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Home > Law > Law glossary > Law glossary
Pure economic loss
Last modified: Thu Feb 23 16:37:37 2006
`Pure' economic loss is economic loss unaccompanied by damage or injury. The English
courts have always found pure economic loss problematic. Their tendency to reject
claims to recover pure economic loss probably stem more from policy, rather than logical,
considerations. The problem is that holding someone liable for pure economic loss may
lead to damages completely beyond the scale of the fault. Moreover, it is often difficult to
assess how much economic loss has really been suffered. The high-point for claimants for
pure economic loss was probably the decision in AnnsVMerton1977, but since then the courts
have gradually retreated to a more conservative position. The low-point of liability,
in recent years, is probably MurphyVBrentwoodDC1990, which flatly states that Anns
was wrongly decided. According to Murphy, pure economic loss is prima facie_ unrecoverable,
unless the relationship between the claimant and the defendant can be brought within
the principle of HedleyByrneVHeller1963. However, more recently still we have seen
cases such as WhiteVJones1995 which tends to suggest that the Hedley Byrne principle is
wide enough to encompass situations where the claimant and the defendant are unknown to
each other. It is not clear, at least to me, how these recent cases sit alongside Murphy.
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