LIABILITY IN NEGLIGENCE FOR
ECONOMIC LOSS AND
PSYCHIATRIC INJURY REVIEWED
QUESTIONS AND THEIR VERIFIED
ANSWERS
what is economic loss?
financial loss
what is consequential loss?
This provides compensation for businesses which suffer
loss of earnings due to an unforeseen event.
example of consequential loss?
if a contractor fails to complete a construction project on
time, the client may suffer consequential losses in terms of
lost revenue from delayed operations
what is pure economic loss?
economic or financial loss which is not caused by personal
injury or damage to other property
--> this will cover any e.g. loss of profit suffered by a
business whilst it is unable to operate.
example of pure economic loss?
if a faulty product causes damage to a business'
reputation, resulting in a loss of customers and revenue,
that would be considered pure economic loss
what is a negligent misstatement
, Negligent statement of info inducing reliance by another
and resulting in him/her suffering loss.
When will a person have to establish a 'SPECIAL
RELATIONSHIP'?
when suffering from financial loss as a result of acting on a
negligent misstatement, they will have to establish a
'special rs' with the D who gave the advice to claim for
PEL
KEY CASE: Hedley Byrne & Co ltd v Heller
what dictates a 'special relationship' between C and D
according to Hedley Byrne case?
- the D who made the statement possesses some special
skill relating to that statement (Chaudhry v Prabhakar) &..
- Knows that it is likely that the C will rely on the statement
(Caparo v Dickman) &...
- The C does rely on it, thereby incurring financial loss &...
- It was reasonable for the C to so rely on it
- ALSO, the advice is communicated directly to C and not
by 3rd party or 3rd party means.
DISCLAIMER CANT BE DEFENSE
What does it mean loss caused by negligent acts?
refers to situations in which a person or organization owes
a DOC to another person but fails to meet that duty
causing economic loss to the other person
ECONOMIC LOSS AND
PSYCHIATRIC INJURY REVIEWED
QUESTIONS AND THEIR VERIFIED
ANSWERS
what is economic loss?
financial loss
what is consequential loss?
This provides compensation for businesses which suffer
loss of earnings due to an unforeseen event.
example of consequential loss?
if a contractor fails to complete a construction project on
time, the client may suffer consequential losses in terms of
lost revenue from delayed operations
what is pure economic loss?
economic or financial loss which is not caused by personal
injury or damage to other property
--> this will cover any e.g. loss of profit suffered by a
business whilst it is unable to operate.
example of pure economic loss?
if a faulty product causes damage to a business'
reputation, resulting in a loss of customers and revenue,
that would be considered pure economic loss
what is a negligent misstatement
, Negligent statement of info inducing reliance by another
and resulting in him/her suffering loss.
When will a person have to establish a 'SPECIAL
RELATIONSHIP'?
when suffering from financial loss as a result of acting on a
negligent misstatement, they will have to establish a
'special rs' with the D who gave the advice to claim for
PEL
KEY CASE: Hedley Byrne & Co ltd v Heller
what dictates a 'special relationship' between C and D
according to Hedley Byrne case?
- the D who made the statement possesses some special
skill relating to that statement (Chaudhry v Prabhakar) &..
- Knows that it is likely that the C will rely on the statement
(Caparo v Dickman) &...
- The C does rely on it, thereby incurring financial loss &...
- It was reasonable for the C to so rely on it
- ALSO, the advice is communicated directly to C and not
by 3rd party or 3rd party means.
DISCLAIMER CANT BE DEFENSE
What does it mean loss caused by negligent acts?
refers to situations in which a person or organization owes
a DOC to another person but fails to meet that duty
causing economic loss to the other person
