negligent misstatement/economic loss

• Pure economic loss- financial loss which isn't caused by physical injury or damage.
• consequential economic loss- financial loss which arises directly from physical damage.
• What does the Spartan Steel case say?


  Cannot claim for pure economic loss, only consequential.
• Brief facts of Spartan Steel- electrical power cable was cut by the defendants workmen, led to loss of power and loss of profits.
• Why can't you claim for pure economic loss?


  opens the floodgates and it is hard to predict future losses.
• What does the Hedley Byrne case say?


  That there must be a special relationship between parties for a DOC to arise.
• What case set out the factors needed to prove a special relationship?


  Caparo V Dickman
• What are the 5 factors needed to prove special relationship?

  1. D must possess a a skill or expertise.
  2. C must rely on the advice.
  3. Advice is communicated directly to the claimant, not a third party.
  4. known user and purpose.
  5. No disclaimer.
• What did the Chaudry V Prabhakar case say?


  Advice can be given in a social setting.
• What is a disclaimer?


  a statement informing C that the company doesn't accept responsibility for the advice given.
• The remedy is compensatory damages.
• Negligent misstatement- When someone gives advice or makes a statement and the other suffers a loss because of it.