This chapter deals with negligence that causes only economic loss. The basic rule is that a person may sue for economic loss which is consequent on physical loss which that person has suffered, but may not if they have only suffered economic loss by itself. There may be exceptions to this rule where there is sufficient proximity between the parties, and one element in this may be reliance by the one on the other. Though there is a general rule that no liability can arise in respect of ‘pure’ economic losses, there is also a broader exception that can arise when such loss happens as a result of a statement being made (rather than an act done), developed from the famous case of Hedley Byrne v Heller.

Economic loss caused by negligence may be redressed through a claim for physical loss, proximity, and reliance, but not for economic loss caused by a statement.

6. Special duty problems: economic loss

Key Takeaway: Economic loss caused by negligence may be redressed through a claim for physical loss, proximity, and reliance, but not for economic loss caused by a statement.