Chapter 4 - Negligence Flashcards
What is tort?
A civil wrong.
Covers situations where damage has been incurred but there is no pre-existing contractual relationship.
Who do you owe a ‘duty of care’ to?
You ‘neighbour’ - people who are directly affected by my actions
Breach of duty of care
The failure to act as a reasonable person.
This must be proven - innocent until proven guilty
What is res ipsa loquitur?
‘the facts speak for themselves’
The burden of proof is reversed - guilty until proven innocent (prove not negligent)
‘Reasonable man’ tests/ factors (7)
- Having particular skill i.e. driving instructor would have higher skill level
- Lack of skill is irrelevant (cannot decrease) i.e. standard of care for learner is the same as reasonable driver
- No hindsight - knowledge available at the time
- Body of professional opinion supports the approach taken
- Advantage and risk must be reasonably balanced
- Was it an emergency?
- Vulnerability of a person - higher standard of care owed to more vulnerable
Loss caused by breach & 3 claims
Claimant must demonstrate that they suffered loss
- Loss represented by personal injury or damage to property
- Financial loss directly connected to 1
- NOT pure economic loss (unless professional negligence)
Professional advice and negligence - what can you claim?
As there is no personal injury or damage to property - can claim for pure economic loss
Accounts prepared for general circulation - Special relationships (2 contradicting cases)
- Caparo v Dickman
A shareholder invested due to the accounts showing profit. Actually made a loss .: loss on investment.
Couldn’t sue as duty of care was to the shareholders as a whole & not for purpose of investment advice - Royal Bank of Scotland
Lender relied on accounts. Duty of care may be owed to lenders. .: can sue for losses.
Accounts prepared for purposes of takeover - Special relationships. (2 cases)
Owe a duty of care if the bidders are KNOWN.
1. Galoo
Auditor owed a duty of care to KNOWN takeover bidders when told they would be relying on accounts
- ADT
Audit prepared accounts. ADT set up meeting re replying on accounts for takeover bid (made them KNOWN/ a neighbour .: duty of care) then auditor knew of intent and was liable
Causation of loss (& case)
Need to show that the loss was suffered due to the breach
JEB
Accounts were negligently produced, resulting in bad takeover. However, claimant failed in court as he would have done it anyway. Not the SOLE purpose
Auditors liability & Companies Act
Auditors can ALWAYS be sued for negligence despite clauses to prevent this (void)
However, can have limited liability agreements [requires shareholder approval]
Defenses to claims of negligence (3)
- Contributory negligence - damage/ loss suffered was partly due to claimants fault i.e. not wearing a seatbelt
- Volenti non fit injura (to a willing person, no injury is done) - claimant VOLUNTARY CONSENTED to the risk of damabe/ loss i.e. boxing
- Exclusion clauses - excluding liability for death. personal injury caused by negligence = void. Other damages/ loss subject to reasonableness test
Damages (compensation) - purpose
To put the claimant in the position he would have been if he had not suffered loss
HOWEVER
damage must not be too remote
Damage occurred must be reasonably foreseeable
(CASE: oil spill in sea lead to large fire, pollution foreseeable risk, fire is not)
Vicarious liability
The employer/ principal can be held liable for the tortious acts of an employee/ agent
Tests for vicarious liability (2)
- The wrongdoer must be an employee
2. The employee must have been working in the course of his employment (even if improperly/ illegally)
