AB Wessels, ‘Establishing Legal Certainty in Novel Pure Economic Loss Cases’

In a previous article, attention was given to the two major contesting views related to the criterion for wrongfulness in pure economic loss cases – the ‘traditional approach’ and the ‘new approach’. In this article, the focus shifts to a different issue: given that liability for pure economic loss clearly involves the application and balancing of policy considerations, what approach should courts adopt to ensure legal certainty, particularly when it deals with novel cases? In this regard, Brand JA proposed a method in Fourway Haulage SA Pty (Ltd) v SA National Roads Agency Ltd, which was subsequently applied in Country Cloud Trading CC v MEC, Department of Infrastructure Development and Masstores (Pty) Ltd v Pick ‘n Pay Retailers (Pty) Ltd. Is this approach desirable?

Before investigating that question, a brief overview will be given of the strategies adopted in Germany, France and certain common law jurisdictions regarding pure economic loss cases. Of course, comparative legal scholarship can enlarge the ‘supply of solutions’ when dealing with a specific problem in the South African law of delict and it is therefore worthwhile to consult the approaches in those jurisdictions. In addition, the overview also attempts to explain, in part, why South African courts often reference the development in common law jurisdictions when confronted with pure economic loss cases, while reliance on civilian jurisdictions such as Germany or France appear largely absent in this context. Lastly, as we will see below, the approach formulated in Fourway Haulage seems to be based on those that have been adopted in common law jurisdictions, at least insofar as the negligent causation of pure economic loss is concerned. This merits giving special attention to these jurisdictions.

AB Wessels, Establishing Legal Certainty in Novel Pure Economic Loss Cases, Tydskrif vir Hedendaagse Romeins-Hollandse Reg (Journal for Contemporary Roman-Dutch Law) 83, no 2 (August 2020): 318-341.

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