Australia and Canada: The Role of Policy in Professional Liability

The term ‘policy’ as used by the judges is mainly concerned with whether third parties should be allowed to recover economic loss suffered by them as a result of professional negligence. The answers to the question of recovery of economic loss in negligence are not easy, as judges seem to be divided on this issue. Some judges feel that in some cases beyond physical damage and reliance, economic loss should be recoverable in negligence, while others fear indiscriminately opening the floodgate of liability.