Let us now look at Kevin’s case, if Adder is liable for his loss, if we look at the legal principle laid out in Howard Marine v Ogden which looks at the special relationship which Hedley Byrne had never really examined, so it has become an area of judicial making, it has been suggested that a business or professional relationship might in general give rise to the duty if the claimant is genuinely seeking professional advice, in Howard Marine v Ogden it was accepted that the relationship for the purposes of imposing duties. However on a purely social relationship should not normally give rise to duty of care, but has done when it has been established that carefully considered advice was being sought from a party with some expertise, this was laid out in Choudhry v Prabhaker. If we also look at the reasonable reliance on the advice given by Adder to Kevin, if there is no reliance placed on the advice given there should not be no liability of Adder for giving it, this was raised in JEB Fasteners Ltd v Marks Bloom & Co, a negligent statement to the company’s stock did not give rise to a duty.
If we look at the legal principle laid out in James McNaughton Paper Group Ltd v Hicks Anderson & Co, the Court of Appeal identified the factors that should be taken into account in establishing a duty of care, one of which is the relationship between the person giving the advice, the person receiving the advice and the relevant third party. There are a few observation from the Hedley Byrne case, the type of duty owned from Adder to Kevin, the advice must be required for a purpose described at the time to the defendant at least in general terms, this purpose must be made known actually or by interference, the advisor i.e. Adder given the advice at the time given, Adder must be aware that the advice given to Kevin will be acted upon without benefit of any other independent advice, which has not been raised by Kevin. In Caparo, Lord Bridge had drew up a distinction between giving advice to someone who is fully aware of the nature of the transaction, is not as same to a statement that is put into more or less general circulation, which the maker of the statement has no specific reason to contemplate.
Now let us look at the Adders liability toward Pablo’s loss, it was held in Caparo where the test applies to anyone that fall under these categories, a duty of care will exist where the damage was reasonable foreseeable, there is a relationship of proximity and it is just fair and reasonable to impose such a duty, with Pablo he will need to prove that the existing duty from Adder was breached and that breached caused damaged.
If we look at the legal principle laid out in the London waste v AMEC Civil Engineering, a case similar to Spartan Steel in that the claimants, a company which burnt waste to provide electricity, lost profit. As a result of being forced to close down when the defendant road menders severed a power cable, the road company was allowed to recover for physical damage done but not for loss of income for the sale of electricity. From looking at this case we can say that Pablo has a good case for claiming his loss of physical damage but not for his profit lost, he will receive damage from hi car insurance which should cover the damage done to his car. Another legal principle we can look is Watson v British Boxing Board of Control, the Court of Appeal applied the Caparo case and upheld the boxers claim against the sports controlling body, the injury was foreseeable by the boxers licensing system operated by the board, created a relationship of proximity and it was just fair and reasonable to impose duty.
Pablo may not be successful to claim for psychiatric
Now let us look at Musko Plc and if Adder is liable for their loss of profit, pure economic loss is only recoverable under the Hedley Byrne principles, where it is caused by either negligent advice or information or by negligent acts. It is also not recoverable when caused by negligent acts other than provision of services this was held in London Waste v AMEC Civil Engineering. It was also held in Hedley Byrne that there was no liability for economic loss, the following principle will apply for economic loss, there should be a duty of care to give careful advice and that breach of that duty could rise to liability for negligence, the fact that the sole damage was economic loss did not affect the question of liability, and this principle applies to Adder. It was held in Alcock v Chief Constable of South Yorkshire that one of the requirements for recovery by a secondary victim was that they should have a relationship with a primary victims that was ‘close in care, meaning that it is not sufficient to establish for example that the primary and secondary victims were brothers, it must also be proved that the relationship between them was close in terms of the way felt about each, as you can see there is no relationship like that with him and Musko Plc, even with Pablo there is no such relationship.
In the case of Weller v Foot and Mouth Disease Research Institute, the was held although a duty of care was owed to the cattle owners in the vicinity, none was owed to the claimants as they had no proprietary interest in anything which could be affected by the a escape of the virus. It was held that all who had suffered financially as a result of the defendant’s carelessness, for policy the defendants were outside there area of responsibility and the same will apply to Adder for his liability. It was held in Liesbosch Dredger V SS Edison, the House of Lords refused to compensate for the cost of the hired ship, on the ground that this loss was caused by their own financial circumstance and was not foreseeable by the defendants, as you can see from the above cases Adder may not be liable for Musko Plc going into liquidation.
Bibliography
C. Elliot and Quinn. F (2003) ‘Tort Law’ Forth Edition, Published by Pearson Longman
C. Turner (2003) ‘Tort Law’ Published by Hodder and Stoughton
J. Coke (2003) ‘Law of Tort’ Sixth Edition, Published by Pearson Longman