• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Law- Negligence

Extracts from this document...

Introduction

A negligent misstatement or careless statement causing physical damage is actionable in negligence, as is a fraudulent statement causing economic loss in the tort of deceit. It was only in Hedley Byrne v Heller [1963] where the defendant bank falsely and negligently gave its opinion that a company was financially sound that a careless statement causing pure economic loss was held actionable by the House of Lords. The courts system develops incrementally as new cases are heard. Hence, this essay will focus on one aspect of tort law- the claim for economic loss, which was first demonstrated in the Hedley Byrne case and how it has led to other decisions of the courts in subsequent cases. The facts of the Hedley Byrne case are that the claimant was an advertising company that was offered work by a small company with whom they had no previous dealings. It sought a reference from the company's bank which was prepared without any checks being made into the current state of finances. In reliance upon the bank's reference, the claimant carried out work for the company which then went into liquidation before any payment was made. ...read more.

Middle

Lord Bridge said that "the defendant giving advice was fully aware of the nature of the transaction which the plaintiff had in contemplation, knew that the advice would be communicated to him directly or indirectly and knew that it was very likely that the plaintiff would rely on that advice in deciding whether or not to engage in the transaction in contemplation" The House of Lords held that no duty of care was owed by the defendant, since the primary purpose of the account was not for guidance of personal investment. The "Caparo test" was introduced included the three principles of * Reasonable foresight of harm * Sufficient proximity of relationship, which was established in the earlier 1964 Hedley Byrne case * That is fair, just and reasonable to impose a duty It stated that a duty of care in misstatement would only arise when the person making the statement is fully aware of the purpose of it; that acting on the advice given in the statement without further independent research is reasonable in the circumstances; and that this is to the advisee's detriment. The test was applied in Morgan Crucible Co, Plc v. ...read more.

Conclusion

It must be clear that the answer is important and relevant enough for the plaintiff to rely on. For example, in Chaudhry v Prabhker [1988], a knowledgeable friend was held to owe a duty of care in relation to negligent advice about a car given to the claimant, who knew nothing about cars. In conclusion, the development of negligent misstatement derives from the case Hedley Byrne v Heller that sets out the rule that the claimant can succeed if a special relationship exists between claimant and defendant. Also, actionable negligent misstatement occurs when the claimant relied on defendant's advice or information. The courts will decide if a special relationship exists by asking a few questions, in the Caparo case, it is "Did the defendant know or ought defendant to have known why the claimant required advice or information?" thus setting out the three principle tests to establish if a duty of care was present and further developed negligent misstatement. The other question the courts will ask is "Did the defendant assume responsibility to give advice or information". This was founded in Henderson v Merrett Syndicates. Therefore, it is not easy to bring an action against someone who carelessly says something as precedence takes place evidently in the UK courts. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Law of Tort section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Law of Tort essays

  1. Marked by a teacher

    Discuss the extent to which discrimination is prohibited under English and Welsh law (25 ...

    5 star(s)

    Most judges are of 50 years plus. An example: O'Reilley v BBC 2011 where the BBC where found guilty of age discrimination on Countryfile it was stated that if the BBC had changed the name of their program they would have won.

  2. Marked by a teacher

    Critically evaluate the principles governing the law on Intoxication.

    3 star(s)

    Recklessness is sufficient for basic intent crimes to prove the defendant had the mens rea and he does not have to foresee any consequences. Voluntary intoxication is no defence for basic intent crimes, this was exercised in the case DPP v Majewski (1977), defendant had been taking a combination of barbiturates, speed and alcohol for 36 hours.

  1. Fault Essay

    foresee the consequence and also it's not clear as to when this would move to the 'daft and unexpected' which according to Roberts would remove fault on the part of D.

  2. Examine the arguments for and against strict liability illustrating your answer with example of ...

    she had no such knowledge her conviction could not stand, therefore declaring that this offence was not one of strict liability. This was the right decision for the House of Lords to make as it would be completely unjust to punish the landlady for a crime that she had neither any part in or any knowledge of.

  1. Gross negligence and recklessness.

    but so far there has been little enthusiasm except in cases of criminal damage and reckless (now dangerous) driving. However there is now a statutory definition of 'dangerous' under s.1 Road Traffic Act 1991 BUT it has not been applied to rape S (1983)

  2. UNIT3 ASSIGNMENT4 LAW OF TORT

    or of foreseen that it would result in Leonard's land being damaged. Ken may file for the defence of Volenti non fit injuria (malcom), absolute statutory authority, the nuisance was caused by a stranger and the Ken could not possibly have known of it. Contrast, however, Rennaway -v- Thompson (1980)

  1. In this report, the differences between contractual liability and tortuous liability are explained. In ...

    un-liquidated and are determined by the court on the facts and merits and circumstances of the case. 3.2. Nature of liability of negligence 3.2.1. Legal aspects Occupier liability Occupiers' liability concerns the duty of care that those who occupy (through ownership or lease) real property owe to visitor or trespasser.

  2. Tort law assignment. Brian fell against the standard of care a reasonable man would ...

    In Capital v Hampshire County Council 1997 it was held fair to impose a duty on the fire brigade. So, it would be fair just and reasonable to impose a duty of care on Brian as he is a part qualified accountant who advised John to buy the shares, so

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work