Tort 2 - Pure Economic Loss

Question 1

What is pure economic loss?

Answer 1

1. Damage to property that isn’t the claimants
2. Cost of damage of a defective product
3. Financial loss which doesn’t flow from damage to claimant or their property

Question 2

What is the general rule relating to pure economic loss?

Answer 2

Cannot claim for pure economic loss

Question 3

What is consequential economic loss?

Answer 3

Economic loss which is consequential from negligence is recoverable

Question 4

If a defective product causes damage to other property, will this succeed

Answer 4

Yes - claimant can claim for damage to other property

Cannot claim for defective product itself

Question 5

What is pure economic loss caused by negligent statements?

Answer 5

Financial loss that doesn’t flow from damage to person or property

e.g. buying bad shares off financial advice

Question 6

What is the special relationship exception for pure economic loss caused by negligent statements

Answer 6

1. Advice for purpose which D knows about
2. Advice used for that purpose
3. Claimant relied on the advice without independent enquiry
4. Reasonable for claimant to rely on the advice

Question 7

What does a claimant have to satisfy if its shown the defendant owed a duty of care?

Answer 7

D fell below reasonable standard of care and that breach was the cause of the loss