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Torts B Summary Pure Economic Loss (Negligent Statements) Notes

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This is an extract of our Torts B Summary Pure Economic Loss (Negligent Statements) document, which we sell as part of our Torts Law Notes collection written by the top tier of Monash University students.

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Pure Economic Loss Cause by Negligent Statements - Particular Duty Scenario


The treatment of the duty of care in the context of misstatements is but an instance of the application of the principles governing the duty of care in negligence generally San Sebastian


Has the P suffered pure economic loss due to reliance on information or advice and was the advice a negligent misstatement?


Is the P an immediate or nonimmediate recipient?

Immediate Recipient: Is when there is a contractually equivalent relationship between the parties and the information was communicated directly to the P?

Was the economic loss reasonably foreseeable? (make a broad statement)


The risk must be 'likely to occur' or 'not unlikely to occur' and not 'Caterson v Commission of Railways


'not farfetched or fanciful' Sullivan v Moody

Is there a 'special relationship' between the parties? The parties must be in a 'special relationship' eg. equivalent to contract. THREE PART TEST: Hedley v Byrne

1. Did P rely on D to exercise reasonable care?

2. Was P's reliance reasonable? The person has to be so placed that others could reasonably rely upon his judgment. If it is unreasonable reliance, it is less likely that the D owes a duty of care to the P


Special skills: does D have or claim to have them?

o If the D has special skills it is more likely they owe a duty of care to the P

o It does not matter if the D was not in the business of giving advice of the kind provided

o Special skills may be relevant MLC v Evatt but not determinative Hill v Van Erp

o Question: was there a Voluntary undertaking by the D of responsibility for the statements giving rise to the claim in negligence? Hedley Byrne v Heller

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