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In the past courts have been reluctant to compensate for pure economic loss, however recognition that loss is usually financial when bad advise is given has lead to a major change in the law of negligence.
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Christopher Parker English Legal System Section B In the past courts have been reluctant to compensate for pure economic loss, however recognition that loss is usually financial when bad advise is given has lead to a major change in the law of negligence. The possibility of extending the duty of care to protect pure financial interests was raised in the case of Hedley Byrne & Co Ltd v Heller &Partners (1964). This was a case were an advertising agency became doubtful about the financial status of one of their clients. They made enquiries of the defendants bankers. The bank replied first orally and then in writing that the company was financially sound. The advertising agency relied on this advice and suffered financial loss when the company went into liquidation. The 2 key factors that were laid down in this case were a special relationship and a reasonable reliance on the statement. Although...
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