4: Negligence Flashcards
What is tort? How is it different to contracts?
Breach of a legal duty
No liability unless las recognises duty exists
Contract does not have to exist
If a contract does exist and tort is committed, claimant may choose remedy most appropriate
What are the limitation periods in contract and tort?
Contract - 6 years from breach of contract
Tort - six years, 3 years for personal injury
What are the main elements of a tort!
Must be an act or omission by defendant
Act of omission must have directly caused damage or injury to claimant (cant be too remote)
Courts must be able to establish legal liability
What is negligence? What must be proved?
Breach of legal duty of care
Which results in damage to another
Must be proved:
- duty of care was owed
- defendent breached duty
- damage or loss had been suffered
What principle underpins duty of care?
The neighbour principle
A duty of care is owed to a person, even where no contractual relationship exists
Manufactures owe a duty if care to the ultimate consumer of the product
Neighbour: ‘persons so closely and directly affected by my act that I ought to have reasonably had them in contemplation as being so affected’
What kind of losses can be claimed by Duty if Care?
Physical damage
Financial loss - due to physical damage
Purely Economic or financial - primarily negligent advice given as part of a ‘special relationship’
What are the four test to see whether a duty of care exists?
Was the damage reasonably forseeable?
is there a neighbourhood principle or sufficient proximity between parties?
Should the law impose duty of care? Fair and reasonable?
Matter of public policy?
How to prove a breach of duty of care?
Each case viewed separately. Up to claimant to prove a breach
Res ipsa loquitor
- let the facts speak for themseves
- up to defendant to prove innocence
- used when claimant cannot show how accident occured
What principles are there is degree/standard of care?
Claimant must show defendant failed to take the degree of care which a reasonable person would have taken in the circumstances
- particular skill
- lack of skill (irrelevant)
- lack of hindsight (irrelevant)
- body of opinion
- advantage and risk
- emergency
- vulnerability
What losses are normally recoverable / not recoverable?
Recoverable:
- loss from personal injury
- damage to property
- financial loss connected to personal injury
Pure financial loss is rarely recoverable
Does the remoteness rule count with duty of care?
Yes! Even if directly caused breach, will not get damages if too remote
When can you be sued for professional misstatement
You are guilty of negligence if a ‘special relationship’ exists
Professional advice always
Causing economic loss
Cases are concerned with whether duty arises
Difficult to establish clear principles
What are the three elements of a special relationship?
Was the defendant giving professional advice?
Was the advice in a business context?
Did the defendant know (or should) that the claimant would rely on advice?
When is there a special relationship in terms of finance and auditing?
If advice is given or financial statements prepared for a purpose, duty of care is owed to those relying on them for that purpose
Offence in CA2006 for an auditor to recklessly cause an auditor’s report to contain any matter that is misleading or false to material extent
General prohibition against company’s indemnifying auditors
Auditors can enter into liability limitation agreement as long as:
- approved by memebrs
- no more than year
- just and reasonable limit
What factors should be considered with duty of care with statements?
Purpose
Skill
State of knowledge
Responsibility that the defendant had
Size of class to which claimant belongs
Extent to which advice was relied on
If foreseeable that advice would be acted on
If fair and equitable to impose duty of care
