Pure Economic Loss: A Comparative Perspective

Abstract

This paper provides the reader with a comparative analysis of tort compensation for pure economic loss in the major European jurisdictions. The author concludes that none of the European jurisdictions have come up with convincing reasons for either fully including or excluding certain losses from tort law protection. Perhaps that is because the legal systems have relied upon simple solutions for a complex problem. For instance, the so-called exclusionary rule is a simple rule and therefore not a proper solution. However, an unconditional abolition of the exclusionary rule would also be too simple a solution. First, we should acknowledge that there is no single pure economic loss category, and that the exclusionary rule therefore has no exclusive foundation. Second, categorising seems to be the proper way to proceed. That working mode will enable us to single out the cases in which the floodgate fear is justified. Third, the introduction of several safety valves in any legal system would enable courts to relieve excessive pressure on the tort system. A general reductionary power for the courts might be helpful in overcoming the floodgate fear, as would, e.g., the use of causation and the victim's duty to mitigate damages.