Pure Economic Loss

Question 1

Pure economic loss - definition

Answer 1

Economic losses which are not consequential on damage to property or personal injury

Question 2

Pure economic loss - summarys

Answer 2

Generally no duty of care owed - not generally a recoverable type off harm in negligence
If duty of care owed in negligence through personal injury and property damage - consequential economic losses recoverable
law Developed restrictively to maintain floodgates

Question 3

Four ways pure economic loss may be inflicted

Answer 3

No physical damage - weller and co v foot and mouth disease research institute 1966 - cattle auction house closed - failed claim -‘rylands v fletcher rule thing already on land or naturally - pure economic loss not recoverable g
Goods or property defective - Murphy v Brentwood 1991’- damage to houses classes as pel but not recoverable
Damage to third party property - Spartan steel v Martin - pel but not recoverable.
Negligent statement causes. Loss- Hedley Byrne and co ltd v heller and partners 1964 - did Not succeed but created rule a duty of care arises in the case of negligent statements causing pure economic loss when there is a special relationship between parties

Question 4

Pure economic loss - established rule

Answer 4

Hedley Byrne and co ltd. v heller and partners ltd 1964 - did Not succeed but created rule a duty of care arises in the case of negligent statements causing pure economic loss when there is a special relationship between parties

Question 5

Pure economic loss - special relationship means

Answer 5

Assumption of responsibility by. Defendant

Claimant reasonably relies on the defendant

Question 6

Pure economic loss - third party involved

Answer 6

Caparo v dickman - duty of care in negligence
Four criteria need to be satisfied
1) adviser knew purpose advice required
2) advisor knew advice would be communicated to the advisee
3) adviser knew advisee was likely to act on advice
4) advice was acted upon to a detriment

Question 7

Pure economic loss - extension to Hadley Byrne

Answer 7

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Question 8

Pure economic loss - disclaimers

Answer 8

Before d relies on disclaimer 
Reasonable steps taken to bring to c attention
Wording covers loss 
If above satisfied 
UCTA 1977 - if c in course of business 
Cra 2015 - if c consumer
For both d must be in course of business

Question 9

Pure economic loss - problem question structure

Answer 9

A claim in negligence
Parties
Duty of care - Caparo industries v dickman 1990 short
General rule - Spartan steel and alloys ltd v Martin and co (contractors) ltd 1973 - duty of care not owed for loss that is not consequential upon physical damage to claimants property
Exception - hedley byrne and co ltd v heller and partners ltd 1964 - special relationship arising on assumption of responsibility / defendant possesses special skill - knows claimant will rely on it and claimant reasonably relies on it
Skill - White v Jones 1995
Reliance - beneficiary will rely on being drafted correctly
Caparo large
Knew purpose
Knew advice would be communicated - or to member of ascertain able class
Was likely to act
Acted to detriment
Breach
Causation - but for test Barnett v Chelsea 1968
Remoteness - reasonably foreseeable - wagon mound 1967
Defence - none likely