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Tort Law: Text and Materials

Tort Law: Text and Materials (6th edn)

Mark Lunney, Donal Nolan, and Ken Oliphant
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date: 13 April 2024

p. 3818. Negligence: Duty of Care—Economic Losslocked

p. 3818. Negligence: Duty of Care—Economic Losslocked

  • Mark Lunney, Mark LunneyProfessor of Law, University of New England in New South Wales
  • Donal NolanDonal NolanProfessor of Private Law. Francis Reynolds and Clarendon Fellow and Tutor at Worcester College, University of Oxford
  •  and Ken OliphantKen OliphantDirector of the Institute for European Tort Law, Austrian Academy of Sciences, Vienna


This chapter examines liability for economic loss in negligence. It discusses the basic exclusionary rule in respect of pure economic loss; defective product economic loss; the Hedley Byrne exception; the development of Hedley Byrne liability; Hedley Byrne and the three-stage Caparo test; and White v Jones. The final section of the chapter first considers an economic analysis of the liability rules in this area, and then introduces the debate between rights-based and policy-based critiques of the current law.

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