I should note that ALI has this (Draft) Restatement Third behind a pay wall, so I will repeat just so much of it as Paul Hellegers has in footnote 1 of his article.
Draft Restatement (Third) of Torts
Chapter 1 (Unintentional Infliction of Economic Loss), sections 1-6.
1. General Principles. (a) "[a]n actor has no general duty to avoid the unintentional infliction of economic loss on another."
2. Definition of Economic Loss.
3. Preclusion of Tort Liability Arising from Contract (Economic Loss Rule). "...[e]xcept as provided elsewhere in this Restatement, there is no liability in tort for economic loss caused by negligence in the performance or negotiation of a contract between the parties."
4. "[a] professional is subject to liability in tort for economic loss caused by negligent performance of an undertaking to serve a client."
5. Slightly modified version of Restatement (Second) of Torts Section 522, which provides: "One who, in the course of his business, profession or employment, or in any transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information."
6. Imposes liability for "negligent performance of services resulting in loss to persons for whose benefit the actor performs a the service ... through reliance upon it in a transaction that the actor intends to influence."
...a few comments
So before we get to Paul's article, a couple of observations on these six sections.
Section 1, is pretty broad, misleading, and unhelpful. As Paul points out in his article, there are many categories of tort to which the ELR simply does not apply, e.g. fraud or interference with economic advantage, etc. Moreover, economic loss in garden variety torts is usually ruled out on proximate cause basis, not on a categorical prohibition of economic damage. To pretend that this is a category based prohibition, except in strict products liability, is unhelpful.
Section 3. That's like saying "there is no liability for economic loss caused by negligence...., unless there is!" Do we need this? Should this remain hidden behind a pay wall? Buried for good?
Section 4. This begs the question of privity of contract. Does "to serve client" limit recovery to the client. The whole privity thing, of course, makes no sense when we are talking negligence. Isn't the whole point of negligence that this is damage recoverable independent of contract? Is an architect liable to everybody on the project, or just the owner? Is a construction manager liable for all economic damage suffered by everyone on the project when they fail to use due care? Is that what ALI wants to say? Courts, of course have been all over the map on this.
Section 5. This is the vehicle with which architects have often been held liable for economic damages resulting from their defective plans .... which "supply false information." I don't think making an architect liable on this basis, and exempting a construction manager by applying the ELR is a distinction that makes sense or is justifiable.
Section 6. I understand this was not "approved" at the 2012 ALI meeting. What is the status now? Is this pretty much argle bargle, as Scalia might say? Does "for whose benefit the actor performs the service" mean privity of contract? Construction, of course, is a cooperative venture... pretty much everyone's actions are relied on by everyone else. And WTF does "that the actor intends to influence" mean?
No, I don't think the ALI is advancing the ball here. Not at all.
Next .... let's see what Paul Hellegers thinks of it. Go read the article, come back for the discussion.
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