“How And Why Does English Law At Present Make It Relatively
Difficult To Claim Damages In Negligence For What It Calls ‘Pure
Economic Loss?”
‘Pure economic loss’ has been defined as a “worth incurred without any
physical injury to any asset of the plaintiff.”
What Is “Pure Economic Loss?”
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. Varying texts attempt to define pure
economic loss but it arises from negligence and furthermore, for losses
which are “purely economic” are represented under the Fatal Accidents
Act 1976. For negligent misstatements, the classic authority for the
recovery of economic loss in tort is Hedley Byrne v Heller.
From reading several cases, the term ‘pure’ suggests that a loss must be
untainted and self-representative, standing apart from other losses such
as personal injury. This is a form of loss suffered by a claimant that is not
consequential due to a result of physical damage to a person or property.
Common categories of pure economic loss are expenditure, loss of profit,
profitability or loss of some other form of financial gain. It is therefore
important to determine whether a claim is in fact consequential or pure
economic loss, as the latter is usually not recoverable in law as damages.
In a claim for personal injury following negligence of the defendant, the
claimant may be unable to resume work suffering a loss of earnings which
is a usual head of damage. We can see that this is clearly a product of
personal injury thus representing consequential loss not pure economic
loss. From previous readings, economic loss is recoverable using the law
of contract, and unless contractual terms or agreements have been
breached, there cannot be a claim for loss. Even so, there are other
categories of torts known as ‘economic torts’ that act as a vehicle of
recovery for economic interests.
What Is Involved?
Negligence is an element of common law applied predominantly in tort
cases to achieve compensation in monetary forms for the harm done
under the term “damages” for injuries incurred both physically and
mentally. If a claimant is able to prove that the defendant acted
negligently to cause injury, then a claim for damages can be made to
compensate them for harm to their body, property, mental well-being,
financial status, or intimate relationships. The ‘pleural plaques’ case in the
House of Lords: Johnston V NEI defines damages as it illustrates whether
being diagnosed with ‘pleural plaques’ was a true claim against Johnston’s
previous employers in negligence. Lord Scott refuted the claim stating
that Johnston may develop a more serious asbestos-related condition and
this cannot, by itself, form the basis of a claim in negligence. It is clear
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