AN ECONOMIC ANALYSIS OF ECONOMIC LOSS

One of the most arguable issues in tort law is analyzing the compensation of pure economic loss which is not the waste of property, benefit and personal damage and is not aroused from them. In relation to compensation of pure economic loss, legal systems do not have consensus. In this article we answer this question that depending on economic analysis, is pure economic loss recoverable? According to economic analysis of law, since pure economic loss leads to private loss not social loss, it should not be recoverable. In other words economical loss is just wealth transfer from a person to another one, therefore the action of a person causing impair cannot be lead to a damage to society, that is, this kind of damage is impossible to compensate. But it is not thoroughly correct. Applying different aspects in calculating social loss such as increased capacity and internalized expenses of liability with subrogation principle can indicate the scope of compensable pure economic loss in the view of economic analysis.