3. Negligence: Pure Economic Loss

Question 1

What are the three types of harm categorised as pure economic loss?

Answer 1

1. Damage to property which does not belong to the claimant
2. Cost of damage to a defective product which is acquired by the plaintiff
3. Financial loss not flowing from damage to claimant’s property or person

Question 2

Is pure economic loss generally recoverable?

Answer 2

No

Question 3

When is a duty owed for pure economic loss caused by negligent statements, in exception to the general rule that PEL is not recoverable?

Answer 3

When the party knows the purpose of the statement and to whom it is made, and that party relies on it to their detriment

Question 4

What is consequential economic loss and is it recoverable?

Answer 4

Loss which is a consequence of physical injury or damage, and is recoverable.

It is not PEL, because the loss is not purely economic.

Question 5

Although the cost of damage caused to a defective product acquired by the defendant is not recoverable, what should this be distinguished from which is recoverable?

Answer 5

Where the defective product causes damage to other property, as long as the damaged property is owned by the claimant

Question 6

When a claimant is able to establish the defendant owed a duty with respect to pure economic loss, what must the claimant then show?

Answer 6

That defendant breached the duty by falling below a reasonable standard, and causation (the usual way)