Caparo v Dickman

Question 1

The Caparo test for duty of care provides that three factors must be taken into account. Which of the following is not included?

a) ‘Fair, just and reasonable’
b) Proximity
c) Morality
d) Foreseeability

Answer 1

c) Morality

Question 2

What test did the house of Lords over rule to establish the Caparo test?

Answer 2

Anns test

Question 3

FACT

Answer 3

Facts
Caparo, a small investor purchased shares in a company, relying on the accounts prepared by Dickman

Caparo lost money due to the accounts being negligently prepared

Question 4

Issue

Answer 4

Could Dickman be liable to Caparo for their negligent preparation of relied upon company accounts; given there was no contractual relationship between the two parties

Question 5

Decision

Answer 5

No liability under a test of duty, ‘the Caparo test’, claim failed

The Caparo test – foreseeability, buy xanax in the uk proximity and ‘fair, just and reasonable’ was failed due to a lack of proximity

Allowing claim would allow “liability in an indeterminate amount for an indeterminate time to an indeterminate class”

In claims for economic loss, there must be a common purpose, a proximate relationship, known communication with expected reliance and actual reliance.

There was no proximity as the defendant’s knew nothing about Caparo

Question 6

What is the three part test?

Answer 6

• Proximity
• Fair just and reasonable
• Foreseeability

Question 7

What does proximity mean?

Answer 7

Proximity simply means that the parties must be ‘sufficiently close’ so that it is ‘reasonably foreseeable’ that one party’s negligence would cause loss or damage to the other.

Question 8

What does foreseeability mean?

Answer 8

A consequence is reasonably foreseeable if it could have been avoided in the first place.