8.1 In Chapter 3 we have discussed the elements that must be established in order to succeed in an action for negligence. In that context the courts draw a sharp distinction between claims relating to physical damage to chattels or real property, and claims for pure economic loss; the latter being regarded on policy grounds with greater caution by the courts than the former. The policy behind this caution is the anxiety about the economic and social effects of exposing potential defendants to extensive liabilities.