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ICAEW Law: QB2020 > 04. Negligence. > Flashcards

04. Negligence. Flashcards

1
Q

T/F: A claimant for negligence must have suffered personal injury.

A

FALSE

Negligence exists in respect of financial loss, for example damage to property.

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2
Q

The standard of proof in a negligence case is …

A

on the balance of probabilities.

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3
Q

T/F: An action for negligence requires a pre-existing relationship between claimant and defendant.

A

FALSE

see Donoghue v Stevenson

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4
Q

T/F: A duty of care will only be allowed to exist if it the court deems it in accord with public policy.

A

TRUE

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5
Q

T/F: Intention is irrelevant in determining whether a duty of care exists.

A

TRUE

it may only be relevant when determning the measure of any damages.

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6
Q

T/F: When establishing the existence of a duty of care, the court will decide if it is fair that the law should impose such a duty.

A

TRUE

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7
Q

T/F: When establishing the existence of a duty of care, the court will decide whether it was reasonably forseeable that the claimant might suffer damage as a result of the defendant’s actions.

A

TRUE

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8
Q

T/F: When establishing the existence of a duty of care, the court will determine whether there is sufficient proximity between the parties.

A

TRUE

see Donoghue v Stevenson

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9
Q

The facts speak for themselves.

A

Res ipsa loquitur.

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10
Q

Res ipsa loquitor is argued by …

A

the claimant.

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11
Q

If the precise reason for loss or damage is unknown but it is clear that it would have happened “but for” the defendant’s action or lack of it, the claimant may argue …

A

res ipsa loquitur.

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12
Q

Whether the breach of a duty of care has occured is a matter of …

A

fact.

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13
Q

If res ipsa loquitur is successfuly argued, the burden of proof lies upon the …

A

defendant.

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14
Q

T/F: Remoteness is relevant when establishing whether or not a duty of care exists and/or has been breached.

A

FALSE

proximity is relevant

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15
Q

The three requirements for a successful action for negligence.

A

A duty of care exists.
It was breached by the defendant.
The claimant suffered injury, damage or loss as a result.

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16
Q

T/F: a contractual relationship is necessary to found an action for negligence.

A

FALSE

see Donoghue v Stevenson

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17
Q

T/F: In order for a duty of care to exist, there must be a sufficient degree of proximity or neighbourhood between the parties.

A

TRUE

see Donoghue v Stevenson

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18
Q

T/F: no contractual relationship is necessary to found an action for negligence.

A

TRUE

see Donoghue v Stevenson

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19
Q

In order for a duty of care to exist thre must be a sufficient degree of … between the parties.

A

proximity or neighbourhood

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20
Q

In order for a … to exist, there must be a sufficient degree of proximity or neighbourhood between the parties.

A

duty of care

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21
Q

T/F: a manufacturer can owe a duty of care to a person who does not actually buy their goods.

A

TRUE

see Donoghue v Stevenson

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22
Q

T/F: an action for ordinary negligence requires a special relationship of some sort between the parties.

A

FALSE

see Donoghue v Stevenson

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23
Q

T/F: The standard of care owed by a learner driver is that of a reasonable learner driver.

A

FALSE

the fact that they are a learner is immaterial.

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24
Q

A particular vulnerability will only be material if …

A

-the defendant is aware of the vulnerability
-such knowledge has the effect of raising the standard of care required

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25
Q

Retrospective advice given by a professional body …

A

cannot be used to establish breach of a duty of care in hindsight.

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26
Q

T/F: The standard of care needed to satisfy a duty of care is always that of “a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs”

A

FALSE

an individual’s qualifications and experience are relevant to the standard of care expected.

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27
Q

T/F: a careless driver is likely to be found negligent in respect of a passer by suffering loss or damage.

A

FALSE

unless the proximity test is satsified.

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28
Q

A professional adviser giving incorrect advice may inclur liailbity in …

A

tort and contract

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29
Q

T/F: When preparing accounts, an accountant owes a duty of care to an individual shareholder or group of shareholders.

A

FALSE

see Caparo v Dickman

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30
Q

T/F: When preparing accounts, an accountant owes a duty of care to their client, in addition to any contractual obligations.

A

TRUE

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31
Q

T/F: From a negligence point of view, accounts are prepared in order to inform creditors and investors.

A

FALSE

see Caparo v Dickman

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32
Q

T/F: A duty of care is owed to a third party who sees accounts and then acts upon the information.

A

FALSE

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33
Q

T/F: A duty of care exists in repespect of professional advice given at a social event.

A

FALSE

unless there are exceptional circumstances.

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34
Q

T/F: An accountant owes a duty of care to identified takeover bidders whom he knows will be reliant upon their work.

A

TRUE

see RBS v Bannerman

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35
Q

In order for damages to be awardable in respect of negligent misstatement the third party must have suffered …

A

loss.

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36
Q

A claim for pure economic loss arising from negligent misstatement requires a ‘…’ between the claimant and defendant in order for a duty of care to exist.

A

special relationship

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37
Q

T/F: A claim for pure economic loss arising from negligent misstatement requires a ‘special relationship’ between the claimant and defendant in order for a duty of care to exist.

A

TRUE

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38
Q

T/F: A claim for pure economic loss arising from negligent misstatement requires a contract between the claimant and defendant in order for a duty of care to exist.

A

FALSE

only a ‘special relationship’ is required, not a contract.

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39
Q

The Nicholas H tests of whether a duty of care exists: RF*, P, FJAR, PP

A

reasonably forseeable

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40
Q

The Nicholas H tests of whether a duty of care exists: RF, P*, FJAR, PP

A

proximity

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41
Q

The Nicholas H tests of whether a duty of care exists: RF, P, FJAR*, PP

A

fair, just and reasonable

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42
Q

The Nicholas H tests of whether a duty of care exists: RF, P, FJAR, PP*

A

public policy

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43
Q

The Nicholas H tests of whether a duty of care exists.

A

-Reasonably forseeable.
-Proximity.
-Fair, just and reasonable.
-Public policy.

44
Q

Hedley Byrne: Professional advice upon which the giver knows or should know that anouther will place … on it establishes a duty of care.

A

reliance

45
Q

The principle established in the Hedley Byrne case.

A

Professional advice upon which the giver knows or should know that another will place reliance on it establishes a duty of care.

46
Q

T/F: A key point in the RBS v Bannerman case is that the auditor knew that the accounts would be sent to the lender as part of the lending agreement.

A

TRUE

A duty of care was established because, despite there being no contractual relationship between the auditor and RBS, they knew that they were going to see the audited financial statements and be likely to rely on them.

47
Q

The existence of an identified person, for example a major lender or takeover bidder, known to an accountant or auditior establishes …

A

a special relationship and therefore a duty of care.

48
Q

The existence of a large class of unidentified persons not individually known to an accountant or auditior means …

A

that no special relationship exists and therefore neither does a duty of care.

49
Q

Damages in tort are intended …

A

to put cthe claimant in the position they would have been had the tortious act not been committed.

50
Q

Defences to negligence: CN*, VNFI, EC

A

contributory negligence

51
Q

Defences to negligence: CN, VNFI*, EC

A

volenti non fit injuria

52
Q

Defences to negligence: CN, VNFI, EC*

A

exclusion clauses

53
Q

Defences to negligence.

A

-Contributory negligence.
-Volenti non fit injuria.
-Exclusion clauses.

54
Q

T/F: A person commits an offence under the Companies Act if he knowingly or recklessly causes an audit report to include any matter that is misleading, false or deceptive in a material particular.

A

TRUE

55
Q

A person commits an offence under the Companies Act if he … causes an audit report to include any matter that is misleading, false or deceptive in a material particular.

A

knowingly or recklessly

56
Q

A person commits an offence under the Companies Act if he knowingly or recklessly causes an audit report to include any matter that is … in a material particular.

A

misleading, false or deceptive

57
Q

A person commits an offence under the Companies Act if he knowingly or recklessly causes an audit report to include any matter that is misleading, false or deceptive in a …

A

material particular.

58
Q

T/F: A liability limitation agreement between a company and its auditor is automatically void.

A

FALSE

there are however controls on such agreements

59
Q

T/F: A auditor can limit their potential liability to a client in respect of a stautory audit via a standard exclusion clause.

A

FALSE

A separate ‘liability limitation agreement’ is required.

60
Q

An auditor can only limit their potential liability to a client in respect of a stautory audit via …

A

a liability limitation agreement under with s.534 of the CA (2006).

61
Q

A person who ‘knowingly or recklessly causes an audit report to include any matter that is misleading, false or deceptive in a material particular’ is liable to …

A

a fine.

62
Q

T/F: A company can agree to indemnify an auditor against liability.

A

TRUE

provided that it is via a ‘liability limitation agreement’

63
Q

Exclusion or indemnity for the potential liabilty of an auditor in respect of a statutory audit is only available via …

A

a valid ‘liability limitation agreement.’

64
Q

T/F: In determining the existence of a duty of care, the purpose for which a potentially negligent (mis)statement was made is relevant to the court.

A

TRUE

65
Q

The limitation period for a claim in tort for personal injury.

A

3 years

66
Q

The limitation period for a claim in tort for damages other than personal injury.

A

6 years

67
Q

T/F: The particular skill that a person says they have is irrelevant in determining whether a duty of care has been breached.

A

FALSE

If a person professes a particular skill, the standard is that of a reasonable person with that skill.

68
Q

T/F: the UCTA (1977) provides that a person who is acting in the course of a business cannot exlude liability for the consequences of any negligent act on their part.

A

FALSE

69
Q

T/F: the UCTA (1977) does not apply to a clause exluding liability for negligence which has been agreed between two businesses.

A

FALSE

Liabilty for death or personal injury resulting from negligence cannot be excluded.

70
Q

T/F: the manner in which loss is suffered is relevant to establishing the amount of damages recoverable.

A

FALSE

only the type of damage needs to be reasonably forseeable, not the manner in which it occurs

71
Q

T/F: the extent of the loss caused by reasonably forseeable consequences is relevant relevant to establishing the amount of damages recoverable.

A

FALSE

once a consequence has been established as reasonably forseeable, the extent of the loss is not relevant.

72
Q

Damage that is reasonably forseeable is not …

A

too remote.

73
Q

Loss caused as a result of an intentional act can never be …

A

too remote.

74
Q

T/F: Provided a kind of damage is reasonably forseeable, it does not matter that it came about in an unforseeable way, nor that it was more extensive than could have been forseen.

A

TRUE

75
Q

Provided a kind of damage is …, it does not matter that it came about in an unforseeable way, nor that it was more extensive than could have been forseen.

A

reasonably forseeable

76
Q

Provided a kind of damage is reasonably forseeable, it does not matter that it came about in an …, nor that it was more extensive than could have been forseen.

A

unforseeable way

77
Q

Provided a kind of damage is reasonably forseeable, it does not matter that it came about in an unforseeable way, nor that it was more … than could have been forseen.

A

extensive

78
Q

T/F: A principal is vicarously liable for a tort committed by an agent acting within the limits of their authority and carrying out the acts for which they were appointed as agent.

A

TRUE

see Ormrod v Crossville

79
Q

T/F: A principal is liable for the acts of his agent, provided they are commited by the agent in the course of performing the task for which they are an agent.

A

TRUE

80
Q

T/F: An employee doing his job in a manner probited by their employer takes the act outside the scope of their employment, thereby excusing the employer from vicarious liability.

A

FALSE

see Lister’s case.

81
Q

T/F: A newly qualified accountant owes a lower standard of care than an experienced one.

A

FALSE

Lack of qualification or particular weakness is not relevant.

82
Q

T/F: A client who follows negligent professional advice but suffers no consequential loss has no claim in negligence.

A

TRUE

although there may be a claim for breach of contract.

83
Q

A client who follows negligent professional advice but suffers no consequential loss only has a claim in …

A

contract.

84
Q

T/F: A client who follows negligent professional advice but would have suffered loss anyway can nevertheless pursue a negligence claim.

A

FALSE

only consequential loss is claimable.

85
Q

The victim of a tort committed by an employee in the course of their employment …

A

may sue the employee and/or the employer (vicarious liability)

86
Q

The victim of a tort committed by a partner in the course of business of their firm or with the authority of their co-partners …

A

may sue the parther, the firm, and the other partners.

87
Q

T/F: an auditor owes a duty of care to an existing shareholder.

A

FALSE

see Caparro v Dickman

88
Q

T/F: the principal purpose of vicarious liability is to punish the employer for employing a negligent employee.

A

FALSE

it is to ensure that the victim has a solvent person againt whom a claim can be brought.

89
Q

T/F: the principal purpose of vicarious liability is to force the employer to bear the losses as well as the benefits of the employee’s service.

A

FALSE

it is to ensure that the victim has a solvent person againt whom a claim can be brought.

90
Q

T/F: The primary purpose of vicarious liability is to ensure that the victim has a solvent person against whom a claim can be brought.

A

TRUE

91
Q

The primary purpose of vicarious liability…

A

to ensure that the victim has a solvent person againt whom a claim can be brought.

92
Q

T/F: A person buying shares on the basis of a negligent audit report must show that their loss was suffered as a consequence of that negligence in order to have a claim.

A

FALSE

Trick question! No duty of care is owed by an auditor to a potential purchaser of shares (Caparro).

93
Q

T/F: The existence of a contractual duty of care is sufficient to establish an additional duty of care in tort.

A

FALSE

This depends upon the circumstances of the case. see Robinson v Jones [chimneys].

94
Q

T/F: In a claim for negligent misstatment it will be harder for a sophisticated investor to satisfy the court that an auditor owes them a duty of care.

A

TRUE

see Springwell Navigation v JP Morgan

95
Q

T/F: When determining whether a duty of care exists, the court will consider whether the loss or damage suffered was in the reasonable contemplation of the parties.

A

FALSE

The test is whether the loss or damage was reasonably forseeable.

96
Q

When determining whether a duty of care exists, the court will consider whether the loss or damage suffered was …

A

reasonably forseeable.

97
Q

T/F: When determining whether a duty of care exists, the court will consider public policy.

A

TRUE

98
Q

T/F: When hearing a case of alleged professional misstatement, the court will consider the special skill of the defendant.

A

TRUE

see Hedley Byrne

99
Q

Hedley Byrne: Someone possessed of a … undertakes to apply that skill for the assistance of another who R on that skill, a DoC will arise.

A

special skill

100
Q

Hedley Byrne: Someone possessed of a SS undertakes to apply that skill for the assistance of another who … on that skill, a DoC will arise.

A

relies

101
Q

Hedley Byrne: Someone possessed of a SS undertakes to apply that skill for the assistance of another who R on that skill, …

A

a duty of care will arise.

102
Q

T/F: When hearing a case of alleged professional misstatement, the court will consider the whether the defendant knew or should have known that the claimant would rely on the advice.

A

TRUE

103
Q

When hearing a case of alleged professional misstatement, the court will consider the whether the defendant knew or should have known that the claimant would …

A

rely on the advice.

104
Q

A driver causing injury to an unkown third party has liability in …

A

tort and crime

105
Q

T/F: When establishing whether a breach of a duty of care has arisen, the court will take into account any emergency circumstances prevailing at the time.

A

TRUE

106
Q

T/F: When establishing whether a breach of a duty of care has arisen, the court will take into account whether the claimant had a particular vulnerability of which the defendant was or should have been aware.

A

TRUE

see Paris v Stepney

ICAEW Law: QB2020 (11 decks)

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