Chapter 5 - Negligence Flashcards
what can be awarded in tort cases
damages, or an injunction (exceptional cases)
What damages will be awarded in tort
award will reflect the position they would have been in had the tortious act not taking place
Contract law - limitation period
six years from breach of contract
Tort - limitation period
Six years from damage caused by tortious act being suffered (three years in the case of personal injury)
Robinson v P E Jones 2011
Defects in chimney flutes discovered 12 years after contractor built house for R.
Held where contractual duty of care is owed, does not follow that a DOC in tort is also due.
What is a tort
an act/omission by the defendant which is responsible for causing injury/damage to the claimant. Damage must be normally due to the fault of the defendant and must be caused to an interest of the claimant the law seeks to protect
Tort - who is the burden of proof on
claimant
Tort - what standard of proof required
balance of probabilities
What must be proved under negligence
- DOC owed to claimant to avoid injury/damage/loss
- Breach of DOC
- C suffered injury/damage/loss due to breach
Donoghue v Stevenson 1932
Friend purchased ginger beer for Donoghue, drank part which had snail in and fell ill/ Manufacturer (s) contended no contract, no DOC not liabile
HL held DOC owed to their neighbour, to personal so closely and directly affected by my act I ought to reasonably hadve them in contemplation as being so affected
What is needed to find an action in negligence where pure economic loss arising out of negligent misstatement is suffered
A special relationsihp
4 basis for assessing whether DOC owed
Reasonably foreseeable
proximity
fair just and reasonable
public policy
Reasonably foreseeable explained
was the damage reasonably foreseeable by the defendant as damage to the claimant at the time of the negligent act or omission
Proximity explained
is there sufficient proximity (neighbourhood) between the parties
Fair just and reasonable explained
is it fair, just and reasonable that the law should impose a duty on the defendant on the facts of the case
Public policy (re tort) explained
is there a matter of public policy that requires no DOC should be owed
what does res ipsa loquitur mean
the facts speak for themselves - damage wouldn’t have occurred without defendants lack of care
standard of care owed generally
that of a reasonable person
Standard of care - if defendant possesses particular skill
that of a reasonable person with that skill
Standard of care - if defendant possesses lack of skill
peculiarities / disabilities nor relevant Standard for learner driver is that of a reasonable driver, trainee accountant that of a reasonable accountant
principal for standard of care - no hindsight explained
the test is one of knowledge and general practice existing at the time - not hindsight or subsequent change of practice
Roe v Minister of Health 1954
Doctor gave patient injection, took normal precautions at that time, drug was contaminated in way that wasn’t understood and patient was paralysed
Held doctor was not at fault for failing to anticipate later developments
Standard of care - body of opinion expalined
claim against professional person will fail if they can point to body of professional opinion which supports the action taken and which the court considers to be reasonable
Standard of care - advantage and risk expalined
in deciding what is reasonable, balance must be struck between advantage and risk
Standard of care - emergency
if defendant acts negligently in emergency situation, this will be taken into account - test is of a reasonable person in the defendant’s situation
standard of care - vulnerability
if A owes duty to B and knows B is unusually vulnerable, a higher standard of care is expected
Paris v Stepney Borough Council 1951
P was blind in one eye and employed by the defendant on vehicle maintenance no goggles provided since risk of eye injury was small, blinded by chip of metal
Held higher standard of care owed to P as an injury to remaining good eye would (and did) blind him
A personal will only be compensated in tort if they have suffered actual loss, injury damage or harm…
as a consequence of another’s actions
Spartan Steel Alloys v Martin Co Contractors 1973
Spartan was halfway through smelting a steel ingot when cable was damaged by Martin co, electricity was cut off
Held spartan was entitled to claim damages for damaged ingot as damaged by Martin co’s act for the loss of profit consequential upon ingot being in production at time. Not claim for loss of profit generally due to disruption as non actual damage to factory
‘but for’ rule explained
would the damage have occurred but for defendant’s act or omission
Hedley Byrne v Heller 1963
Hedley advertising agent for new client, company requested Information from the new client’s bank (Heller) Heller returned non-committal replies, expressly disclaiming legal responsibility and were held to be negligent misstatement
Heller avoided liability due to disclaimer, HL considered whether DOC to avoid causing financial loss by negligent misstatement where no contractual or fiduciary - if no disclaimer, Heller would have been liabile
Hedley Byrne Heller judgement explained
if professional provides special skill to someone who relies on it, or if the professional knows or should knoww they would rely on it, this creates a special relationship and a DOC exists
Context of statements made by professionals should be considered when determining whether DOC is owed
True
J E B Fasteners v Marks, Bloom & Co 1982
Accoutnants in the knowledge that the company was seeking outside finance prepared accounts negligently showing overvalued stock and inflated profits, C saw accounts and took over company
Held - claim failed on basis of causation, considered C should have known from their own enquiries that the figures were inaccurate and company take over was to secure director’s expertise not just on basis of accoutns
T/F
Unless the defendant makes a negligent misstatement in the knowledge/reasonable expectation that an identified bidder would rely on it, no DOC is owed to anyone other than the body of shareholders as a whole
True - Caparo v Dickman 1990
Caparo v Dickman 1990 ruling
auditors duty to body of shareholders as a whole and does not extend to potential investors, nor to existing shareholders increasing their stakes
Caparo v Dickman 1990 - purpose of annual accounts
to enable shareholders as a whole to exercise the rights in respect of the management of the company and not to give advice on the merits of further investment in the company
T/F
If professionals provide information to a particular person in the knowledge they will rely on it, likely to owe DOC
True
James MacNaughton Papers v Hicks Anderson 1991
held since accounts were draft and drawn up specifically for the chair, accountant only owed DOC to chair and no other potential bidders
RBS v Bannerman 2005
Third party can be owed DOC if auditors knew their identity, the use to which information would be put, and that the third party intends to rely on it
Barclays v Grant Thornton 2015
auditors disclaimed liability on the face of reports which were relied upon by lender of hotel chain which went into administration. Court held it was perfectly reasonable for auditors to avoid liability by including a disclaimer
Morgan Crucible v Hill Samuel Bank 1991
Where FS are prepared for the purpose of contesting a proposed takeover bid, the directors and financial advisers will owe DOC in respect of them to a known takeover biddger
Galoo v Bright Grahame Murray 1995
CA reiterated auditor owes DOC to takeover bidder where they have been expressly informed the bidder will rely on the accounts for the purpose of determining the value of their bid and the bidder does so rely on them
ADT v BDO Binder Hamlin 1996
BH signed of audit of BSG showing t&f view of position. ADT was thinking of buying, as potential buyer sought BH confirmation of the results. Partner specifically confirmed he stood by firms audit, purchased £105m only worth 40m and sued
Held BH assumed responsibility for statement that accounts were t&f view, audit work negligent, BH liabile
Law society v KPMG 2000
KPMG retained by solicitors to prepare annual reports required by law society, who found solicitors had been defrauding clients and amounts had to be made good from compensation fund law society was trustee of, LS sued KPMG for negligence.
Held KMPG owed DOC to LS and liable in negligence, just and equitable
Andrew v Kounnis Freeman 1999
K prepared accounts of travel company which collapsed
Held that accountant had assumed DOC and was liable in negligence, reasonable accountant should know CAA would assume that audited accounts prepared with due skill and care and would be relied on when deciding whether to renew licence
De Sent v Notaro 2020
Accountant involved in demerger of family owned business, designed to move a number of assets of family company to new company which would be owned by family member who wished to move interests away from rest. C claimed assets had values inflated and therefore was financial loss due to demerger, c argued accountants owed DOC
held no DOC owed as only acted on behalf of company, not claimant and had advised C to seek independent advice
In addition to tort, auditor commits offence under which act if they recklessly cause report to contain any matter that is misleading, false to material extent and is punishable by fine
Companies Act 2006
T/F
Any provision with exempts an auditor of a company from or indemnifies them against liability for negligence in relation to providing audited accounts if void
True - CA
T/F
Company may enter into limitation liability agreement with auditor, limiting liability for negligence in the course of auditing accounts to fair and reasonable amount
True
Defences under negligence
Contributory negligence
Violent non fit injuria (to a willing person no injury is done)
exclusion clauses
Contributory negligence explained
if D can show damage/loss was partly due to claimants fault, damages will be reduced by court in proportion to degree of fault
Volenti non fit injuria explained
where claimant voluntarily agrees to undertake legal risk of loss or damage at their own expense.
Exclusion clauses explained
where there is an agreement between parties containing a provision seeking to exclude or limit liability for negligence, may be subject to UCTa if it relates to business liability for death or personal injury it will be void.
Other damages subject to reasonable test
What are damages for negligence intended to do
Put the claimant in the same position they would have been had they not suffered any loss. they will not be recovered to the extent that they are considered to be too remote
T/F
When a person commits a tort with the intention of causing loss or harm that results from the wrongful act, that loss can never be too remote
True
When is a loss too remote
unless it can be said that the type of damage that actually did occur was reasonable and foreseeable
The Wagon Mound 1961
Ship taking oil in Sydney Harbour, due to negligence oil spilled and drifted into wharf where welding equipment was being used. Owner carried on working as advised unlikely that sparks would set fire to furnace oil, spark fell on cotton waste floating on oil, starting fire
Held that claim must fail, pollution foreseeable, fire not
Vicarious liability explained
legal liability that may be imposed on a person even though they are free from blame and in addition to the personal liabilities of the other person who committed the tort
T/F
Partners in an ordinary partnership may be vicariously liable for the tortious acts of their fellow parters where they are committed in furtherance of the partnership business
True
Two requirements to establish vicarious liability
wrongdoer must be an employee not independent contractor
employee must have been acting in the course of their employment
key issue employee/independent contractor tort
whether employer has control over what that person does, how they do it and whether employee is integral to the business
t/f
employer will only be liable for torts committed by an employee in the course of their employemnt
True
Lister and others v Hesley Hall 2001
Warden of boarding school found guilty of sexually abusing children resident there
held that the school was vicariously liable, the wardens work created a sufficient connection between abuse and work employed to do
Dubai Aluminium Co v Salaam and others 2002
Solicitor drafted bogus agreement
held drafting agreements of this nature but for proper purpose within ordinary course of business, dishonest acts were sufficiently closely connected to the course of business for employers to be vicariously liable
Attorney General v Hartwell 2004
Police constable in British virgin islands on duty when went to restaurant where partner was waitress. fired shots at her and mail companion, one hit British tourist who was injured.
Held attorney general was not vicariously liable, as acts of policeman were not part of job, but was pursuing a personal vendetta
T/F
Principal is vicariously liable for a tort committed by An agent acting within the limits of their authority and carrying outs act for which they were appointed as agent
True
Ormrod v Crossville Motor Services 1953
Car owner asked friend to drive car to Montecarlo where owner was going to take place in rally and they were going on holiday after rally, friends negligent driving damaged Claimants bus
owner was vicariously liable for friends negligence was irrelevant friend driving to MC partly for own purpose
Matters to be considered by court in considering cases of professional negligence
purpose for which statement made and communicated
relationship between parties
size of class recipient belonged to
state of knowledge of the maker
reliance by recipient
whether professional assumed responsibility
