Tort - Economic Loss

  • Created by: huth0
  • Created on: 12-02-18 21:27

Economic Loss

Negligent Acts:

·         Claimant can sue for economic loss that follows physical loss but;

·         can only claim economic loss following negligent act in certain circumstances.

·         Negligent statements are dealt with differently

Consequential Economic Loss:

·         Network Rail Infrastructure Ltd v Conarken 2011

·         Loss is secondary to the damage

Pure Economic Loss:

·         Must first establish whether the loss is pure economic loss;

·         There are two types of losses caused by negligence;

o    Pecuniary Losses – related to money

o    Non-pecuniary losses – non-specific financial loss e.g. Loss of earnings/pain and suffering

·         Difference between pure and other types of loss

o    Spartan Steel & Alloys Ltd v Martin & Co Ltd 1973

§  Defendants negligently cut an electricity mains cable supplying power to the claimants’ factory.

§  Court allowed for recovery of physical damage to property and consequential economic loss but not the anticipated profit/pure economic loss.

§  This shows that a duty of care is only owed in respect of financial losses relating to property damage caused by the defendant’s negligence.

Defect of Quality in Goods or Property:

·         Muirhead v Industrial Tank Specialities Ltd 1986

o    A manufacturer of goods could be liable in negligence for economic loss suffered by a purchaser if there was very close proximity and the purchaser placed real reliance on the manufacturer rather than the vendor.

Defect of Quality in Buildings:


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