De Mot, Jef --- "Pure Economic Loss" [2009] ELECD 293; in Faure, Michael (ed), "Tort Law and Economics" (Edward Elgar Publishing, 2009)

Book Title: Tort Law and Economics

Editor(s): Faure, Michael

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847206596

Section: Chapter 7

Section Title: Pure Economic Loss

Author(s): De Mot, Jef

Number of pages: 14

Extract:

7 Pure economic loss
Jef De Mot*


7.1 Introduction
Pure economic loss usually refers to foregone profits or earnings without
antecedent harm to plaintiff 's person or property. In contrast to con-
sequential (or parasitic) economic loss, that is, the financial loss that is
connected with (even the slightest) damage to the person or property of
the plaintiff, there is great variance across legal systems in the recover-
ability of pure economic loss in tort. In the United States, the economic
loss rule states that a plaintiff cannot recover for negligence that causes
pure economic loss (the `exclusionary rule'). In some cases, however,
courts ignore the rule and make their decisions based on an assessment
of the particular policy considerations of the case (Schwartz, 2003).
For Europe, a distinction can be made between liberal regimes (such as
Belgium, France, Greece, Italy and Spain), conservative regimes (such
as Austria, Finland, Germany, Portugal and Sweden) and pragmatic
regimes (such as England, the Netherlands and Scotland) (Bussani and
Palmer, 2003b). Liberal regimes are characterized by the absence of an in-
principle objection to allowing compensation for stand-alone economic
harm. On the contrary, in conservative regimes, pure economic loss does
not figure among the `absolute rights' which receive protection under tort
law. If a remedy is available, it is based on a specific tort provision or on
an expansive application of contract principles. In pragmatic regimes,
results are not driven by the dictates of a wide tort principle, nor by a
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