The Frontier between Contractual and Tortious Liability in Europe: Insights from the Case of Compensation for Pure Economic Loss

Abstract

Recoverability of pure economic losses stands at the cutting edge of many crucial questions, such as: To what extent should tort rules be compatible with the market orientation of the legal system? How far can tort liability expand without imposing excessive burdens upon individual activity? As a matter of policy should the recovery of pure economic loss be the domain principally of the law of contract? The paper pursues the goal of sketching possible answers to these questions as far as European jurisdictions are concerned. Thus, it first outlines the factual situations where a pure economic loss is likely to occur. The paper then discusses the broad spectrum of differing approaches to this kind of damage in Europe, as well as the basic arguments that favor an exclusionary rule. The survey makes it possible to understand what is common and what is different across European countries on this issue, as well as to evaluate whether, and how legal rules about pure economic loss might be harmonized throughout Europe.