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The 'bright line' exlusionary rule in pure economic loss.

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  • 17-11-2010 1:32am
    #1
    jillington
    Closed Accounts Posts: 15 ✭


    Hi, just a bit confused about the rules courts have put in place for dealing with claims of pure economic loss. From my reading of the subject, I see that in an attempt to stop the floodgates of claims for pure economic loss coming through the courts, they have retreated behind 'bright line' rules. I also keep coming across the term 'exclusionary rule' in texts and am wondering is this an actual clearly defined rule which these courts adhere to?

    In other words is there such thing as a recognized rule called the 'bright line rule' or the 'exclusionary rule' that courts adhere to when confronted with claims for pure economic loss through negligence?

    Sorry, hope this made some sense, it really confuses me.

    Thanks


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    #2
    Tom Young
    Legal Moderators, Society & Culture Moderators Posts: 4,338 Mod ✭✭✭✭Tom Young


    Spartan Steel & Alloys Ltd v Martin & Co (Contractors) Ltd [1973] 1 QB 27.

    Principle: No liability for Pure Economic Loss which flows directly from a negligent act. Defendants will be liable for Economic Loss and negligently caused physical harm. Economic Loss will be as a direct consequence of that negligent act, nothing more.


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    #3
    jillington
    Closed Accounts Posts: 15 ✭jillington


    Tom Young wrote: »
    Spartan Steel & Alloys Ltd v Martin & Co (Contractors) Ltd [1973] 1 QB 27.

    Principle: No liability for Pure Economic Loss which flows directly from a negligent act. Defendants will be liable for Economic Loss and negligently caused physical harm. Economic Loss will be as a direct consequence of that negligent act, nothing more.


    So is this a seminal case in that it sets out these exclusionary rules as you have explained above?


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    #4
    jillington
    Closed Accounts Posts: 15 ✭jillington


    Does the above case refer to consequential economic loss and not 'pure' economic loss as pure economic loss involves only damages that occur that are NOT physical (personal injury or damage to property)? So in the above case it was held that damages were only recoverable from loss connected with the physical damage done.


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