PLEASE help!! Pure economic loss?

Can someone please explain to me in simple terms when you can and when you cannot recover pure economic loss.

From what I gather you can not recover unless you have a contract, a duty of care under DvS/Caparo (and this is only for negligent statements) or assumption of responsibility under Hedley Byrne (this can be statements or acts). You cannot recover for defective buildings since Murphy v Brentwood.

Please please someone tell me if this is right and if it isnt what is!!!!

Thank you!!!

:confused:

Reply 1

zeek

Hi,

Pure economic loss is normally irrecoverable Spartan Steel v Martin 1973

Exceptions are, as you say. Negligent misstatement Hedley Byrne and similar cases ie Spring v Guardian 1994 (reference case) and Henderson v Merrit 1994 (assumption of responsibility by professional service).

Defective buildings are precluded (as per Murphy) unless they pose a threat to someone else's adjoining property.

Additionally there is the complex structure theory from D & F Estates v Church Commissioners for England 1988. '...damage to one part of the structure caused by a hidden defect in another part may qualify to be treated as damage to other property'however this was qualified in Murphy to include work done by a separate contractor. However, this is arguable rather than authoritative.

Hope this is of some help.

Reply 2

LuverlyLawyer

So not where there is a duty of care? Can you recover pure economic loss if you can show a duty of care??

Reply 3

MissAmy

The DvS duty of care/neighbourhood test is only applicable to personal injury cases, not to economic loss (ie - Caparo.)

The tests that arise from the case you've already mentioned, is of proximity between the pursuer and the defender (that it is a proximate enough relationship to be akin to a contract), the reliance of A (pursuer) upon C (defender), and that C knows the identity of A.

Reply 4

viviki

heres some very very basic reference stuff
http://www.lawteacher.net/Tort/Product%20Liability/Liability%20for%20Goods%20Lecture.htm

Reply 5

zeek

LuverlyLawyer

So not where there is a duty of care? Can you recover pure economic loss if you can show a duty of care??

Think of the Duty of Care as being a policy device the courts use to identify classes of people who can claim in negligence.

If you are in that class then so long as you can show the defendant has breached their duty of care and you have suffered foreseeable damage then you can recover (barring any defences).

The problem with pure economic loss is that the classes of people who can recover is very limited. Even if you think you have satisfied the tripartite test in Caparo and can 'show' a duty of care, if it doesn't fall into a previously decided class there is no duty (unless you can persuade the court to add a new class of claimant).

Hope this makes sense.

Reply 6

MissAmy

Also - Caparo is undermined in that it was decided when Anns was still in force. Although Caparo has never been overruled, it hasn't been followed either.