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October 19, 2006

ALI Council Draft on Economic Loss

The American Law Institute has released the Council draft of portions of the Restatement (Third) of Torts:  Economic Torts and Related Wrongs.  This draft portion of the Restatement concerns tort - including product liability - actions not involving injuries to persons or property.  The general economic loss rule (section 8) bars recovery for purely pecuniary loss in "negligence, strict liability, and products liability actions."  This general bar is subject to some exceptions such as for negligent misstatement but only when the plaintiff has justifiably relied upon the misstatement (section 9). Liability under section 9 is also limited to proximately-caused harms where the defendant had the ability to disclaim such losses and where "the claimed loss is not indeterminate" (section 10).

Perhaps the most notable portion of this draft, in light of the mixed reception that the courts have given to medical monitoring cost claims, is Section 21 which provides an action to recover certain "preventive expenses" such as medical monitoring costs or certain repair or removal costs so long as those costs would prevent serious bodily injury and the liability is "not indeterminate."

A (copyrighted) copy of the draft is available from the ALI:  www.ali.org.

JDP

October 19, 2006 | Permalink

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