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Copyright (c) 2009 South Carolina Law Review
South Carolina Law Review

Article: The Problem with Pure Economic Loss+

* This Article was peer-reviewed, prior to selection and publication, as part of the South Carolina Law Review's Peer Review Pilot Program. For more information on the peer review program, see John P. Zimmer and Jason P. Luther, Peer Review As an Aid to Article Selection in Student-Edited Legal Journals, 60 S.C. L. REV. 959 (2009).


South Carolina Law Review

60 S.C. L. Rev. 823


Peter Benson*


I. Introduction

For well over a century, it has been a settled feature of American and English tort law that in a variety of situations there is no recovery in negligence for pure economic loss, that is, for economic loss unrelated to injury to the person or the property of the plaintiff. 1 This is true even if the loss is reasonably avoidable and perfectly foreseeable according to ordinary tort standards. I want to investigate whether this legal position is sound and how it might be accounted for.

For purposes of this Article, I shall focus on the kind of nonactionable pure economic loss that, from the start, has been a relatively fixed point in thinking about this issue in all its shapes and forms. I am referring to what is now often called "relational economic loss." 2 Here, a defendant carelessly damages or otherwise interferes with something or some facility - for example, a bridge - which the plaintiff is using but which the plaintiff neither owns nor possesses. The plaintiff may be entitled to use the bridge under a contract with the third-party owner or may simply be free to use it as a member of the public. The defendant's carelessness interrupts the plaintiff's use of the bridge, making it necessary for the plaintiff to find alternative facilities at a greater cost. The increased cost constitutes plaintiff's "relational" financial loss because it results from damage done to something which the plaintiff neither ...
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