In Tort law, pure economic loss is never recoverable in an action for Essay

In Tort law, pure economic loss is never recoverable in an action for negligence - Essay Example However, the concept is evolving to cover other cases over the period of time. Pure economic loss In the case of pure economic loss, the loss strikes the victim’s wallet without any harm to the plaintiff’s person or property. According to Bussani & Palmer (2003, p. 4), there has never been a universally accepted definition of ‘pure economic loss’ and a number of legal systems neither recognize the legal category nor distinguish it as an autonomous form of damage. An act of negligence causing physical damage to a person may cause pure economic loss to another. It becomes non recoverable if the act is unintentional. The cause and effect relationship with reference to the breach of one’s duty and pure economic loss in relation to its impact on the complainant is very complicated in nature. Not only the gravity of the situation, but also the circumstance, varies from case to case. The factual causation is different in its scope from 'legal causation'. Ac cording to Cardozo, J., liability is â€Å"in an indeterminate amount for an indeterminate time to an indeterminate class†. ... Assuming that someone was directly injured then you have an issue about whether one can recover for his pure economic loss. Negligence in duty of care Individuals owe duty of care to strangers even when they are not related to them by way of any formal contracts. Any activity either performed individually or in group, if it results in harm to others, either physically, mentally or economically, according to the principles of justice, they are liable for their failure in exercising duty of care in their actions. Taking reasonable care in preventing harm to others or avoiding acts or omissions which one can reasonably foresee would likely to injure others, is the underlying point.   When a person is not responsible for an incident which resulted into injury to others, the person is not liable, and this principle was established in the case of Donoghue v Stevenson  [1932] AC 562   A causal relationship exists between negligence and the damages caused. The neighbourhood principle e stablished in Donoghue v Stevenson  [1932] AC 562  was expanded in scope in the later cases to cover various forms of duties and situations.   It was established in Anns v Merton London Borough Council  [1978] AC 728 known as Anns test states that: A sufficient relationship of proximity or neighbourhood exists between the alleged wrongdoer and the person who has suffered damage, such that carelessness on the part of the former is likely to cause damage to the latter. In Caparo Industries plc v Dickman  [1990] 2 AC 605, the threefold test, ‘reasonably foreseeable’, ‘proximity or neighbourhood’ and ‘fair, just and reasonable to impose liability’ was