Sulaiman Abdussamad, ‘Unrestrained Liability for Pure Economic Loss in the United States and Spain: A Shared Concern’

Over the years, the problem of pure economic loss together with its presumptive non-recovery ‘bright line’ rule have continued to lead discussions on the boundaries of tort law, which is never closed. Perhaps nowhere else in the law of tort has there been such diversity of opinion than in the recoverability question of pure economic loss. Arguably, the most discussed and expanding rule in the realm of tort law today. This study, however, examines the notion of economic loss across two different systems, the tort laws of United States and Spain. It begins with how pure economic loss relates to contract. Why physical loss does enjoy more protection than economic loss? Why was there divergence of treatment for economic loss within and across systems? The courts’ reluctance to allow recovery not linked with physical loss or injury for the fear that such admission would open the door to mass litigation, which might very well overwhelm the courts. The mutual concerns of both common and civil law courts to keep liability exposure on check and the use of duty in case of common law and causation for civil law to achieve that. Attention is also given to the uncertainty regarding the prerequisite for compensation of economic loss and the lack of consistent framework in determining recoverability. The study concludes with an opinion on the ongoing debate over the propriety or otherwise of recovery expansion.

Abdussamad, Sulaiman, Unrestrained Liability for Pure Economic Loss in the United States and Spain: A Shared Concern (February 9, 2016).

First posted 2016-02-12 06:25:08

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