Nico Cornell on the Trilemma of Pure Economic Loss
The Tort Law Research Group’s fall term public lecture was held on November 18, 2025. The speaker was Professor Nico Cornell of the University of Michigan. His talk was entitled “The Trilemma of Pure Economic Loss”. His core contention was that whether viewed through a lens focusing on economic considerations or a lens focusing on rights, pure economic loss cases involve three desirable goals but only two of these goals can be satisfied by any given outcome.
The pure economic loss rule states that a plaintiff cannot recover in a tort action for purely economic loss—losses that are not suffered in connection with an injury to person or property. Debate has long raged about the correctness of this rule and the extent to which it should be subject to exceptions. Professor Cornell focused on the extent to which the rule restricts liability in tort.
The lecture took as its central example a controversial 2005 decision of the Supreme Court of Georgia, General Electric v Lowe’s Home Centers. The complex facts involved a claim for environmental contamination to land caused by General Electric that prevented Lowe’s from proceeding with plans to build a large store. The most challenging issues involved not the damage to the land but rather what, if anything, could be recovered in respect of the alleged loss of profit from the store. The analysis is further complicated by the fact that Lowe’s owned only some, but not all, of the land to be used for the store, such that intertwined or interrelated rights were at issue. This opens the suggestion that one party could seek to recover, at least in part, for the violation of another party’s rights.
According to Professor Cornell, “the more that we take seriously the idea of full material compensation, the more we are going to get pushed away from narrow bipolarity in our reparative obligations. And, conversely, the more that we insist upon narrow bipolarity, the more we are going to miss out on compensation for meaningful impairments of our rights”.
The TLRG public lecture series is one of the most prominent in the common law world specifically about tort law, as attested to by the list of former speakers over the past 15 years, a veritable “who’s who” of tort law scholars from around the world.
This fall’s lecture was very well attended by both faculty and students, who posed challenging and thoughtful questions and were thoroughly engaged with the material.
Professor Cornell teaches and writes in the areas of moral philosophy, remedies, and private law theory. He has three degrees from Harvard University, including a PhD in philosophy. He is the author of Wrongs and Rights Come Apart (2025) which argues that rights and wrongs are not mirror images of each other but rather are distinct moral phenomena. He has won Michigan’s L. Hart Wright Teaching Award, taught at the Wharton School, University of Pennsylvania, and clerked at the Vermont Supreme Court.
