Liability in Tort for Pure Economic Loss

Abstract

Abstract In some legal systems, the victim of a tort cannot recover for ‘ pure economic loss’. If the defendant had harmed his person or property or some other legally protected right, he can recover for the economic loss consequent on the injury. Otherwise, in principle, he cannot. This rule has been adopted in some jurisdictions such as Germany, England and the United States and not in others such as France, Italy, and the Netherlands. Nevertheless, exceptions in special cases have been made by courts both in the jurisdictions that have adopted and in those which have rejected the rule. The first part of this chapter will examine why the rule was adopted in jurisdictions such as Germany, England and the United States. AB we will see, it was a creation of the 19th and early 20th centuries. Before that time, recovery for what we call economic loss was permitted, and the late scholastics of the 16th and early 17th centuries developed sophisticated reasons why it should be. The rule excluding recovery for economic loss was adopted for reasons which commended themselves to the 19th century conceptualists. Now that concepcualism has been discredited, these reasons have little appeal. The rule against the exclusion of economic loss survives largely because during the concepcualist era it became entrenched in the German Civil Code and the Anglo-American case law.