540 m a u r o b u s s a n i a n d v e r n o n v a l e n t i n e p a l m e r

The place of pure economic loss within different possible frames of a tort law codification

The above simple remarks only hint at the web of relationships that affect our subject. The matter is far more complex. Even when all the above (and possibly other)6 boundary issues have been clearly settled, the recoverability of pure economic loss will still depend on other critical choices. First among these is the large political choice that needs to be made at a more general level about tort law.

Any choices made by the drafters and codifiers are indeed the surrogate political acts of the legislator (whether the latter’s approval of their work is one of default, rubber stamp or close consultation). Thus, any decision by the redactors to decrease, enlarge or simply maintain the existing unequal levels of protection for pure economic loss across Europe is first and foremost a political question that must be answered. For example, should Europe attempt to codify on the basis of the ‘limited common core’ that we have found to exist? Or would it be better to generalize from the greater protection for pure economic loss found in liberal regimes such as France? Or would it be best to reduce the level of protection to a lower common denominator to cover only intentionally inflicted loss or consequential economic loss? All questions as to the most appropriate way of stating the code’s tort principles, whether via a general clause or a list of absolute rights, initially depend upon setting a policy with respect to the compensation issue.

Certainly, the substantive decision necessarily has implications for the draft methodology to be adopted. For example, if the decision is to protect pure economic loss in general, rather than in highly specific privileged loss-type situations, then a general clause will be the legal instrument to implement it, rather than a formula of protected interests.7 Yet – as

6For example, our issue would certainly be affected, both theoretically and operationally, by any decision to allow or forbid the concurrence of tortious and contractual actions (see H. Beale, A. Hartkamp, H. Kötz and D. Tallon (eds.), Contract Law (2002), pp. 67 ff.). As mentioned (see above Part I, Chapter 5) the second alternative is better known as the French ‘règle du non-cumul’. This rule clearly has a particular bearing because, if the European Code embraces it, we would predict that some cases on pure economic loss would disappear from tort law only to reappear as contract law questions.

7Estathios Banakas points out that ‘[The protected interest device does] leave it to the courts to make the social policy as they go along, with regard to liability . . . judges can use this device to open or close categories of liability, and create privileged loss-types, as shown in the English and German practice’, S. Banakas, ‘Liability for Incorrect