Pure Economic Loss and Pure Psychiatric Harm Flashcards
What is the general rule for cases of pure economic loss?
There is no DOC owed for cases of pure economic loss.
What happens if D damages C’s property and it causes an economic loss?
It is recoverable, as it is considered consequential economic loss - not pure economic loss.
What happens if D damages someone’s property, resulting in economic loss for C?
E.g. Their electricity cut off, so their bagels in the oven couldn’t cook and they couldn’t cook the further 500 that day.
It will only be recoverable if C suffers some property damage, e.g. the loss of the bagels.
Any future loss (e.g. lost profit on the 500 bagels) caused by property damage to anothers property, is PEL, so is not recoverable.
What is the exception to the general rule on pure economic loss?
If a negligent statement is made, which causes loss, and there is a sufficiently close relationship between C and D, there can be a DOC for PEL.
What are the requirements for a DOC under PEL?
(i) Negligent statement made;
(ii) D assumed responsibility for C;
(iii) C placed reasonable reliance on the statement;
(iv) the reasonable reliance resulted in a loss
What four criteria are necessary to ascertain whether D assumed responsibility of C?
(i) D knew the purpose for which the advice was required;
(ii) D knew the advice would be communicated to C;
(iii) D knew C was going to act on the advice without judgement;
(iv) advice was relied on by C to a detriment
How can D exclude liability for PEL?
(i) Reasonable steps to bring exclusion notice to C’s attention;
(ii) Wording of the notice covered the loss suffered by C.
What is the general rule regarding pure psychiatric harm?
No duty of care is owed. However, this is subject to several exceptions.
What are the conditions that create a recoverable ‘psychiatric harm’?
The injury must be:
- Caused by sudden shock; and either
- a medically recognised psychiatric illness (e.g. PTSD or depression); or
- a shock-induced physical condition (E.g. a heart attack or miscarriage)
What types of victims are there in pure psychiatric harm?
Primary victims; and
Secondary victims
How is a primary victim established?
Someone who was in the actual area of the danger; or
Someone who reasonably believed they were in danger
How is a secondary victim established?
Someone who witnessed an injury to someone else. There must have been:
- Foreseeable that C would have suffered psychiatric harm;
- Proximity of relationship between C and D (close ties of love and affection, presumed with parents and spouses);
- Proximity in time and space, there at the accident or in its immediate aftermath;
- Proximity of perception, must experience it with own senses (i.e. not TV)
How are rescuers treated in pure psychiatric harm cases?
Normally, if they were in the actual area of danger, they are a primary victim; if they only saw the danger and satisfy the tests, they are a secondary victim.
How does reasonable foreseeability work, regarding secondary victims, when considering those more prone to psychiatric harm? Does the egg-shell skull rule apply?
It is still assessed objectively, so the egg-shell skull rule will not apply.
