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The Economic Loss Rule Applies to Professional Malpractice Claims Too

Virginia law continues to apply a strict division between contract claims and tort claims.  This rule holds true in the context of professional malpractice claims as well.  Many states apply legal rules where professional malpractice claims arise from negligence or both negligence and contract.  This is not the case - from 1976 forward, the Supreme Court of Virginia stated in Oleyar v. Kerr that a claim for professional malpractice, while sounding in tort, was actually a claim for breach of contract with a contract statute of limitations.

The nature of professional services does present a somewhat different posture for the economic loss rule than simple contracts cases.  A licensed professional is regulated by the Commonwealth and required to meet express professional services prior to licensure.  Many of the statutes and regulations that govern professionals expressly provide that in addition to duties assumed pursuant to contract, the law imposes duties towards the safety of the general public on the licensed professional.

Despite these license implications, Virginia again applies the economic loss rule in the context of professional services.  In Gerald M. Moore & Son, Inc. v. Drewry, the Supreme Court of Virginia considered a case where the plaintiff had a contract with an engineering corporation.  In its claim for economic losses, the plaintiff sued both the engineering corporation and the individual engineer for negligence.  The Supreme Court of Virginia ruled that in the absence of privity, a party could not be held liable for damages caused by negligent performance of a contract and that the same rule applies to professional engineers.

See our previous economic loss rule posts.

  • Timothy R. Hughes

    Timothy Hughes is the managing shareholder of Bean, Kinney & Korman. In that role, Tim is charged with managing the strategy, talent, and finances of the firm.

    Tim’s practice started in litigation and alternative dispute ...