Lord Brandon gave a powerful dissenting judgment against allowing recovery for pure economic loss. This liberal trend reached its pinnacle with the decision of Junior Books Limited v. In this case, the plaintiffs entered into a contract for the construction of a factory.
The report was not given to the plaintiff but his building society. Markesinis and Deakin write that for the most part an exclusionary rule bars recovery in these cases; liability being the exception. Horsey and Rackley write that there is a general rule against recovery of pure economic losses.
Liability has also been extended to indirect statements, where, the supply of information is not made directly to the claimant, or perhaps was made for purposes other than influencing the claimant.
Since then, there have been shifting paradigms in judicial attitudes in various common law jurisdictions in relation to claims for economic loss Netto and Christudason It is submitted that Anns was incorrect in that this was not property damage at all but a defective property.
In Anns, the defendants had created defective property, not damaged property. The general exclusionary rule is also recognised by scholars. We are here to help you reach your full potential - we are Premier Law Essays.
Defective Products Until the s, there was generally no liability for pure economic loss as a result of negligent acts resulting in defective buildings. The second policy reason is that traditionally losses for pure economic loss could be policed by the law of contract and therefore tort did not need to interfere.
One important limitation also exists in that if information is prepared for the public at large then a duty of care will not be found Caparo v Dickman . There was no question of any danger to health or safety of any person or risk of damage to any other properties belonging to the owner.
Decisions have veered from allowing recovery for losses where the defect in the property was dangerous, to allowing recovery where the defect could not be categorised as dangerous, and then reverting to the orthodox approach, that the loss incurred in such situations is purely economic and therefore irrecoverable Netto and Christudason The courts have taken a cautious approach to imposing liability in pure economic loss situations due to a number of policy reasons.
However, it is important to note one important exception from the case. The loss described in Anns as physical damage was actually pure economic loss and was not recoverable. In relation to defective buildings, the retreat from Anns Murphy is complete and the scope for a duty of care narrowed.
Nevertheless, the court treated this as damaged property and imposed a duty of care. The main contractor entered into a contract with the defendants who were nominated subcontractors specialised in laying floors, to lay the flooring of certain parts of a factory. Cases in which the claimant suffered pure economic loss due to a negligent statement by the defendant provide a significant exception to the reluctance of the law to recognise an exception in this area.Pure Economic Loss In Negligence Law Contract Essay.
NAME: GUANG REN. content. Q1 Pure economic loss in negligence. Pure economic loss is financial damage suffered as the result of the negligent act of another party which is not accompanied by any physical damage to a person or property.
The blurring of the pure economic loss with consequential loss is troublesome and led to an undesirable expansion of liability (Cooke ). The case of Derry v Peek () established a presumption that liability in tort was only possible for loss caused by fraudulent rather than negligent statements.
If you choose a law essay writing. This essay has been submitted by a law student. This is not an example of the work written by our professional essay writers. Recovery of economic loss in negligence.
Pure Economic Loss Tort. 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. ‘TORTS – Essay One’ Student ID - November 14, FARMER v.
Recovery for pure economic loss in English law, arising from negligence, has traditionally been limited. Notably, recovery for losses that are "purely economic" arise under the Fatal Accidents Act ; "Economic loss in tort".
Oxford Journal of Legal Studies. 2: 1– The loss on profit arising from his inability to sell the damaged crop was a ‘consequential economic loss'. Financial loss due to his inability to plant and sell a further field of crops because of the state of the land was a ‘pure economic loss'.Download