The Courts Attitude Towards Pure Economic Loss

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In order to examine the courts attitude towards pure economic loss it is essential to first establish the definition of such a claim. Pure economic loss can be defined as 'financial damage suffered as a result of the negligent act of another party which is not followed by any physcial damage to a person or property. '1 . An allegation towards a recovery for pure economic loss can originate from an array of different scenarios, most frequent accusations are constituted by negligent mistatements and defective property. Prior to the early 1980 's recovery for pure economic loss was and still is to an extent virtually impossible. The courts distressed that a recovery in pure economic loss would , sooner or later, influence a multitude of…show more content…
The information was inaccurate as it suggested Easypower was financially sound when in fact they were not. As a result the plaintiff lost money which consequently led to an action being brought up against Heller. The issue towards this case was, does a duty of care arise towards statements that induce pure economic loss? The house of lords discovered that a duty of care was owed , however the defender had used an effective disclaimer of liability , meaning the losses were irrecoverable. Lord Reids judgement was that a duty of care will arise when there is a special relationship between the parties which can ulitmately be implemented towards a scenario where "it is plain that the party seeking information or advice was trusting the other to exercise such a degree of care the circumstances required, where it is reasonable for him to do that, and where the other gave the information or advice when he knew or ought to have known that the inquirer was relying on him ' 5 Acorrdingly , it could be assumed that the courts did change their attitude towards a recovery for pure economic loss on the basis of a negligent misstatement as the Hedley Byrne v Heller case insinuated a recovery may be possible if the following criteria are met ; there is clear reliance by the plaintiff on the
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