Liability of Experts for Pure Economic Losses, an Economic Analysis with Special Reference to German Cases

Abstract

Hans-Bernd Schaefer, University of Hamburg, Institute for Law and Economics Presentation at the Law and Economics Workshop UC Berkeley, 19 March 2001 This presentation is partly based on a paper coauthored with Roger Van den Berg and partly on another paper on expert liability which is so far only available in German language (to be published in Archiv fuer die civilistische Praxis (AcP)). Participants reading German can receive a copy of the second article. Two propositions are made. The first proposition is that a rule of obvious or gross negligence is a good rule for pure tort law cases when it comes to pure financial loss. The second proposition is that this solution is not recommendable, if the borderline between tort and contract is not clear, as often in cases of expert liability. Special emphasis is therefore laid on the liability of experts who often act not only for their contractual partner but also for others. Under which conditions should they be protected by the law of contract or by the law of torts?