pure economic loss

This is a category of loss suffered by a claimant that is not consequential upon or stemming from physical damage to a person or physical property. Common categories of pure economic loss are wasted expenditure, loss of profit, profitability or loss of some other form of pecuniary gain.

There is a class of torts, called ‘economic torts’ that allow recovery of economic interests. However they do not allow recovery of pure economic loss, as liability stems from harm to some protectable interest in the hands of the claimant, such as procuring a breach of contractual rights, harm to a business, or some other actionable wrong.

Usage: The claimant was not able to recover their loss in negligence, as its loss was pure economic loss and not recoverable at law.

Related Words: strict liability; law of torts; tort of negligence.