Generally no duty of care
What does liability for negligent statements depend upon?
Existence of a ‘special relationship’ involving an assumption of responsibility by D and reasonable reliance by C
What are the five conditions that indicate an assumption of responsibility by D?
- D knows the purpose of advice
- D knows the advice will be communicated to C
- D knows C is likely to act on the advice without independent enquiry
- C acts on the advice to their detriment
- C’s reliance must be reasonable
How does the special relationship re negligent statements apply when the advice is given to a third party, but causes a loss to C?
C might be able to claim for pure economic loss
Example - The client recently supplied a report to the local council about a prospective employee. However, the prospective employee was rejected for the job because the report from the client stated that he had several criminal convictions. In fact, this was untrue and the report was therefore inaccurate
The prospective employee and the client supplying the report have a special relationship
In what situations is it unreasonable for C to rely on D’s advice?
Social situations
What must be proven after establishing duty of care regarding PEL?
Breach and causation
What are the two requirements for D to rely on an exclusion notice?
- Reasonable steps to bring the notice to C’s attention
- Wording of the notice must cover the loss suffered
Under what conditions can D disclaim liability for negligent acts?
Where the Unfair Contract Terms Act or Consumer Rights Act apply, D can disclaim liability for negligent acts causing other damage, provided the disclaimer is reasonable under the UCTA or fair under the CRA
What liability cannot be excluded?
Death or personal injury stemming from negligence
