Economic loss is a term of Tort which 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. There is a fundamental distinction between pure economic loss and consequential economic loss, as pure economic loss occurs independent of any physical damage to the person or property of the victim. It has also been suggested for it to be called "commercial loss" as injuries to person or property could be regarded as "economic".
Examples of pure economic loss include the following:Loss of income suffered by a family whose principal earner dies in an accident. The physical injury is caused to the deceased, not the family. Loss of market value of a property owing to the inadequate specifications of foundations by an architect. Loss of production suffered by an enterprise whose electricity supply is interrupted by a contractor excavating a public utility.
The latter case is exemplified by the English case of Spartan Steel and Alloys Ltd v Martin & Co Ltd. Similar losses are also restricted in German law, though not in French law beyond the normal requirements that a claimant's asserted loss must be certain and directly caused.