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Pure Economic Loss - Coggle Diagram
Pure Economic Loss
Exceptions
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wills
White v Jones- solicitors owe a duty to beneficiaries of wills- here, the solicitor had undertaken a responsibility to change the will to include the daughters, the pure economic loss is recoverable
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references
Spring v Guardian Assurance- people providing job references owe a duty to the body requesting the reference as well as the subject of the reference to provide an accurate statement (this pure economic loss is recoverable)
Negligent statement
Hedley Byrne- giving a false credit reference would be recoverable, but for the disclaimer stating 'advice was prepared without responsibility) this may now be scrutinised by UCTA
a) C relies on D's advice (objective), b) reasonable for C to rely on D's advice, c) D knew/ought to have known C would rely on advice
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- Voluntary assumption of responsibility (was the relationship equivalent to contract- but for the absence of consideration, would there be a contract)
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Caparo v Dickmann 1. D must communicate advice to C or know it will be communicated 2. must know purpose they are using advice for (important) Manchester Building Society v Grant Thompson 3. D knew or reasonably believed C would rely on advice 4. C acted upon advice to their detriment
- Special relationship of trust and confidence- C entrusts D to take an amount of care reasonable for the circumstances, whether advice giving party knew or ought to have known C was relying on them
Disclaimers
Hedley Byrne- 'without responsibility' worked in the past. Smith v Eric Bush shows this is now subject to UCTA/CRA
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General
Pure economic loss: economic loss which arises absent of property damage or injury to their person (not recoverable generally)
Types
Economic loss not flowing from personal injury or property damage: bad investment, missed opportunity or lost inheritance
Loss arising from the damage of property from another: pure economic loss if loss is caused by damage to property they have no proprietary interest in
Weller & Co v Foot & Mouth Disease Institute- loss arised by damage to local farmer's cattle so it was not recoverable (pure economic loss) if their own cow was infected then they could claim for loss of profit for seeling that cow (consequential)
Defective items: if items were defective from purchase, likely a contractual claim available, not negligence, only negligence if a product up to standard is then made bad
Murphy v Brentwood District Council- cost of repairing inherently defective products was pure economic loss (not recoverable) and worsening of an inherently defective product is still pure economic loss
Calculating if pure economic loss: Spartan Steel & Alloys v Martin & Co- metals they were producing were damaged (property damage), inability to sell due to metal loss (loss of profits were consequential loss), damage to cable they used owned by a third party and the economic loss flowing from it would not be recoverable (pure economic loss) would be consequential if the claimant owned the cable