Pure Economic Loss Case Study

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As a general rule the law of tort does not permit recovery of damages for intangible economic loss. However, in limited situations the court allows recovery of economic loss that cannot be classified as pure economic loss. In order to establish what loss amounts to pure economic loss and cases which does not constitute to this doctrine has become problematic, causing this area of tort law to lack clarity especially in ascertaining cases that amounts to negligence and those that do not. This essay will critically discuss the law in relation to negligently inflicted economic loss and demonstrate why it lacks coherence and in dire need of reform; this will be analysed together with case law.
The term economic loss can be defined as a type of
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Historically it’s been said that pure economic loss forms an “exclusionary rule” in the law of negligence and that exception to this principle was developed by the House of Lords in Hedley Byrne v Heller and Partners which is a bench mark case demonstrating the differences between the types of loss. The legal issue in this case was whether a claimant in tort of negligent could recover for damages in pure economic loss which resulted from the defendants acting in negligence and false statement. This is known as negligent misstatement and it is based upon an assumption of responsibility, where the defendant makes a statements knowing that it will be relied upon by the claimant. Prior to the decision in Hedley Byrne, the assumption that one party may owe the other party a duty of care for …show more content…
In these cases it may appear that the claimants recover for loses for which they have no right to. However the notion on which the claimant must base his or her case on a primary right is foundational . For example Allan Beever suggests that:
“We should attempt to understand negligent misrepresentation and the economic torts in terms of the primary rights they protect. And believes that we must understand liability for negligent misrepresentation as deriving from an assumption of responsibility and hence as allied to contract law in that the claimant’s primary right is based on the defendant’s consent”.
It seems with the exception of White v Jones , the case law of England and Wales is revealed to be perfectly principled and “does not require an endless policy debate that have beset legal analysis in recent years and continued to do so in other Commonwealth Jurisdictions; therefore it must be a significant gain”

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