Liability for Pure Economic Loss Due to Negligence

Pure economic loss refers to financial losses that are not accompanied by any physical injury or damage to property. Liability for such losses may arise in cases involving negligent acts or negligent misstatements.

Negligent acts refer to situations in which a person or organisation owes a duty of care to another person, but fails to meet that duty, causing economic loss to the other person. For example, a contractor who negligently constructs a building may be liable for the cost of repairs and any economic losses suffered by the building's owner.

Negligent misstatements refer to situations in which a person or organisation provides inaccurate or misleading information that causes economic loss to another person. For example, a financial advisor who provides incorrect investment advice may be liable for any financial losses suffered by their client as a result.

In order to establish liability for pure economic loss caused by negligent acts or negligent misstatements, the plaintiff must typically demonstrate that:

1. The defendant owed a duty of care to the plaintiff;
2. The defendant breached that duty by acting negligently or providing inaccurate information;
3. The plaintiff suffered economic loss as a result of the defendant's conduct;
4. The economic loss suffered by the plaintiff was foreseeable; and
5. There was a sufficient proximity between the plaintiff and the defendant.

The specific criteria for establishing liability may vary depending on the jurisdiction and the specific circumstances of the case. In some jurisdictions, liability for pure economic loss may be limited or barred altogether, particularly in cases involving negligent misstatements.