ABSTRACT
This chapter is the first of two dealing with particular types of loss where the courts have imposed limits on the circumstances in which a duty of care may be owed: loss which is purely economic (as compared, for example, to damage to property); and pure psychiatric harm (as compared, for example, to physical injury). This chapter covers pure economic loss, which includes: damage to a defective product acquired by the claimant; damage to property which does not belong to the claimant; and financial loss which is not caused by damage to property (e.g., financial loss caused by a negligent statement). After outlining the general principle that pure economic loss is not recoverable in the tort of negligence (no duty of care is owed), the chapter examines the exception formed by the particular principles applicable in the case of pure economic loss caused by negligent statements (or services). It notes that, in this case, a duty of care may be owed where the parties had a special relationship involving an assumption of responsibility by the defendant and reasonable reliance by the claimant.
