Property Damage and Economic Loss: Should Claims by Property Owners Themselves Be Limited?

Abstract

This article takes a fresh look at the ‘economic loss rule’ in torts concerning damage or destruction of property: that is, the rule that while the owner of the damaged property can claim for all consequential losses subject only to remoteness limitations, claims by others for losses they suffer as a result of the damage are severely limited. The problems of anomaly and arbitrariness caused by the rule are well documented. The argument put forward here, however, is that these problems arise not so much because the non-owner has too few rights, but rather because the owner has too many. My conclusion is that the unquestioned right of the owner to claim for consequential losses needs to be substantially constricted, and that all claims for consequential loss resulting from property damage should be subject to the same searching ‘duty of care’ analysis, whatever the status of the claimant may be.