Home > Commercial Law > Economic Loss
Email Page to a Colleague
(* Denotes required field)
* Colleague’s email address
* Your email address
* Subject
The selected product information will be included in the email.
The email addresses you provide will not be used for any other purpose. You can view a detailed privacy statement here.
Your email has been sent.

Economic Loss

Economic Loss
3rd Edition, 2 Volumes
Practice Area:  Commercial Law, Tort
ISBN:  9781847030290
Published by:  Sweet & Maxwell
Publication Date:  24 Jul 2013
Subscription Information:  Non-Subscribable Product
Format:  Hardback
Enter a promotion code if you have one. Note: discount applied at Checkout Review Section
Promotion code:


Set up a standing order and save

Economic Loss, 3rd Edition:

With a foreword by Lord Phillips of Worth Matravers

• Deals with situations in which one person's negligent act or omission causes another person to suffer a loss which is not to his person or his property, and where the relationship between them is usually non-contractual

• Sets out and comments on the principles applied by the courts in pure economic loss cases

• Covers general themes and alternative approaches before dealing with the broad categories of situations in which questions concerning pure economic loss and duties of care in tort arise

• Discusses and analyses virtually all of the significant reported cases on this topic in England and the Commonwealth

• Examines the principles applicable to the imposition of, or the refusal to impose, duties of care where the claimant’s loss/injury is to his person or to his property; particularly in the field of product liability and in relation to the acts or omissions of statutory authorities

• Looks at the complex problem of the effect of the existence of a contract on the outcome of a pure economic loss duty of care claim in tort

• Presents General Principles in Volume One and Specific Applications in Volume Two

• Deals with very interesting cases, such as: a decomposing snail in a bottle of ginger beer, a night-watchman whose tea was laced with arsenic, lobsters that died in a tank before Christmas, a judge who said that there is no difference between a rodent and a gastropod, a typewriter factory whose keys were solidified, a Pentium III “ultimate media machine” which was anything but, one and a half dead flies in an unopened dispenser of purified drinking water, an advertising agency whose client failed to pay ‘as advertised’, a ship that sank after it was certified ‘good to go’, a tavern that lost business because a boat crashed into a bridge, two dead mice in two bottles of ginger beer, a gambler who was banned from buying too many lottery tickets, a trailer which became detached from a farmer’s Land Rover because the design of the coupler was deficient – was the manufacturer of the coupler liable for the dealer/retailer’s pure economic loss?, a garbage dump which could not burn the waste, a hotel which had to shut its cocktail bar, some bottles of a Bacardi mix which were not ‘a breeze’, a dredging operation that was too silty, a compulsive gambler who went to the dogs, an asbestos worker whose pleural plaques were not actionable, an auctioneer who was out-bid by foot and mouth disease, a potato farmer who was devastated by bacterial wilt, a railway company whose parapet walls were demolished, a lorry that collided with a fire hydrant, a building-owner who was out-negotiated by the Government, a set of accounts which had been certified as balanced but weren’t, a truck-driver who overshot a driveway, a soldier who shot his girlfriend’s lover, a house inspector who said “no responsibility” and the Lords who said ‘yes responsibility’, a home decorator who left the front unlocked when he stepped out to buy some wallpaper – did he cause the homeowner’s loss in the ensuing burglary?, a soldier who choked on his own vomit, some Borstal Boys who trashed some yachts, lots of houses with shaky foundations, a couple who lost $30m to a fraudster and almost got their bank to pay for it, an abattoir whose dividing wall was not high enough, an asset-freezing Order that didn’t, a factory-owner whose diesel storage tank’s tap did not have a lock, a video shop manager who was beaten up in the car park, a remand prisoner who died after a policeman left the wicket hatch open, four Kuwaiti commercial aircraft which were destroyed by Coalition aerial bombing in Iraq, a very honest patient with cauda equina syndrome, an asbestos worker who worked for several employers but could not say which of them caused his mesothelioma, a non-Hodgkin's lymphoma patient whose negligent doctor got off Scot-free, a wedding guest who died after eating ras malai that contained eggs and a swimmer who drowned in a pond that was contaminated with Weils disease.

What's New?

There are more than 350 new cases and more than 1,600 additional pages than in the second edition – total text page extent: 2,734 (plus 146 prelim/tables pages).  The scope of this (third) edition is broader than the second edition.  In addition to considering the duty of care question in relation to pure economic loss and economic loss that is not pure economic loss (i.e., consequential economic loss), this edition also deals with the analytical framework for determining whether a duty of care in the tort of negligence is appropriate in cases where the plaintiff’s loss/injury is to his person or to his property.

There are new and/or expanded sections dealing with topics like –

• Causation
• Remoteness of loss
• Foreseeability
• Proximity
• The scope of a duty of care
• The composite approach
• Assumption of responsibility
• The Hedley Byrne principle
• The current test
• Reflective loss
• The relaxation of the relational pure economic loss exclusionary rule
• The rule in The Albazero
• The Panatown broad basis of liability
• Public authority liability
• Concurrent liability in the context of a construction contract

In addition, there is expanded coverage of the pure economic loss position in Australia, Canada and New Zealand and, to a lesser extent, in the USA.

These topics are dealt with directly. The question of whether the defendant breached his duty of care by acting (or omitting to act) below the standard of care required of him in the circumstances is dealt with indirectly. Essentially, therefore, this is a book about the common law tort of negligence with special reference to cases of pure economic loss. Here you will find answers to such conundra as:-

Once the case is identified as falling within the Hedley Byrne principle, there should be no need to embark upon any further enquiry whether it is "fair, just and reasonable" to impose liability for economic loss. (Lord Goff in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145)

I do not accept the submission that, once a Hedley Byrne situation is identified, the answer has to be in the claimant's favour. (Sedley LJ in Dean v Allin & Watts [2001] 2 Lloyd's Rep. 249)

Whether a duty can exist and whether a duty does exist are different kinds of questions, and it seems to me that the law gives different kinds of answers to them. (Lord Clyde in Phelps v Hillingdon London Borough Council [2001] 2 AC 619)

Lack of causation is often used as an explanation as to why the scope of duty is limited, while the converse is not true. (Evans-Lombe J in Barings Plc (In Liquidation) & Anr v Coopers & Lybrand (No.4) [2002] 2 BCLC 364)

It seems to me problematical, with respect, to try to explain remoteness in terms of foreseeability. If anything, it is foreseeability which has to be explained in terms of remoteness. (Sedley LJ in Spencer v Wincanton Holdings Ltd [2010] PIQR P8)

"Unreasonable" is a


Volume One – General Principles

Chapter 1 - Introduction
Context and Scope
Definition of Pure Economic Loss
The Categorisation Approach
Rationale for Different Treatment
Contrary Views

Chapter 2 - The Elements of Liability
Reflective Loss
Justice and reasonableness

Chapter 3 - Alternative Approaches
General Formulations
The two-stage Anns test
The threefold Caparo test
The Incremental Approach
Assumption of Responsibility
The Current Position
Overseas Jurisdictions

Chapter 4 – Consequential Economic Loss and Accidental Direct Pure Economic Loss
The Historical Context
Consequential Loss
Pure Economic Loss
Policy Considerations
Dissentient Voices
Alternative Theories
Bailee in Possession

Chapter 5 - Relational Pure Economic Loss
The Exclusionary Rule
Applications of the Exclusionary Rule
The Established Exceptions
Rationale of the Exclusionary Rule
The rule in The Albazero/Panatown
Alternative Theories
Relevant Cases

Volume Two – Specific Applications

Chapter 6 - Product liability: Physical injury and Property Damage
Importance of Donoghue v Stevenson
Intermediate Inspection
Wider Application of the ‘Neighbour Principle’
The Consumer Protection Act 1987
Defective Buildings

Chapter 7 - Product Liability: Pure Economic loss
‘An Impossible Distinction’
The Current Law
A Special Relationship of Proximity’
The Complex Structures Theory
Damage to Other Property
The Defective Premises Act 1972
Concurrent Contractual Duty
Emerging Areas of the Law
Critical Comment on the Current Law
Transmissible Warranties of Quality
The Linden Gardens Solution
Other Jurisdictions
Relevant Cases

Chapter 8 - Nonfeasance
Different Considerations
Statutory Authorities
Breach of Statutory Duty Simpliciter
Dicta in Cases
Common Law Duty of Care
Lord Hoffmann’s Caveat   No Longer Valid
The Policy - Operational Dichotomy
General Reliance
The Statutory Framework
Illustrations from Cases
The Public Health Act
The Building Act
Other Relationships
The Individual Groupings
Overseas Cases

Chapter 9 - Negligent Misstatements and Services
Historical Obstacles
Other Conceptual Difficulties
Characteristics of Words
Indeterminate Liability: Ultramares v Touche
The Importance of Hedley Byrne
Pure Economic Loss
Assumption of Responsibility
Other Formulations
Illustrations from Cases
The Misrepresentation Act
Overseas Cases

Chapter 10 - The Contractual Connection
Categories of Cases
Contract between plaintiff and third party
Agents, Employees and Directors
Plaintiff’s Missed Contractual Opportunity
Caveat Emptor
Contract between Defendant and Third Party
Exemption Clauses
The Unfair Contract Terms Act
Concurrent Liability


''Robby Bernstein’s groundbreaking work on economic loss has long been an essential book for lawyers working in this area. With its clear analysis and full comparative coverage, it always has something useful to say on the difficult legal issues which arise in this area. It is very good news indeed that the author has found time in his busy professional practice to write the third edition. This will be warmly welcomed by practitioners and judges throughout the common law world.''
Hugh Tomlinson QC

"I was extremely pleased to learn that the third edition of this work is imminent.  As all practitioners are aware, giving advice to clients and contesting cases in which issues arise as to the recovery of damages for economic loss in negligence are fraught with potential pitfalls. In the course of my practice, I have turned on many occasions to the second edition of this work. On each occasion, I was grateful to have available such a well-researched, erudite, informative and easily-accessed source for research."
Gerald Simpson QC

“As a construction law practitioner, claims in negligence for pure economic loss regularly arise. The law is complicated, and navigating the thicket is no less difficult now than in the past. The first and second editions of this work have made that task much easier and have been constant and indispensable companions in my practice. The broad division of the chapters into the different categories of case along with clear, detailed and concise analysis and commentary of the case law across all common law jurisdictions is second to none.  I eagerly await the arrival of the third edition.”
Andrew Archer, Barrister, Australia

''This is a substantial work that subjects to detailed analysis the whole of the law of negligence....I had some difficulty in preparing to write this foreword because I was constantly enticed by the very detailed analysis and discussion of topics that I find fascinating...If the reader of this foreword has only borrowed a copy of the 3rd Edition of Economic Loss, I suspect that, by the time he has delved into its contents, he will wish to add one to his personal library. I certainly look forward to adding one to mine.''
Lord Phillips of Worth Matravers in his foreword to the 3rd Edition of Economic Loss

back to top
Must Haves