Economic Loss

Abstract

The tort of negligence provides compensation for all sorts of losses that are financial in nature. If you were to be run over by a negligent car driver, you would get damages not only for your physical injuries (your pain and suffering, etc.) but also for the financial consequences of those injuries. Hence 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. The courts have so restricted liability for pure economic loss that it is possible to state as a general rule that it is not recoverable in the tort of negligence.