Economic Loss and Negligent Misstatement

Abstract

The tort of negligence provides compensation for all sorts of loss that are financial in nature. If you were to be run over by a negligent car driver, your damages would represent not only your physical injuries (your pain and suffering, etc) but also the financial consequences of those injuries (‘consequential economic loss’). Thus you would be able to recover in respect of any medical costs incurred and any wages lost. However, when the courts are faced with loss that is purely economic in nature — that is, which does not stem from any physical damage to the plaintiff or her property — their approach is very different. Pure economic loss is, by and large, irrecoverable.