Chapter 5 - Negligence

Question 1

What is a tort?

Answer 1

A civil wrong and covers situations where damage has been incurred but where there is no pre-existing contractual relationship.

E.g. Assault

Question 2

What is the limitation period to bring an action in tort?

Answer 2

6 years from suffering damage as a result of the
tortious act (or 3 years for personal injury)

Question 3

In tort, what does the award reflect?

Answer 3

Position person would’ve been in if the tort had not happened.

Question 4

What is the tort of negligence?

Answer 4

Duty of care was owed
Duty of care was breached
Damage resulted
Damage was not too remote

Question 5

What are the 4 tests in relation to whether or not a duty of care exists?

Answer 5

Reasonably foreseeable

Proximity

Fair, just and reasonable

Public policy

Court essentially looking at relationship between claimant and defendant in context of damage suffered

Question 6

Where does the Res ipsa loquitur (the facts speak for themselves) rule apply?

Answer 6

Cause of damage is unknown

Damage would not have arisen without the defendant’s lack of care

Claimant must show that the thing which caused the damage was under the management and control of the defendant.

Question 7

What are the principles developed by case law to test the standard of care?

Answer 7

• Particular skill
• Lack of skill
• No hindsight
• Body of opinion
• Advantage and risk
• Emergency
• Vulnerability

Question 8

What is the but for test?

Answer 8

Proof of causation

Question of fact

Would the damage have occurred “but for” the negligent act?

Remoteness of damage will be considered by the courts

Question 9

What factors have the greatest significance in a negligence case?

Answer 9

Purpose
Relationship
State of knowledge
Whether responsibility was assumed

Question 10

How does an auditor commit an offence under the Companies Act 2006?

Answer 10

If he recklessly causes an auditor’s report to contain any matter that is misleading or false to a material extent

Punishable by fine

Question 11

What happens to Any provision which exempts an auditor of a company (to any extent) from, or indemnifies him against, liability for negligence (among other things) in relation to providing audited accounts?

Answer 11

Made void

Save for an indemnity for costs against successfully defending proceedings or where liability limitation agreement applies

Question 12

Can a company enter int a liability limitation agreement with an auditor?

Answer 12

Yes

Limits liability
for negligence (among other things) in the course of auditing accounts to a fair and reasonable amount

Question 13

What is contributory negligence?

Answer 13

Damage or loss suffered was partly due to the claimant’s fault

Claimant’s damages will be reduced by the court in proportion to his degree of fault.

Question 14

What does Volenti non fit injuria mean?

Answer 14

‘to a willing person no injury is done’

Claimant voluntarily agrees to undertake the legal risk of loss or damage at their own expense

Where UCTA applies, volenti cannot be raised

Question 15

What are exclusion clauses?

Answer 15

Apply where there is an agreement between the parties that contains a provision seeking to exclude or limit liability for negligence, subject to UCTA

Question 16

What is the intention of damages for negligence?

Answer 16

Intended to put the claimant in the same position he would have been in if had he not suffered any loss.

Question 17

What is vicarious liability?

Answer 17

Legal liability that may be imposed on a person even though they are free from blame

In addition to personal liability

E.g. employers/employees

Question 18

How is a partnership vicariously liable?

Answer 18

A partnership is liable for any wrongful act or omission of any partner acting in the ordinary course of the business of the firm

with the authority of his co-partners which causes loss or injury to another person

Question 19

How much are the measures of damages in contract?

Answer 19

Amount which puts claimant in position they would’ve been in had contract been performed

Question 20

What is the landmark case related to duty of care?

Answer 20

Donoghue v Stevenson

House of lords determined that every person owes a duty of care to their neighbour

Question 21

What is the definition of a neighbour?

Answer 21

Persons so closely indirectly affected by my act that I ought reasonably to have them in contemplation as being so effected

Question 22

How was the neighbour principle refined in 1964?

Answer 22

Refined to require a special relationship would be enough in pure economic loss arising from a negligent misstatement

Question 23

What are the 3 elements a claimant needs to prove in an action for negligence?

Answer 23

Duty of care exists

Breach of duty of care

Loss caused by breach

Question 24

When is compensation required?

Answer 24

If a person has suffered an actual loss, injury, damage or harm as a consequence of other’s actions

Question 25

Is consequential or pure economic loss more readily recoverable?

Answer 25

Consequential

Reluctance of courts to permit recovery of pure economic loss is due to difficulties and cost in insuring against the liability

Question 26

Will courts allow recovery of a loss that is considered too remote or too far down the chain of causation?

Answer 26

No, even if loss suffered is as a result of defendant’s breach of duty

Question 27

Does a pro adviser acting in a pro/expert capacity owe a duty of care in addition to contractual commitments?

Answer 27

Potentially

Means a potential liability in tort if their statement/advice is negligently made

Question 28

In negligence cases, what is the decisive issue?

Answer 28

Whether or not defendant owed a duty of care

Question 29

What did the house of commons determine in the Hedley Byrne case?

Answer 29

Where someone possesses a special skill that someone else relies on, a duty of care will arise

Special relationship created between parties, duty of care exists

Question 30

Will a pro be liable for advice given informally or on a social occasion?

Answer 30

No, must be given as part of a business of giving pro advice

Question 31

What did the house of lord decide in the Caparo case?

Answer 31

Reason for annual accounts was to enable shareholders to exercise their rights, not for investment purposes

Principle extents to situations where individual relies on annual audited accounts, unknown to pro who prepared them

Question 32

Do preparing statements for general circulation give rise to a duty of care?

Answer 32

No

Question 33

When are professionals likely to owe a duty of care?

Answer 33

If they provide info to a particular person in the knowledge that they will rely on it

Question 34

What happened in the Bannerman case?

Answer 34

3rd party can be owed a duty of care where auditors know identity and 3rd party intends to rely on it

Question 35

Is it perfectly reasonable for auditors to avoid liability via disclaimer?

Answer 35

Yes

Question 36

Can an accountancy firm be liable?

Answer 36

Yes, if it was forseeable that an adverse accountant’s report could result in intervention by the Law Society

Question 37

What was determined as a result of the De Sena v Notaro case?

Answer 37

Accountants did now owe the claimant a fiduciary duty as they advised the claimant to seek independent advice, which claimant didn’t do,

no liability or negligence

Question 38

Based on case law, is there an overriding principle that can be applied to every case?

Answer 38

No

Question 39

What are the 3 defenses to negligence?

Answer 39

Contributory negligence

Volenti non fit injuria

Exclusion clauses

Question 40

If damages be recovered if too remote?

Answer 40

Loss never too remote if a tort is committed with the intention of causing a loss/harm

Loss too remote unless reasonably forseeable

Question 41

What are the 2 ways in which a person may be liable in tort?

Answer 41

Commit a tort

Vicariously if employee/agent commits a tort

Question 42

What does vicarious liability allow an innocent tort victim to do?

Answer 42

Have recourse against a party who is more financially able to pay damages than the person who committed the tort

E.g. employer more likely to be able to pay damages than employee

Question 43

When will employers be liable for torts committed by an employee?

Answer 43

Only liable in the course of their employment

Question 44

When is a principal vicariously liable?

Answer 44

For a tort committed by an agent acting within the limits of their authority and carrying out acts for which they were appointed as agent

Question 45

When does the vulnerability of the claimant matter?

Answer 45

Only if the defendant knew

Question 46

If someone is underqualified, what standard of care is expected of them?

Answer 46

That of someone reasonable

Question 47

Can an auditor be excluded from potential liability in tort?

Answer 47

No

Question 48

What 2 factors are taken into account by the courts when deciding whether there is a duty of care of not?

Answer 48

Purpose of statement made

Just and equitable to impose a duty of care

Question 49

When deciding if a professional is liable to a negligence claim, what won’t the courts consider?

Answer 49

Knowledge and general practice

Question 50

Do the manner and extent of the loss matter when claiming for negligence?

Answer 50

No

Question 51

What will the court consider when hearing a pro misstatement case?

Answer 51

Special skill of the defendant

Whether the defendant knew that their advice would be relied upon

Question 52

When there is a breach of duty of care, will emergency circumstances be taken into account?

Answer 52

Yes

Question 53

When an agency worker commits a negligent offence, who is liable?

Answer 53

Agent worker’s employer

Agency company who hired the worker

Question 54

Does vicarious liability apply to individual contractors?

Answer 54

No

Independent contactor liable for negligent work