Pure Economic Loss

Question 1

What is economic loss

Answer 1

• ‘damage to wallet’ - claimant is less well off than would have been if the negligence had not occurred

Question 2

What is consequential economic loss

Answer 2

• occurs when a claimant suffers a money loss because he has suffered personal injury or damage to property
• can always be claimed for (is recoverable)

Question 3

What is pure economic loss

Answer 3

• this is a stand-alone economic loss, not caused by physical injury or damage to property
• not recoverable - unless through negligent misstatement

Question 4

What is a negligent misstatement

Answer 4

• inaccurate statement made honestly but carelessly

Question 5

Outline the theory underlying limiting claims for pure economic loss

Answer 5

• these losses are potentially limitless
• without the special rule for economic loss, the floodgates would be open for a number of claimants making claims for limitless amounts

Question 6

What 5 things needs to established to prove a ‘special relationship’ in order for C to claim for negligent misstatement

Answer 6

• R - reasonable for C to rely on statement
• I - in person statement made by D, not a third party
• S - skill or expertise, D doesn’t have to be professional
• K - knows how C might use the info
• S - stops liability if there is a disclaimer

Question 8

Outline ‘ reasonable for claimant to rely on statement’ as a factor in proving a ‘special relationship’

Answer 8

• C must have relied on the statement and it must be reasonable for them to do so
  Caparo v Dickman

Question 9

Outline ‘in person statement made by D, not third party ’ as a factor in proving a ‘special relationship’

Answer 9

-advice must be communicated directly to the claimant and not through a third party (to/radio etc)
(Caparo v Dickman)

Question 10

Outline ‘skill or expertise, D doesnt need to be professional’ as a factor in proving a ‘special relationship’

Answer 10

• the person giving the advice must have a special skill or expertise relating to statement
• (Lennon v MET police)

Question 11

Outline ‘knows how C might use the information ’ as a factor in proving a ‘special relationship’

Answer 11

-D must know their advice will be acted upon without the claimant taking any further advice

Question 12

Outline ‘stops liability if there is a disclaimer ’ as a factor in proving a ‘special relationship’

Answer 12

• Defendant has voluntarily taken responsibility for their statement. D could add a disclaimer so they don’t take responsibly for actions as a result of the statement
• Hedley Byrne v Heller