ECONOMIC LOSSES

Economic Losses and the Court's Decisions

Table of Contents

Introduction1

Economic losses and the practical remedies1

Pecuniary loss3

Non pecuniary loss3

English legal system with regard to economic losses4

Liability for economic loss4

Lost Income5

Uniform Commercial Code (UCC)6

Recovering economic loss through contract law6

Cases7

Martin & Co (Contractors) Limited v Spartan Steel & Alloys Limited7

Junior Books Ltd v Veitchi Co Ltd8

Murphy v Brentwood District Council8

Hedley Byrne v Heller (1963)9

Conclusion10

References11

Economic Losses

Introduction

Economic loss may be defined as the loss suffered by a family or an individual as the consequence of the death of a person who was the primary bread and butter winner for the family. Other than death, this can also include a material damage to property resulting in economic loss or a severe injury to a person. The loss here is the total of funeral expenses, the expenses occurred in restoration of property which got damaged or the body injury that happened, the medical expense, and the legal expense. The essay answers the question that the courts, in dealing with economic loss cases, have concentrated on the cause of such losses rather than any overarching policy?

Economic losses and the practical remedies

Many of the economic losses arise in the context of professional activities. Indeed, the most prevalent cases are those which concern poorly performed services and misstatements by professionals. Legislatures from many jurisdictions have been keen to regulate professional and quasi-professional activities. This is apparent in legislative provisions that, for example, dictate the form in which company prospectuses may be issued and that set out detailed financial accounting rules. Courts have also become more and more willing to enter the regulatory field. One key feature that has facilitated tort intervention is the fact that much professional activity is planned activity. Standards can be set beforehand which are (at least theoretically) capable of guiding conduct. Tort rules also have the inherent flexibility of being applicable to the myriad ways in which sub-standard professional conduct can cause economic losses.

The common law systems were cautious in recognizing new duties of care, which permitted recovery of economic losses (Hedley 2011, pp. 89 - 111). The effect of narrowly-designed duties of care was to preclude recovery for pure economic losses in most cases. Claimants required to find their remedy (if possible) within the realm of either the intentional torts or in contract. The general trend in the common law has been towards a widening of duties, so that concepts of proximity and causation have assumed greater importance. This is indicative of a gradual convergence in Latin and common law approaches. Germanic systems continue to deny recovery for pure economic losses; although there are many “exceptions” to the exclusionary rule which diminish the real differences between those systems and others. Convergence has resulted in real gains, in knowledge about the problems of economic loss. The suggestion of the Canadian scholar Bruce Feldthusen, that economic loss problem, gets analyzed under headings which correspond to the different means by which economic losses arise, accepted in many ...