Economic Loss - Negligent Misstatement (Paper 2) Flashcards
What is economic loss?
Loss of money due to the defendant’s negligence
What are the types of economic loss?
Pure, Consequential, and Negligent Misstatement
What is pure economic loss?
Financial loss which is not consequent on any physical injury or damage to the claimant and you cannot claim for this in Tort law
What is consequential economic loss?
Loss in money which is a direct consequence of physical damage caused by negligent acts and this loss is recoverable
What is the first stage of negligent misstatement?
The defendant must possess special skill relating to the advice given, based on the skill and judgement of the defendant and the reliance placed upon it
Which case created the law for economic loss?
Spartan Steel v Martin
Which case established the four conditions which can give rise to a special relationship between the parties?
Hedley Byrne v Heller
What is the meaning of negligent misstatement?
The defendant makes a statement, the claimant relies on that statement and loses money as a result
What is the general rule about statements made informally or in a social situation?
The defendant will not be liable
Which case held that advice given in a social situation may give rise to a duty of care provided they possess relevant expertise?
Chaudhry v Prabhaker
What is the second stage of negligent misstatement?
The defendant must know that it is highly likely the claimant will rely on that advice
What was the ruling in Mutual Life v Evatt?
A duty arises when the defendant was in the business of giving that type of advice, or had professed to have special skill or knowledge in the field in which the advice was given
What is the third stage of negligent misstatement?
The claimant must rely on the advice and suffer a financial loss
What is the final stage of negligent misstatement?
It must be reasonable for the claimant to rely on the advice
What is the ruling from White v Jones?
If the defendant is in a position of authority or responsibility, then it is more reasonable to rely on their advice
