View source for Pure economic loss in English law

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{{EngTort}}
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 1976]]; and for negligent misstatements, as stated in ''[[Hedley Byrne v. Heller]]''. Economic loss generally refers to financial detriment that can be seen on a balance sheet but not physically. Economic loss is then divided into "consequential economic loss" - that which arises directly from some physical damage or injury (e.g. loss of earnings from having your arm cut off) and "pure economic loss", which is everything else.
The fear behind allowing claims for "pure economic loss" is that potentially [[floodgates principle|unlimited claims could flood in]]. The risks may be unknowable, and parties would find it impossible to [[insurance|insure]].<ref>''[[Canadian National Railway Co. v. Norsk Pacific Steamship Co.]]'' [1992] 1 SCR 1021 (Canada), ''per'' McLachlan J</ref><ref>Bishop (1982)</ref> The U.S. [[judge]] [[Benjamin N. Cardozo]] famously described it as, "liability in an indeterminate amount, for an indeterminate time, to an indeterminate class".<ref>''Ultramares v. Touche'' 174 N.E 441, 444 (N.Y. 1931) (USA)</ref>
Examples of '''pure economic loss''' include:
*Loss of income suffered by a family whose principal earner dies in an accident. The physical injury is caused to the deceased, not the family.<ref>''[http://www.bailii.org/ew/cases/EWHC/KB/1808/J92.html Baker v. Bolton]'' (1808) 1 Camp 493 (England and Wales)</ref>
*Loss of market value of a property owing to the inadequate specifications of foundations by an [[architect]].<ref>''[http://www.bailii.org/uk/cases/UKHL/1991/2.html Murphy v. Brentwood District Council]'' [1991] 1 AC 398 (England and Wales)</ref><ref>''Sutherland Shire Council v. Heyman'' (1985) 60 ALR 1, at 60-61 (Australia)</ref><ref>''Winnipeg Condominium Corporation No.36 v. Bird Construction Co.'' [1995] 1 SCR 85 (Canada)</ref>
*Loss of production suffered by an enterprise whose electricity supply is interrupted by a contractor excavating a public utility.
The latter case is exemplified by the case of ''[[Spartan Steel and Alloys Ltd v. Martin & Co. Ltd]]''.<ref>[1973] QB 27</ref> Similar losses are also restricted in [[German law]]<ref>van Gerven (2001) ''pp''187-188</ref> though not in [[French law]].<ref>van Gerven (2001) ''pp''198-199</ref>
==Complex structure theory==
{{main|complex structure theory in English law}}
The complex structure theory is an argument which has been put forward in pure economic loss cases which suggests that a large chattel may be considered to consist of several parts and so damage to other "property" for the purpose of applying ''Donoghue v Stevenson'' principles.  This theory as a normative doctrine has been rejected by Lord Bridge in ''Murphy v Brentwood''.<ref>Murphy Respondent v Brentwood District Council Appellants [1990] 3 W.L.R. 414 p. 478</ref><ref>H. G. Beale, W. D. Bishop, [[Michael Furmston|Michael Philip Furmston]], Contract, p34</ref>
==Key cases==
*''[[Donoghue v Stevenson]]''
*''[[Anns v Merton London Borough Council]]''
*''[[Caparo Industries plc v Dickman]]''
*''[[Murphy v Brentwood District Council]]''
*''[[Hedley Byrne & Co Ltd v Heller & Partners Ltd]]''
*''[[Smith v Eric S Bush]]''
*''[[White v Jones]]''
*''[[Henderson v Merrett Syndicates Ltd]]''
*''[[Spartan Steel & Alloys Ltd v Martin & Co (Contractors) Ltd]]''
*''[[Junior Books v Veitchi]]''
*''[[D & F Estates Ltd v Church Commissioners for England]]''
*''[[Deloitte & Touche v Livent Inc (Receiver of)]]'' (Canadian case)
==References==
{{reflist|2}}
==Bibliography==
*{{cite journal | title=Economic loss in tort | author=Bishop, W. | journal=Oxford Journal of Legal Studies | volume=2 | year=1982 | pages=1–29 | doi=10.1093/ojls/2.1.1 }}
*{{cite journal | author=Giliker, P. | year=2005 | title=Revisiting pure economic loss: lessons to be learnt from the Supreme Court of Canada? | journal=Legal Studies | volume=25 | pages=49–71 | doi=10.1111/j.1748-121X.2005.tb00270.x | s2cid=144517741 }}
*{{cite book | pages=''pp'' 339–423 |author1=Lunney, M.  |author2=Oliphant, K.  |name-list-style=amp | title=Tort Law: Text and Materials | edition=2nd | publisher=Oxford University Press | location=Oxford | isbn=978-0-19-926055-3 |year=2003  }}
*{{cite journal | author=Stapleton, J. | title=Duty of care and economic loss: a wider agenda | journal=Law Quarterly Review | year=1991 | volume=107 | pages=249 }}
*{{cite journal | author=Stapleton, J. | title=Pure economic loss: lessons from case-law-focused 'middle theory' | year=2002 | journal=UCLA Law Review | volume=50 | pages=531 }}
*{{cite book | editor1-last=van Gerven|editor1-first=Walter |editor2-last=Lever|editor2-first=Jeremy|editor3-last=Larouche|editor3-first=Pierre | title=Cases, Materials and Text on National, Supranational and International Tort Law | year=2001 | location=Oxford | publisher=Hart Publishing | isbn=978-1841131399 | url-access=registration | url=https://archive.org/details/commonlawofeurop0000gerv }}
*Weinrib, E. J. (2005) "The disintegration of duty", in Madden, M. S. ''Exploring Tort Law'', London: Cambridge University Press, ''pp''143-272 {{ISBN|0-521-85136-X}}
*{{cite book | pages=''pp'' 339–423 |author1=Lunney, M.  |author2=Oliphant, K.  |name-list-style=amp | title=Tort Law: Text and Materials | edition=2nd | publisher=Oxford University Press | location=Oxford | isbn=978-0-19-926055-3 |year=2003  }}
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{{English law}}
[[Category:Judicial remedies]]
[[Category:Law and economics]]
[[Category:English tort law]]