Pure Economic Loss: What Is It And When Does It Bar A Construction Deficiency Claim?

A construction deficiency claim is often based on the cost to repair the deficiency. The plaintiff is required to expend money to repair and seeks to recover those costs from the parties that negligently designed and constructed the building. However, monies expended to repair deficiencies are considered "pure economic losses" – that is, losses which arises only from the cost to repair the building itself, and not from an injury to a person or an injury to the building. The Supreme Court of Canada has recognized only a few categories of claims where a plaintiff may successfully recover "pure economic loss" for the negligent provision of a defective product or defective building. Two recent decisions of the British Columbia Supreme Court review these principles and provide further guidance on the types of claims that will and will not be permitted to succeed.