Pure Economic Loss Flashcards
General rule regarding pure economic loss. Case.
No duty of care is owed in respect of pure economic loss; such losses are not recoverable - Weller v FMDRI.
What is the rule regarding mixed pure economic loss/property damage? Case.
A claimant may claim for the property damage and any consequential economic loss stemming from that property damage - Spartin Steel v Martin.
What is the rule regarding defective products? Case.
This is pure economic loss, and is not recoverable - Murphy v Brentwood.
Under what circumstances may a duty of care arise in respect of pure economic loss case?
In respect of a negligent misstatement, where a ‘special relationship’ exists between claimant and defendant - Hedley Byrne v Heller.
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?
Caparo Industries v Dickman:
- Adviser knew purpose of statement.
- Adviser knew statement would be communicated to claimant.
- Adviser knew claimant would rely on statement without further enquiry.
- Claimant changed position in reliance on the statement.
Can a duty of care exist in respect of a negligent misstatement to a third party? Case.
Yes, e.g. job reference - Spring v Guardian Assurance.
What is the rule regarding statements made in a social context?
Generally no duty of care, but one may be established on the facts - Choudry v Prabakhar.
What is the standard of care expected of the adviser if he acts in a professional capacity?
He must meet the reasonable standard of his profession - Bolam v Friern Hospital.
What guidelines were established to help define ‘reasonable’ in relation to s11 UCTA 1977? Case.
Smith v Eric Bush:
- Relative bargaining power of parties?
- Could the claimant have sought advice from an alternative source?
- How difficult is the task in question?
- Could either party have sought insurance?
- Practical consequence, i.e. who has better resources to meet liability?