Pure Economic Loss in Law

Loss that is not a result of personal injury or physical damage to property; it is purely financial.

A legal principle where a defendant is not liable for pure economic loss caused to a third party due to damage to property.

A case where the defendant's negligence resulted in the closure of a cattle market due to an outbreak of foot and mouth disease. The claimant, whose business suffered due to the closure, could not recover losses because the loss was deemed 'pure economic loss.'

An exception to the general rule of no duty of care for pure economic loss, where a special relationship exists between the claimant and the defendant.

A landmark case where the House of Lords recognized a potential duty of care for negligent statements that cause pure economic loss, BUT established that a disclaimer can absolve liability.

In a social situation, there is usually no duty of care for advice given because there is no assumption of responsibility by the advisor.

A case that clarifies the lack of duty of care for social advice, but shows exceptions.

Even though Chaudhry was decided before Caparo, it helps understand the elements of the Caparo test in determining duty of care.

In Chaudhry, the defendant's knowledge and experience in cars, combined with the claimant's reliance, made the advice more than a casual social exchange.

The claimant's reliance on the defendant's knowledge and experience in cars was a key factor in establishing a duty of care.

A landmark case that established a fundamental principle in negligence law: a defendant generally doesn't owe a duty of care to prevent pure economic loss to a claimant. This principle helps set boundaries for legal liability.

When a defective product or property doesn't directly cause physical damage or injury, but results in financial loss due to its reduced value or the cost of repairs.

When a claimant suffers personal injury or damage to other property as a result of a defective product or property, it's more likely for a duty of care to arise. This is because the defendant's actions led to tangible harm.

Economic losses that aren't directly linked to the claimant's personal injury or damage to their own property.

A case that demonstrated that a claimant can recover damages for economic losses resulting from the negligent damage to a third party's property. However, the loss must be directly related to the claimant's own property or business.

A type of economic loss that arises from the negligent damage to a third party's property. Courts are more likely to find a duty of care in these cases because the claimant's losses are directly linked to the damage to another party's property.

When a defendant negligently damages a claimant's property, resulting in financial loss, there's a strong likelihood of a duty of care arising. This is because the defendant's actions directly led to the claimant's economic damage.

A legal principle where a defendant can be held liable for pure economic loss caused to a third party by negligent provision of professional services, even without a direct contract.

A case where the court extended the Hedley Byrne principle to situations involving negligent provision of professional services, finding liability for pure economic loss.

A complex case that demonstrates the extension of the Hedley Byrne principle to professional services, allowing claims in tort even when a contract exists but is statute-barred.

The legal principle that a duty of care can exist between parties, even without a direct contractual relationship, when one party assumes responsibility for the other.

The principle established in Hedley Byrne that a duty of care can arise when one party makes a statement to another, knowing that the other party will rely on it.

A legal principle that generally prevents recovery for pure economic loss suffered by a third party due to damage to another's property.

A situation where a defendant has assumed a responsibility towards the claimant, and the claimant suffers financial loss due to the defendant's negligence.

A case that established that a duty of care can exist if the defendant: assumed responsibility towards the claimant, knew the purpose of the advice, knew the advice would be communicated to the claimant, knew the claimant would likely act on the advice without independent inquiry, and the advice was acted upon to the claimant's detriment.

The defendant provided a negligent and unfavourable reference about the claimant to the claimant's prospective employer, leading to the claimant not getting the job and suffering financial loss. The court found that the defendant owed a duty of care to the claimant.

The defendant, a solicitor, negligently delayed drafting a will for the client, resulting in the client dying before completing the new will, and the beneficiaries suffering financial loss. This case extended the Hedley Byrne principle to this new situation.

The Hedley Byrne principle has been extended to situations where the defendant assumed a responsibility, even if the negligent statement was made to a third party, not directly to the claimant.

The Hedley Byrne principle covers situations where the defendant has assumed a responsibility towards the claimant, even if the loss is purely financial and not caused by physical damage.

A claimant can recover financial loss due to a defendant's negligence, even if the loss was caused by the defendant's statement made to a third party, not directly to the claimant.

In situations where the defendant has assumed a responsibility towards the claimant and the claimant acts upon the defendant's advice, causing financial loss, the defendant may be held accountable for the pure economic loss suffered.

To rely on an exclusion notice, a defendant must prove they took reasonable steps to make the notice clear to the claimant before the tort occurred.

The wording of an exclusion notice must clearly cover the specific type of loss suffered by the claimant.

The Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015 limit a defendant's ability to exclude liability, especially for negligence leading to injury or death.

The UCTA 1977 ensures a defendant cannot completely avoid liability for death or personal injury caused by negligence.

Under UCTA 1977, a defendant can only exclude liability for other types of loss (not death or injury) if the exclusion is deemed 'reasonable' in the circumstances.

The CRA 2015 also requires 'fairness' in exclusion clauses, considering any imbalance in the parties' rights and obligations. This is similar to UCTA 1977's focus on reasonableness but prioritizes good faith and consumer protection.

The UCTA 1977 applies when the defendant is acting in a course of business, meaning they're regularly involved in this type of activity.

The CRA 2015 applies when the defendant is acting as a 'trader' and the claimant is acting as a 'consumer' for purposes outside their usual business or profession.

The House of Lords in Smith v Eric Bush & Harris v Wyre Forest District Council [1989] ruled that surveyors owe a duty of care to homebuyers to provide a reasonably accurate valuation.