Law of Torts II – economic loss (lecture 10)

Law of Torts II – economic loss (lecture 10) -...

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Law of Torts II – Economic Loss (Lecture 10) Where someone has suffered pure economic loss, there was no cause of action as their loss was not recognized. Pure Economic loss – Where someone can recover subject to certain criteria within the elements of duty of care: Negligent misstatements – Where a false statement causes someone to lose money or suffer harm economically. Relational losses – Where an action causes someone to lose money or suffer harm economically. Negligence: Establish all of the elements. Is a duty of care owed in a case of economic loss? o Once duty is established, the other elements are dealt with briefly. In every economic loss case, must go through curtain features. Breach of that duty of care to what a reasonable person would act. Injury caused by the D Establishing negligence ALL the elements must be established to prove negligence. Consider defences so the D can have their liability reduced. Each of these elements have their own components to establish whether each element has been established. Don’t use proximity and Lord Atkin’s neighbour principle too much. Use salient features approach in relation to duty. Salient features approach. Concentrate on the economic harm that the P has suffered in relation to reasonable foreseeability. Reasonable foreseeability is usually the first thing to consider, but it’s not enough on its own. Proximity is also followed, but is also not enough (not even the test for DOC). Looking at relationship factors that may or may not be relevant, depending on the circumstances. o Salient features (relationship factors) such as: Knowledge of risk Assumption of responsibility D’s control over the situation
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Vulnerability Reliance No opportunity for immediate examination Autonomy of D too constrained if find a duty Lead to defensive practices Lead to diversion of resources How would the coherence of the law be effected? Determinacy of class Physical closeness (similar to proximity) Policy considerations – Are there any legal or economic consequences say that a DOC should not be imposed. REFER TO NEGLIGENT OVERVIEW FOR SALIENT FEATURES Courts reluctant to impose a duty Reasons were that: o The fear of imposing indeterminate liability – Expressed that if negligence existed in economic loss, a small slip can bring up a case as financial loss can have flow on effects, so where does it stop?? (Ripple effect, creating indeterminate liability. Similar to floodgate problems). This caused anyone who had not suffered physical damage unable to claim damages. o The fear of overriding existing doctrines of the law – With conflicting principles of the law, the court is reluctant to create more rules to compete with existing principles. Creating a new area under torts by bring up a conflict of principles. o
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This note was uploaded on 09/27/2011 for the course FINANCE 1001 taught by Professor Profassorted during the Three '11 term at University of Adelaide.

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Law of Torts II – economic loss (lecture 10) -...

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