Economic Loss

6031 Words25 Pages
Economic Loss Economic loss suffered by the C will be regarded as pure if they do not flow from any personal injury to the C nor form any physical damage to their property. The boundaries between pure economic loss and loss which is consequential upon physical damage to the C’s property were investigated by the CoA in Spartan Steel v Martin (1973) QB 27 Like psychiatric injury, pure economic loss is often described as a problematic form of damage. Although floodgates arguments are sometimes encountered in this area, there are other reasons why a duty to take care not to cause foreseeable economic loss to the claimant is not always appropriate. Hale J, McLoughlin v Jones (2002) Psychiatric injury is different in kind from economic…show more content…
To recognise a duty here would make significant inroads into the rule of contrast, because these cases involve a bad bargain rather than harm to separate property. This approach is more controversial when applied to realty (specifically buildings) rather than chattels, and in these cases Murphy v Brentwood has been rejected in a number of common law jurisdictions. 3. Economic loss is caused by reliance on negligent statements. This kind of case was the subject of the key decision in Hedley Byrne v Heller. Hedley Byrne set out specific criteria for recognisisng a duty of care where the C has relied upon a statement maid by the D. there is much debate surrounding the exact criteria set out in Hedley Byrne and concerning its rationale and limits. The relationship between the Hedley Byrne criteria and the three stage test under Caparo v Dickman continues to cause problems. 4. Extended Hedley Byrne principle. Hedley Byrne liability has been recognised as extending beyond its particular context, in which statements were delivered by one party directly to another party. First, Hedley Byrne liability has been extended to cases that involve more than one party, including some where the claimant does not rely on the statement at all. Second, liability on the basis of Hedley Byrne has been found outside the area of negligent statements, including cases of professional services more
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