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Research Of Pure Economic Loss

Posted on:2012-11-07Degree:MasterType:Thesis
Country:ChinaCandidate:Y LiFull Text:PDF
GTID:2216330338459387Subject:Civil and Commercial Law
Abstract/Summary:PDF Full Text Request
Pure economic loss refers to financial loss and damage suffered by a person such as can be seen only on a balance sheet rather than as physical injury to the person or destruction of property. Fascination with the subject (which may at first glance appear dry and technical) has developed into a wealth of literature about this frontier notion. Pure economic loss is one of the most discussed topics of tort law scholarship. In recent years, with the gradual increase in the trial of the case practice, our legal theorists has showed great interest and concern on this issue.This paper focuses on whether pure economic loss should be compensated, the compensation range, the basis of claims and the problem in our relevant legislation. Legal and policy issues should be considered before made the compensation decision. The range of the compensation involve in economic analysis and the main areas of selective protection. As a matter of the basis of the claim, should the recovery of pure economic loss be the domain principally of the law of contract or the law of tort. How far can tort liability expand without imposing excessive burdens upon individual activity? How should the tort law and contract law of the twenty-first century approach this issue? In the relevant legislative analysis, the paper clarified the relation between the general term of civil law, tort law and the pure economic interest. Although the surface of general term's pattern is similar with the French legislation, in fact both of the logical starting point is contrary. Under the French model, a rule of recoverability is in principle and rejection of recovery is in exception. However, the logical starting point of China and France are different. Our logical starting point is similar to the German model—the principle of no compensation but compensate for the exception. To fit with this logical starting point, only in the general provisions do not protect purely economic interests, to realize the legal policy the principle of no compensation.This paper provides comparative evidence to pure economic loss. By comparison logical starting point, protective attitude, defense mechanism in Germany, France, US, Britain, we discovered countries can be divided in liberal, pragmatic and conservative regimes. Different counties have different attitudes towards this issue. How to approach pure economic loss show that the remedies are grounded on the different law tradition, history background and the legislation mechanisms of the respective countries.Beginning with the comparison between the pure economic loss and consequential economic loss, this paper analyzed the optimal economic model, William Bishop theory, Mario J.Rizzo theory, Harris & Veljanovski theory when making economic analysis towards pure economic loss. The judgment in varies countries focus mainly on whether the ruling is fair or not, paying little attention to the economic analysis of cases. Actually, any attempt is not practical in the establishment of a uniform analytical method and liability theory and there is not a single economic analysis theory could provide a complete and convincing answer. The judge will have to take into account the relationship between personal cost and social cost in future trials, considering the precaution cost, the diversification of risk by liability insurance, litigation cost and social efficiency in general. Therefore, the right and just decision of whether the loss should be compensated and the compensate range should be made in consideration of the relevant aspects of the very case and the goal of expectation.People in the social environment would hold the expectation that their own interest, pure economic interest included, be protected by the legal system to the largest extent. On the other hand, they would like to enjoy the freedom to the largest extent within the frame of law as well. It is not only the market-oriented economy required of the legal system, but the requirement of the free personality of the public. However, freedom and security do not always coordinate, but an irreconcilable extension would stretch between the two. The freedom and security cannot be compatible with each other to the extreme of both sides. The legal system has to set up a balanced point between freedom and security in different times and it is a mission not only arduous but dedicate as well. Specifically, as for the pure economic loss, the legislative department and judicial department should enlarge the protection range of the pure economic interest controllably with the tempo of the economic development and make possible that potential claims could flood in. The decision of recoverability of economic loss should be made under more fair and efficient economic analysis. In China, the analysis and discussion about pure economic loss is just at a starting stage, while relevant cases are sharply increasing. Therefore, this paper makes a profound analysis about the issue, with the hope that it will benefit the development of the law of China.
Keywords/Search Tags:Pure Economic Loss, Exclusionary Rule, Economic Analysis of Law, Contract Liability, Tortious Liability
PDF Full Text Request
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