Chapter 5 Flashcards
Tort
Civil wrong and covers situations where the damage has been incurred but where there is no contact relationship
Duty of care
The concept that a duty of care is owed to someone with whom you had no contractual relationship with
Donogue v Stevenson
A bought B a drink which she drank,
There was part of a decomposed snail in the drink which made B ill.
The manufacturer agreed there was no contract between himself and B so there was no Duty of care
HOL laid down the general principle that every person owes a duty of care to his neighbour in law
4 tests for existence of negligence
Reasonably foreseeable
Proximity
Fair just and reasonable
Public policy
Reasonably foreseeable tests of duty of care existence
Was the damage reasonably foreseeable by the defendant as damage to the claimant at the time of the negligence act or omission
Proximity tests of duty of care existence
Is there sufficient proximity or neighbourhood between parties
Fair just and reasonable
Is it fair just and reasonable that’s the law should impose a duty on the defendant on the facts of the case
Public policy tests of duty of care existence
Would the decision go against / offend public policy
Standard of care is that of :
A reasonable man guided upon these considerations which ordinarily regulate the conduct of human affairs
(Would a reasonable person behaved in the way the defendant behaved)
Tests of standard of care
Skill
Lack of skill
No hindsight
Body of professional opinion supports
Emergency
Vulnerability
Res ipsa loquitor
Facts speak for themselves
Applies when the cause of damage is not known
The thing that caused the damage was under control of the defendant
And damage wouldn’t have arisen without the defendants lack of care
In these cases the burden of proof will fall on the defendant
But for test
Result of the beach of duty of care wouldn’t have happened BUT FOR the certain event
Loss caused by breach
Loss represented by personal injury or damage to property
Financial loss rightly relayed to such injury ie loss of earnings
Not usually pure economic loss
Spartan steel alloys v Martin contractors
C was halfway through smelting a steal I got when a cable was damaged by D causing Cs electricity to cut off
C was entitled to claim for damages on the ingot and for loss of profit on the ingot
But not for loss of profits generally as the courts ruled this should lie somewhere else ie to claim on insurwmave that they were expected to have
Andrew v Kounnis 1999
The defendant, kiunnis, prepared the accounts of an air travel company which collapsed
Accountant has assumed a duty of care to the Civil aveation authority and was liable in negligence - A reasonable accountant should’ve known that the CAA would assume the audited accounts had been prepared with due skill and care and would rely on them in delvidinh whether to review companies licence
It was reasonable foreseeable that’s the claimant would rely on the accounts
De sano v Natero
An accountant was involved in a demerger of a family owned business
A number of assets that were owned by the coming were to be moved into a new coming owned by a leaving family member.
The claimant had suffered financial loss in the demerger it was further argued that the accountant owed the family a duty of care due to long standing relationship with family company
The accountant didn’t owe the family a duty of care as they had acted on behalf of the company and not the claimant and had advised the claimant to seek independent advice, which they didn’t do
Causation of loss (but for)
In addition to showing that a duty of care is owed and that the duty of care was breached the claimant must show he suffered loss AS A RESULT of the breach
JEB Fasteners v mark bloom
Accountants in the k wore tagt the company was seeking outside finance prepared accounts negligently showing overvalued stock and inflated profits.
The claimant saw the accounts and took over the company
The claim failed on grounds of causation. it was considered that the claimant should knows from his own enquiries that the figures were inaccurate and that the company was taken over in order to secure the directors expertise and not purely on the basis of the accounts
Ie but forest wasn’t satisfied
Companies act liability for auditors report and audited accounts
- an auditor commits and offence under the companies act if he recklessly caused an auditors report to contain any matter that is misleading or false to a material extent. Such a offence is punishable by fine
-any provision which exempts and auditor if a company from liability for negligence is void
- a company may enter into liability limitation agreement with an auditor, limiting his liability for negligence in the cause of auditing accounts to a fair and reasonable amount
