Chapter 41- Novel Duty situations

Question 1

Describe pure economic loss

Answer 1

• This refers to when the claimant suffers a financial loss due to the negligence of the defendant
• This loss was not the result of any personal injury or damage to property

Question 2

What are the number of requirements the HOL set in order to establish a duty of care

Answer 2

• A special relationship between the parties
• A voluntary assumption of responsibility by the party giving advice
• The party giving the advice must know that it will be relied on and it must be reasonable for the party to rely on that device

Question 3

How do the courts outline when a special relationship has been formed

Answer 3

• A reliance by the claimant on the defendant’s special skill and judgment
• Reasonable knowledge that the claimant would be relying on the advice
• It being reasonable in the circumstance for the claimant to rely on the defendant

Question 4

When is responsibility voluntarliy assumed for advice

Answer 4

When people choose to advise without any warnings or disclaimer

Question 5

What is the Hedley Byrne principle

Answer 5

This principle establishes that a party can be held liable for pure economic loss caused by a negligent misstatement

Question 6

What are the key elements of the Hedley Byrne principle

Answer 6

• Special relationship
• Economic loss
• Negligent misstatement
• Reasonable foreseeability

Question 7

Why did the courts reject cases that involved liability over nervous shock

Answer 7

• There was insufficient understanding of psychological harm arising from an accident
• Because of the floodgates of cases

Question 8

The law recognises 2 categories of victim:

Answer 8

PRIMARY: A person present at the scene of an incident who is either harmed or at risk of harm
SECONDARY: A victim who is a passive or unwilling witness of injury caused to others

Question 9

What are the conditions for liability of nervous shock

Answer 9

• 1.Recognised psychiatric injury/ no mimicking symptoms
• 2.Foreseeability
• 3.Causation

Question 10

What are the conditions for a second victim to claim psychiatric harm

Answer 10

• Relationship proximity: They must have a close tie with the primary victim
• Proximity in time and space: Have to be present at the scene
• Perception: The claimant must have directly perceived the incident
• Psychiatric harm must be foreseeable

Question 11

What are the exclusions for claiming nervous shock

Answer 11

• Normal emotional distress e.g upset, grief.
• Gradual relaization- less likely to succeed if the harm arises later