Pure Economic Loss Flashcards

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1
Q

General rule regarding pure economic loss. Case.

A

No duty of care is owed in respect of pure economic loss; such losses are not recoverable - Weller v FMDRI.

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2
Q

What is the rule regarding mixed pure economic loss/property damage? Case.

A

A claimant may claim for the property damage and any consequential economic loss stemming from that property damage - Spartin Steel v Martin.

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3
Q

What is the rule regarding defective products? Case.

A

This is pure economic loss, and is not recoverable - Murphy v Brentwood.

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4
Q

Under what circumstances may a duty of care arise in respect of pure economic loss case?

A

In respect of a negligent misstatement, where a ‘special relationship’ exists between claimant and defendant - Hedley Byrne v Heller.

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5
Q

Which case expanded on Hedley Byrne v Heller, and what 4 criteria did it set out to establish a duty of care in respect of negligent misstatement?

A

Caparo Industries v Dickman:

  1. Adviser knew purpose of statement.
  2. Adviser knew statement would be communicated to claimant.
  3. Adviser knew claimant would rely on statement without further enquiry.
  4. Claimant changed position in reliance on the statement.
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6
Q

Can a duty of care exist in respect of a negligent misstatement to a third party? Case.

A

Yes, e.g. job reference - Spring v Guardian Assurance.

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7
Q

What is the rule regarding statements made in a social context?

A

Generally no duty of care, but one may be established on the facts - Choudry v Prabakhar.

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8
Q

What is the standard of care expected of the adviser if he acts in a professional capacity?

A

He must meet the reasonable standard of his profession - Bolam v Friern Hospital.

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9
Q

What guidelines were established to help define ‘reasonable’ in relation to s11 UCTA 1977? Case.

A

Smith v Eric Bush:

  1. Relative bargaining power of parties?
  2. Could the claimant have sought advice from an alternative source?
  3. How difficult is the task in question?
  4. Could either party have sought insurance?
  5. Practical consequence, i.e. who has better resources to meet liability?
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