3. Acts or omissions that cause purely economic harm.
Example: X is a professional carrier of industrial chemicals. X drives a truck to B's factory to deliver a consignment of liquid chlorine. When connecting the pipes from his truck to B's chlorine tank, X carelessly connects an outlet pipe to the wrong valve. This causes an alarm to go off and B's employees close down their operations and evacuate the building. Although no equipment or goods are damaged, B's factory loses two hours of production time, causing lost profits of $30,000.
Comment: X's act of connecting the pipes wrongly causes purely economic harm to C. There is no physical harm to any equipment, goods or persons, but X's act causes a loss of profits.
Tort law distinguishes between physical harm and harm that is purely economic because the potential for negligently causing purely economic harm is much wider than the potential for causing physical harm. By recognising liability in Negligence for purely economic harm, the law is opening the door to a great many potential claims. While this is desirable from the point of view of the plaintiffs, it has serious consequences for the courts, which would have to deal with a large number of cases. It also has consequences for society because individuals will want to insure against their potential liability and, in this way, the costs are eventually passed on to the general community. Accordingly, when harm is purely economic, special rules are applied to limit the extent of liability.
For example, a plaintiff is more likely to succeed in a claim for damages if they are one of a finite or identifiable group of persons likely to be harmed; and if they were unable to protect themselves from the harm caused by the defendant's acts; and if the defendant was aware of this vulnerability and the extent of the harm and the degree of risk involved.