Pure economic loss

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'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 stems more from policy 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 involved. Moreover, it is often difficult to assess just how much economic loss has really been suffered. The high-point for claimants for pure economic loss was probably the decision in Anns v Merton (1977), but since then the courts have gradually retreated to a more conservative position. The low-point of liability, in recent years, was probably Murphy v Brentwood DC (1990), in which the court flatly stated 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 Hedley Byrne v Heller (1963). More recently, though, cases such as White v Jones (1995) have been decided in a way that suggests the Hedley Byrne principle is wide enough to encompass situations in which the claimant and defendant are unknown to each other. This is seen as an indication that the retreat from Anns brought about by the decision in Murphy has not amounted to a complete return to pre-Anns conservatism.

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