Negligence: Pure Economic Loss

Question 1

Generally, is pure economic loss recoverable in an action in negligence?

Answer 1

No

Question 2

Give three examples of pure economic loss in tort law

Answer 2

1. Damage to property not belonging to C
2. Damage suffered to a defective product
3. Financial loss which doesn’t flow from damage to C’s person or property

Question 3

What three types of losses/damage is recoverable in tort law?

Answer 3

1. Consequential economic loss
2. Damages for physical injury to C’s person
3. Damages for physical damage to C’s property

Question 4

When can damages for pure economic loss be recoverable?

Answer 4

If they arise from negligent misstatements by D

Question 5

What 5 things must be shown to claim for pure economic loss arising from D’s negligent misstatement?

Answer 5

1.D knows that the statement will be relied on by C without independent enquiry
2. D knows the purpose for which the statement is for
3. D knows that an inaccuracy in the statement will cause C’s loss
4. C does rely on the statement and
5. C suffers losses as a result.