Tort 3: Pure Economic Loss

Question 1

What is pure economic loss?

Answer 1

• damage to property which does not belong to claimant
• cost of damage suffered by defective product which is acquired by claimant
• financial loss which does not flow from damage to claimants person or property

Question 2

When is Prue economic loss recoverable / not-recoverable in action for negligence?

Answer 2

Generally not recoverable

Exception
- where it is caused by negligent statements; and
- there is a special relationship between D and C

Question 3

What is consequential economic loss and is it recoverable in claim for negligence?

Answer 3

Is loss that flows from the physical damage to claimant or their property.

Is generally recoverable.

Question 4

When is pure economic loss recoverable in tort?

Answer 4

• If it is pure economic loss caused by a negligent misstatement; and
• special relationship exists

Special relationship if:
- the advice is required for a purpose known to the defendant
- Defendant knows that the advice will be communicated to the claimant in order to be used for that purpose
- Defendant knows the claimant is likely to rely on the advice without independent enquiry
- Claimant must actually have relied on the advice; and
- it must have been reasonable for claimant to rely on the advice

Rest of Claim
- must still show breach of duty
- causation
- defences

Question 5

How might you be be able to claim damages for pure economic loss other than win tort?

Answer 5

Breach of contract may be available e

Question 6

What might be considered as part of negligent misstatement?

Answer 6

Professional negligence claims for not properly executing will
- by beneficiaries

As special relationship exists between solicitors and and beneficiaries