In law, economic loss refers to financial loss and damage suffered by a person such as can only be seen in balance sheets rather than physical injury to the person or destruction of property. Law is a system of rules enforced through a set of Institutions used as an instrument to underpin civil obedience politics economics and society In Financial accounting, a balance sheet or statement of financial position is a summary of a person's or organization's balances Economic loss can be:
- Consequential economic loss, arising from physical damage or injury, such as loss of earnings following an accident; or
- Pure economic loss, from other circumstances.
Recovery at law for pure economic loss is retricted under some circumstances in some jurisdictions, in particular in tort in common law jurisdictions, for fear that it is potentially unlimited and could represent a "crushing liability" against which parties would find it impossible to insure. In Law, jurisdiction (from the Latin ius iuris meaning "law" and dicere meaning "to speak" is the practical Authority Tort law is the name given to a body of law that creates and provides remedies for civil wrongs that do not arise out of Contractual duties Common law refers to law and the corresponding legal system developed through decisions of courts and similar tribunals rather than through legislative statutes or executive Insurance, in Law and Economics, is a form of Risk management primarily used to hedge against the Risk of a contingent loss [1][2] U.S. judge Benjamin N. Cardozo described it as, "liability in an indeterminate amount, for an indeterminate time, to an indeterminate class". The United States of America —commonly referred to as the A judge, or justice, is an Official who presides over a Court of law Benjamin Nathan Cardozo ( May 24, 1870 &ndash July 9, 1938) was a well-known American Lawyer and Jurist, remembered [3]
Examples of pure economic loss include:
- Loss of income suffered by a family whose principal earner dies in an accident. The physical injury is caused to the deceased, not the family. [4]
- Loss of market value of a property owing to the inadequate specifications of foundations by an architect. An architect is a licensed individual who leads a design team in the Planning and Design of buildings and participates in oversight of Building Construction [5][6][7]
- Loss of production suffered by an enterprise whose electricity supply is interrupted by a contractor excavating a public utility.
The latter case is exemplified by the English case of Spartan Steel and Alloys Ltd v. Martin & Co. Ltd[8] Similar losses are also restricted in German law[9] though not in French law. Spartan Steel and Alloys Ltd v Martin & Co Ltd The modern German legal system is a system of Law which is grounded on the principles laid out by the Basic Law for the Federal Republic of Germany, though many of In academic terms French law can be divided into two main categories private law (" droit privé " and public law (" droit public " [10]
By jurisdiction
- England and Wales
- . Pure economic loss in English law, arising from Negligence has traditionally been limited . .
References
- ^ Canadian National Railway Co. v. Norsk Pacific Steamship Co. [1992] 1 SCR 1021 (Canada), per McLachlan J
- ^ Bishop (1982)
- ^ Ultramares v. Touche 174 N. E 441, 444 (N. Y. 1931) (USA)
- ^ Baker v. Bolton (1808) 1 Camp 493 (England and Wales)
- ^ Murphy v. Brentwood District Council [1991] 1 AC 398 (England and Wales)
- ^ Sutherland Shire Council v. Heyman (1985) 60 ALR 1, at 60-61 (Australia)
- ^ Winnipeg Condominium Corporation No. 36 v. Bird Construction Co. [1995] 1 SCR 85 (Canada)
- ^ [1973] QB 27
- ^ van Gerven (2001) pp187-188
- ^ van Gerven (2001) pp198-199
Bibliography
- Bishop, W. (1982). "Economic loss in tort". Oxford Journal of Legal Studies 2: 1–29. doi:. A digital object identifier ( DOI) is a permanent identifier given to an Electronic document.
- Giliker, P. (2005). "Revisiting pure economic loss: lessons to be learnt from the Supreme Court of Canada?". Legal Studies 25: 49–71. doi:. A digital object identifier ( DOI) is a permanent identifier given to an Electronic document.
- Lunney, M. & Oliphant, K. . Tort Law: Text and Materials, 2nd ed. , Oxford: Oxford University Press, pp 339-423. ISBN 0-19-926055-9.
- Stapleton, J. (1991). "Duty of care and economic loss: a wider agenda". Law Quarterly Review 107: 249.
- — (2002). "Pure economic loss: lessons from case-law-focused 'middle theory'". UCLA Law Review 50: 531.
- van Gerven, W. et al. (eds) (2001). Cases, Materials and Text on National, Supranational and International Tort Law. Oxford: Hart Publishing. ISBN 1841131393.
- Weinrib, E. J. (2005) "The disintegration of duty", in Madden, M. S. Exploring Tort Law, London: Cambridge University Press, pp143-272 ISBN 052185136X
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