Chapter 5 - Negligence Flashcards
What is a tort?
A civil wrong and covers situations where damage has been incurred but where there is no pre-existing contractual relationship.
E.g. Assault
What is the limitation period to bring an action in tort?
6 years from suffering damage as a result of the
tortious act (or 3 years for personal injury)
In tort, what does the award reflect?
Position person would’ve been in if the tort had not happened.
What is the tort of negligence?
Duty of care was owed
Duty of care was breached
Damage resulted
Damage was not too remote
What are the 4 tests in relation to whether or not a duty of care exists?
Reasonably foreseeable
Proximity
Fair, just and reasonable
Public policy
Court essentially looking at relationship between claimant and defendant in context of damage suffered
Where does the Res ipsa loquitur (the facts speak for themselves) rule apply?
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.
What are the principles developed by case law to test the standard of care?
- Particular skill
- Lack of skill
- No hindsight
- Body of opinion
- Advantage and risk
- Emergency
- Vulnerability
What is the but for test?
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
What factors have the greatest significance in a negligence case?
Purpose
Relationship
State of knowledge
Whether responsibility was assumed
How does an auditor commit an offence under the Companies Act 2006?
If he recklessly causes an auditor’s report to contain any matter that is misleading or false to a material extent
Punishable by fine
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?
Made void
Save for an indemnity for costs against successfully defending proceedings or where liability limitation agreement applies
Can a company enter int a liability limitation agreement with an auditor?
Yes
Limits liability
for negligence (among other things) in the course of auditing accounts to a fair and reasonable amount
What is contributory negligence?
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.
What does Volenti non fit injuria mean?
‘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
What are exclusion clauses?
Apply where there is an agreement between the parties that contains a provision seeking to exclude or limit liability for negligence, subject to UCTA
What is the intention of damages for negligence?
Intended to put the claimant in the same position he would have been in if had he not suffered any loss.
What is vicarious liability?
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
How is a partnership vicariously liable?
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
How much are the measures of damages in contract?
Amount which puts claimant in position they would’ve been in had contract been performed
What is the landmark case related to duty of care?
Donoghue v Stevenson
House of lords determined that every person owes a duty of care to their neighbour
What is the definition of a neighbour?
Persons so closely indirectly affected by my act that I ought reasonably to have them in contemplation as being so effected
How was the neighbour principle refined in 1964?
Refined to require a special relationship would be enough in pure economic loss arising from a negligent misstatement
What are the 3 elements a claimant needs to prove in an action for negligence?
Duty of care exists
Breach of duty of care
Loss caused by breach
When is compensation required?
If a person has suffered an actual loss, injury, damage or harm as a consequence of other’s actions
Is consequential or pure economic loss more readily recoverable?
Consequential
Reluctance of courts to permit recovery of pure economic loss is due to difficulties and cost in insuring against the liability
Will courts allow recovery of a loss that is considered too remote or too far down the chain of causation?
No, even if loss suffered is as a result of defendant’s breach of duty
Does a pro adviser acting in a pro/expert capacity owe a duty of care in addition to contractual commitments?
Potentially
Means a potential liability in tort if their statement/advice is negligently made
In negligence cases, what is the decisive issue?
Whether or not defendant owed a duty of care
What did the house of commons determine in the Hedley Byrne case?
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
Will a pro be liable for advice given informally or on a social occasion?
No, must be given as part of a business of giving pro advice
What did the house of lord decide in the Caparo case?
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
Do preparing statements for general circulation give rise to a duty of care?
No
When are professionals likely to owe a duty of care?
If they provide info to a particular person in the knowledge that they will rely on it
What happened in the Bannerman case?
3rd party can be owed a duty of care where auditors know identity and 3rd party intends to rely on it
Is it perfectly reasonable for auditors to avoid liability via disclaimer?
Yes
Can an accountancy firm be liable?
Yes, if it was forseeable that an adverse accountant’s report could result in intervention by the Law Society
What was determined as a result of the De Sena v Notaro case?
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
Based on case law, is there an overriding principle that can be applied to every case?
No
What are the 3 defenses to negligence?
Contributory negligence
Volenti non fit injuria
Exclusion clauses
If damages be recovered if too remote?
Loss never too remote if a tort is committed with the intention of causing a loss/harm
Loss too remote unless reasonably forseeable
What are the 2 ways in which a person may be liable in tort?
Commit a tort
Vicariously if employee/agent commits a tort
What does vicarious liability allow an innocent tort victim to do?
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
When will employers be liable for torts committed by an employee?
Only liable in the course of their employment
When is a principal vicariously liable?
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
When does the vulnerability of the claimant matter?
Only if the defendant knew
If someone is underqualified, what standard of care is expected of them?
That of someone reasonable
Can an auditor be excluded from potential liability in tort?
No
What 2 factors are taken into account by the courts when deciding whether there is a duty of care of not?
Purpose of statement made
Just and equitable to impose a duty of care
When deciding if a professional is liable to a negligence claim, what won’t the courts consider?
Knowledge and general practice
Do the manner and extent of the loss matter when claiming for negligence?
No
What will the court consider when hearing a pro misstatement case?
Special skill of the defendant
Whether the defendant knew that their advice would be relied upon
When there is a breach of duty of care, will emergency circumstances be taken into account?
Yes
When an agency worker commits a negligent offence, who is liable?
Agent worker’s employer
Agency company who hired the worker
Does vicarious liability apply to individual contractors?
No
Independent contactor liable for negligent work
