In the "A" part of this paper we'll go through several cases to which the tort law can be applied. The "B" part is a discussion of liability, standards and duty of care.

"It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the duty by reference to the kind of damage from which A must take care to save B harmless." 

Accordingly auditors were not liable for their failure to use reasonable care in auditing a company's accounts to a shareholder who relied on the accounts in order to make a take-over bid for the company. They were in breach of their duty of care to the plaintiff because it was a shareholder in the company, but they were not liable for loss which it suffered in a different capacity, shared with every one else, as a potential buyer of the company's shares. Despite the way in which Lord Bridge formulated the issue, it is conceptually better to say that the defendant's liability for the consequences of his actions is limited by reference to the scope of the duty than to say that the duty itself is owed only with respect to a particular kind of loss. 

Liability is given if "the defendant giving advice or information was fully aware of the nature of the transaction which the plaintiff had in contemplation, knew that the advice or information would be communicated to him directly or indirectly and knew that it was very likely that the plaintiff would rely on that advice or information in deciding whether or not to engage in the transaction in contemplation". 

So, as it is shown in the given examples, Peter also cannot recover for his loss (which is a pure economic one).

2.

An essential part of each civilized state is the legislative, executive and judicial powers which define the rights and obligations of each state citizen. The rules which must be abided are compensated by the rights which give an individual some freedom of fulfilling certain actions. In their turn all these actions are still to correspond with the obligations and laws regulating social life of the country.

In contemporary Europe the legislative standards are based on democracy and human freedoms. Defined standards of care give people an opportunity to defend themselves in unfair circumstances. The system works in the ways have been already checked for it has been previously applied to similar cases. Through years of such practice a perfect mechanism yields and gives people confidence when deciding whether they do right or wrong and what to do, what to apply to in each particular situation.

Strict liability and negligence

The legal regimes in the United Kingdom for the remedying of damage   already often provide for strict liability of those responsible for the damage. In the field of public law, there are many examples of restricting circumstances.

A clear example is the new regime for contaminated land under Part IIA of the Environmental Protection Act 1990, which makes the person who has caused or knowingly permitted contamination of land liable, subject to certain limitations, to remedy the damage, without any proof of negligence.

In the field of private law, in England and Wales, liability under the common law rule in Rylands v Fletcher does not require proof of negligence. This rule provides that where a person brings onto his land something which is likely to do mischief if it escapes (provided it amounts to a non-natural use of the land), he will be liable if the thing escapes and causes damage.

Liability under the common law rules of nuisance (which can cover many forms of environmental damage) also arises without the need to prove negligence. The proposal for a general regime of strict liability would not, therefore, introduce any new principle. The effects of such a regime would therefore depend on the extent to which it extended strict liability beyond the areas in which it already arises.

Standard of care

The Consumer Protection Act, 1987, was enacted in the UK to fulfill obligations to implement a European Directive designed to protect consumers across member states.

It introduces so-called “strict liability” (as opposed to fault liability in the contract and tort systems) for defective products supplied in the course of a business.

But restricting circumstances does not require proof of negligence.  Where damage is caused by a defect in a product then the producer is liable to compensate the injured party whether or not he/she is at “fault”.

It should be noted that the removal of the fault criteria means that the Consumer Protection Act imposes the highest “standard of care” on a producer. And this, of course, is the way to control liability.

The practical scope for a manufacturer or supplier to exclude or restrict his liability under the Consumer Protection Act is very limited.

The only practical step which a manufacturer or supplier can take is to “pass the buck” by seeking an indemnity through contract from the person who supplied him/her.

So, restricting circumstances in which the duty of care arises gives individuals of organization an opportunity not to admit liability for some wrong has been done. Thus, another party has no opportunity to make a claim or to defense its rights, no way to prove its rightness. So, here we come to a conclusion that it is better to define the standards of liability than to restrict circumstances.

Duty of care

Duty of care is a key element in the English tort of negligence. Firstly, it has to be considered whether the defendant owed a duty of care in general, secondly, it has to be examined whether a duty of care was, in the actual circumstances of the case, owed to the particular plaintiff. This was dealt with in the famous Donoghue v. Stevenson case, within the "neighbor principle". The House of Lords defined neighbors, to whom the duty is owed, as "persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation." In order to see whether there was a duty of care in relation to the victim, it has to be considered whether the particular victim was a foreseeable victim. This "neighbor principle" became a general principle of English tort law and was later developed up to a three-stages test that asks whether

-        the harm was reasonably foreseeable (Donoghue v. Stevenson)

-        the relationship between plaintiff and defendant was sufficiently proximate

-        it is fair, just and reasonable to impose a duty of care

The negligence concept is centered on the principle that every individual should exercise a minimum degree of ordinary care so as not to cause harm to others.

"Negligence is not the act itself, but the fact which defines the character of the act, and makes it a legal wrong."

There are situations in which it’s easy to establish the principle of duty of care. For example, the duty of care owed by a medical practitioner to a patient is viewed as one comprehensive duty covering diagnosis, treatment and care as well as advice and information. The standard of care to which a medical practitioner will be held is found in Bolam v Friern Hospital Management Committee [1957] 1 WLR 582, where it was held that a medical practitioner will not be found negligent as long as his or her conduct is supported by a responsible body of medical opinion. Where the profession is divided as to what is the appropriate management (as was the case in Bolam) the doctor will not be found negligent simply because the procedure adopted was not universally approved. In the Bolam case the judge said:

"a doctor is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art" 

Negligent misstatements

In England, liability for negligent misstatements provides the most important form of tortious redress for financial losses. Tracing the development of liability for negligent misstatement is complicated by the fact that the reported cases are tangled up with liability for pure economic loss. This is hardly surprising, because in most cases it is, in fact, only economic loss that the claimant suffers. Where there is actual physical damage, it seems to be taken for granted that liability for negligent advice is not excluded. In Clayton v Woodman, for example, architects were held liable for misdirecting a bricklayer, with the effect that a wall collapsed and injured the claimant. It was argued on behalf of the defendant that there was simply no liability for negligent misstatement. The Court of Appeal preferred the view that the authorities applied only to economic, not physical, loss. So the story of negligent misstatement is intimately bound up with the story of pure economic loss.

Breach

The central idea in tort law is that liability is based not so much on acting badly or wrongfully, but on committing a wrong. At the same time, a victim's claim to recover for harm to her depends on the wrong the injurer has committed being a wrong to her. It is not enough that the injurer has committed a wrong and that she (the victim) has suffered as a consequence. The defendant's liability to the victim and the victim's claim against the defendant depend on the defendant's having breached a duty of care to the victim.

The elements of a cause of action in tort for negligence are:

- a duty to use ordinary care;

- breach of that duty;

- a proximate causal connection between the negligent conduct and the resulting injury;

- resulting damage. 

The tort consists of a breach by the defendant of a legal duty to take care not to damage the plaintiff or his property and consequent damage from that breach. In 1932, Lord Atkin in the leading case Donoghue v. Stevenson suggested a general test for when a duty is owed. It is owed to persons whom one ought reasonably to have in mind as being affected by the particular behavior. In 1963, the persuasive precedent of Hedley Byrne v. Heller & Partners extended the duty to include financial loss resulting from some careless statements.

When a statutory duty is broken there is liability for penalty stipulated in the statute. In addition a person suffering damage from the breach may sometimes bring a civil action in tort to obtain compensation.

When liability is imposed strictly, the question is whether the defendant has invaded the plaintiff's right. A plaintiff under strict liability does not have to establish the fault of the defendant, though a judgment of strict liability does not necessarily mean that the defendant has acted innocently or justifiably. According to the conventional view, under fault liability, the plaintiff has to establish not only that he was wronged by the defendant but that in doing so the defendant acted wrongfully, that is, without justification or excuse.

Conclusion

Tort law serves to protect a person's interest in his or her bodily security, tangible property, financial resources, or reputation. Interference with one of these interests is redressable by an action for compensation, usually in the form of unliquidated damages. The law of torts therefore aims to restore the injured person to the position he or she was in before the tort was committed (the expectation or rightful position principle). As we have determined in this paper, a person can get a compensation for personal injury and property damage, though cannot get it for pure economic loss.

The law of torts determines whether a loss that befalls one person should or should not be shifted to another person. Some of the consequences of injury or death, such as medical expenses incurred, can be made good by payment of damages. Damages may also be paid, for want of a better means of compensation, for non-pecuniary consequences, such as pain.

So, the key elements of the tort law are the duty of care, standard of care, negligence and breach. They are the basis on which tort law operates.

Bibliography

23. Beatson J. and Tridimas T., The Domestic Liability of Public Authorities in Damages: Lessons from the European Community?, in, eds., New Directions in European Public Law, Oxford, Hart: 1998. 
24. Chapman B., Wrongdoing, Welfare, and Damages: Recovery for Non-Pecuniary Loss in Corrective Justice, Oxford: Clarendon Press1995.
25. Epstein R.A., A Theory of Strict Liability, J. Legal Studies 2, 1973.
26. Goldberg J., Twentieth Century Tort Theories, Geo. Law Journal 90, 2002.
27. Hirschoff J.T., Calabresi, Guido, Toward a Test for Strict, Liability in Torts, Yale Law Journal 85, 1972.
28. Hope T, Savulescu J, and Hendrick J - Medical Ethics and Law: the Core Curriculum. Edinburgh: Churchill Livingstone, Elsevier Science, 2003.
29. Polinsky M.A., Shavell S., Should Liability Be Based on the Harm to the Victim or the Gain to the Injurer? Journal of Law, Economics, and Organization 10, 1994.

Acts of Parliament:

1. Consumer Protection Act 1987 -  
2. Environmental Protection Act 1990 - www.opsi.gov.uk/acts/acts1990/Ukpga_19900043_en_4.htm - 32k 07-12-2005
3. Limitation Act 1980 -  - 07-12-2005
4. Health and Safety at Work etc. Act 1974 -  
5. Sale of Goods Act 1979 -  - 06-12-2005
6. Supply of Goods and Services Act 1982 -  
7. Unfair Contract Terms Act 1977 -  - 07-12-2005

Relevant Cases:

1. Dorset Yacht Co. Ltd. v. Home Office [1970] AC 1004  - office.co.uk/pa/ld199899/ldjudgmt/jd981208/bt01.htm  -07-12-2005
2. Aswan Engineering v Lupdine Ltd and another [1987] 1 All ER 135    -07-12-0-2005
3. Donoghue v. Stevenson [1932] AC 562  Law Reports, 1932, Appeal Cases.  House of Lords and Privy Council.    -08-12-05Evans v Triplex Safety Glass Co [1936] 1 All ER 283   -07-12-2005
4. Richardson v LRC Products [2000] Lloyd's Rep Med 280.   -07-12-2005
5. Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd., [1972] 3 All ER 557  JOURNAL OF SOUTH PACIFIC LAW - ARTICLES Article 8 of Volume 4, 2000 TOWARDS A PRAGMATIC APPROACH TO THE CONTRACT OR TORT DEBATE IN THE SOUTH PACIFIC By Sue Farran and Jennifer Corrin Care
6. Caparo Industries Plc v Dickman and Others [1990] 2 AC 605   Chapman B., Wrongdoing, Welfare, and Damages: Recovery for Non-Pecuniary Loss in Corrective Justice, Oxford: Clarendon Press1995
7. Rylands v Fletcher (1868) LR 3 HL 330 RYLANDS v FLETCHER. INTRODUCTION.
8. Hedley Byrne v Heller [1964] AC 465.
9. Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 Hope T, Savulescu J, and Hendrick J - Medical Ethics and Law: the Core Curriculum. Edinburgh: Churchill Livingstone, Elsevier Science, 2003.

Relevant Internet Sources:

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