Pure Econom Ic Loss And Consequential Economic Loss

2292 Words Mar 11th, 2015 10 Pages
There is a fundamental distinction between Pure Econom-ic Loss and Consequential Economic Loss, as Pure Eco-nomic Loss occurs independent of any physical damage to the person or property of the victim. What is common to both types of claims is that in order to successfully claim or even “have a leg to stand on” there must be proof of a” duty of care” having been broken. As long as you can show the defendant has breached their “duty of care” and you have suffered foreseeable damage then you can recover. The problem with Pure Economic Loss is that the classes of people who can recover is very limited. The Courts have tried to keep it this way in order to keep the number of claimants as low as possible. The fear is that if claims for purely economic loss are allowed then it would encourage more claims of this type.
Chief Justice Cardazo from America stated ‘Recovery of economic loss in the absence of physical damage or per-sonal injury would expose defendants to liability in an in-determinante time to an indeterminante class.’
This general rule applies in Scotland, meaning that if there is no liability for causing Pure Economic Loss, this is be-cause of the Courts reluctance to open the floodgates to an infinite number of claims. The rules for how the Courts respond to these claims are set out in Common Law which has evolved over the years, where patterns have formed and have now established one of the vital legal frame-works for Delict Law in Scotland.

A crucial case…
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