Economic Loss // Negligent Misstatement

Question 1

Economic loss definition

Answer 1

Pure - not consequential of any physical injury or damage to the claimant. CANNOT claim
Consequential - direct consequence of physical damage caused by negligent acts. CAN claim, recoverable
Spartan Steel v Martin

Question 2

Negligent misstatement definition

Answer 2

Where the D relies on a negligently made statement and loses money as a result.
Henley Byrne v Heller set out 4 conditions that give rise to a special relationship between the parties (Caparo v Dickman)

Question 3

Stage 1 - special skill relating the advice given

Answer 3

This asks whether the D has a special skill relating to the advice they have given to the C. This is based on the skill and judgement of the D and the reliance placed upon it by the C.

Side Rule - social situations mean the D will not be liable (in conversation) (Chaudhry v Probaker)

Question 4

Stage 2 - likely to rely on advice?

Answer 4

If the D is in the business of giving that type of advice or have professed a special skill in the profession, then they are more likely to rely on the advice (Mutual Life v Evatt)

Question 5

Stage 3 - relies

Answer 5

Does the C rely on the D’s advice and suffers a financial loss

Question 6

Stage 4 - reasonable?

Answer 6

It must be reasonable for the C to rely on the D’s advice
This asks if there is sufficient proximity between the parties (Caparo v Dickman)
if there is proximity this means that it is more reasonable for the C to rely on the advice - if the D is in the position of authority or responsibility, it is more reasonable to rely on their advice (White v Jones)

Voluntary assumption of duty - give advice without being asked (Hedley Byrne v Heller)