Chapter 5 - Negligence Flashcards

1
Q

What is a tort?

A

A tort is a civil wrong and covers situations where damage has been incurred but where there is no pre-existing contractual relationship (i.e assault, false imprisonment, trespass, nuisance)

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2
Q

What type of tort are we concerned with in this course?

A

The tort of negligence

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3
Q

What may the terms ‘negligence’ or ‘negligent’ refer to?

A

The terms ‘negligence’ and ‘negligent’ may refer to the careless way in which an act is carried out, or to the tort which arises when a person is in breach of a legal duty of care that they owe to another, thereby causing that person harm or loss.

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4
Q

What is the limitation period (during which an injured party must take proceedings) from the damage caused by the tortious act being suffered?

A

Six years from the damaged caused by the tortious act being suffered (or three years in the case of personal injury).

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5
Q

What elements make up a tort of negligence? (4)

A
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6
Q

What is meant by duty of care?

A

Duty of care is a legal obligation to act in a certain way towards others, in accordance with certain standards.

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7
Q

What are the tests to decide whether or not a duty of care exist? Define each (4)

A
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8
Q

Who’s responsibility is it to prove that there is a breach of duty of care?

A

Whether or not there has been a breach of duty is a question of fact to be shown by the claimant against the defendant

Except where Res ipsa loquitur (‘the facts speak for themselves’) applies

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9
Q

What are the seven principles established regarding the standard of care needed to satisfy the duty of care?

A
  1. Particular skill - a professional performing a duty, their actions are expected to reflect the skills and knowledge typical of their profession or role (i.e. a surgeon is held to a higher standard than a layperson because of their specialized medical training)
  2. Lack of skill - lacking in skills or necessary training of the defendant are not relevant
  3. No hindsight - rely on the knowledge and general practice at the time of the act
  4. Body of professional - an individual’s actions or decisions should align with the generally accepted professional opinion or practices within their field.
  5. Advantage and risk - these must be reasonably balanced
  6. Emergency - thIn emergency situations, the standard of care may be adjusted based on the urgency and the circumstances at hand (the reasonable man test is applied to the particular situation)
  7. Vulnerability - higher standard of care is owed to protect the sight of a worker who was blind in one eye as an injury to his good eye would blind him
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10
Q

What does the claimant need to prove to succeed in an action for negligence?

A

To succeed in an action for negligence, the burden of proof is on the claimant to prove, on a balance of probabilities, that:

– the defendant owed a duty of care to the claimant to avoid causing injury, damage or loss

– there was a breach of that duty by the defendant

– in consequence the claimant suffered injury, damage or loss

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11
Q

What is res ipsa loquitur? Who bears the burden of proof in proving breach of negligence in these situations?

A

‘The facts speak for themselves’ - the principle that the mere occurrence of some types of accident is sufficient to imply negligence

The court will infer that the defendant was in breach of the duty of care and therefore it is the defendants responsibilty to prove that the cause of the damage was not due to their negligence

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12
Q

Under what circumstances will a person be compensated regarding loss caused by a breach fo a duty of care?

A

A person will only be compensated if they have suffered actual loss, injury, damage or harm as a consequence of another’s actions

This will be for financial loss directly connected to such injury (for example, loss of earnings) or property damage (consequential economic loss) - not usually pure economic loss

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13
Q

Under what circumstances allow for recovery of pure economic loss?

A

Where there is a special relationship between the parties

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14
Q

When may professional/expert advisors owe a duty of care in addition to their contractual obligations?

A

Where an adviser (such as an accountant, banker, solicitor or surveyor) makes a statement in some professional or expert capacity, where it is likely that others would rely on what they said, then they may owe a duty of care in addition to their contractual commitments.

However, they will not be liable for advice given informally or on a social occasion.

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15
Q

Outline the Hedley Byrne & Co Ltd v Heller and Partners Ltd 1963 case and what conclusions can we draw from it

A

The facts: C was an advertising agent acting for a new client, Easipower Ltd. C requested information from Easipower’s bank, D, on its financial position. D returned non-committal replies, which expressly disclaimed legal responsibility, and which were held to be a negligent misstatement of Easipower’s financial resources.

Decision: While D was able to avoid liability by virtue of its disclaimer, the House of Lords went on to consider whether there ever could be a duty of care to avoid causing financial loss by negligent misstatement where there was no contractual or fiduciary relationship. It decided that, had it not been for the disclaimer, D would have been liable for negligence, having breached the duty of care, because a special relationship did exist.

In reaching the decision in Hedley Byrne, Lord Morris said the following: ‘If someone possessed of a special skill undertakes….to apply that skill for the assistance of another person who relies on that skill, a duty of care will arise….If, in a sphere in which a person is so placed that others could reasonably rely on his skill….a person takes it on himself to give information or advice to….another person who, as he knows or should know, will place reliance on it, then a duty of care will arise.’

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16
Q

What must we consider regarding duty of care and special relationships with the situation of preparing accounts for general circulation?

A

Preparing or auditing fianancial accounts purely for general circulation, are to enable the shareholders to exercise their rights in respect of the management of the company and not to give advice on the merits of further investment in the company.

Only a duty of care is imposed on the accountants or auditors with respect to the shareholders as they have the special relationship, no third party users of the accounts are owed a duty of care

17
Q

Under what circumstances are third party users of accounts owed a duty of care?

A

A third party can be owed a duty of care if the accountant or auditor knows:
* the identity of the third party
* how the accounts would be used
* that the third party intends to rely on the accounts (i.e. for takeover)

18
Q

What must we consider regarding duty of care and special relationships with the situation of preparing accounts for the purposes of a takeover?

A

If at any time during the assignment (i.e. even just before the audit report is signed) it was made known to the auditor/accountant:
* the identity of the bidder
* that the bidder intended to rely on the accounts
* that express representations had in fact been made to the bidder by the defendant.

Then the accountant/auditor may owe the bidder a duty of care

19
Q

What must we consider regarding duty of care and special relationships with the situation of preparing accounts where htere is an inteded use by a third party aside from takeover bids?

A

If it is reasonably foreseeable that the claimant (who could be identified and was not one of a large class of recipients) would rely on the accounts then the accountants/auditors may owe a duty of care to the third party user of the accounts

20
Q

What are eight important factors regarding duty of care?

A
  1. The purpose for which the statement is made and communicated
  2. The relationship between the professional, the recipient and any relevant third party
  3. The state of knowledge of the professional
  4. Whether the professional could be said to have assumed responsibility to the claimant
  5. The size of any class to which the recipient belonged
  6. Whether the third party was identified and known to the professional
  7. The extent of reliance by the claimant and whether that was foreseeable
  8. Whether it is fair and equitable (and not an offence to public policy) to impose a duty of care
21
Q

Is it an offence under the Companies Act regarding auditors who recklessly cause an auditor’s report to contain any matter that is misleading or false to a material extent.

A

Yes.

Such an offence is punishable by a fine.

22
Q

What are two provisions of the Companies Act relevant to the question of professional liability?

A
  1. Any provision which exempts an auditor of a company (to any extent) from, or indemnifies them against, liability for negligence (among other things) in relation to providing audited accounts is void - can’t excuse yourself from complete liability
  2. A company may enter into a liability limitation agreement with an auditor, limiting their liability for negligence (among other things) in the course of auditing accounts to a fair and reasonable amount,
23
Q

What are the defences that can be used against an accusation of breach of duty of care? Define each (3)

A
  1. Contributory negligence - Where the defendant can show that the damage or loss suffered was partly due to the claimant’s fault, the claimant’s damages will be reduced by the court in proportion to their degree of fault.
  2. Volenti non fit injuria (“to a willing person no injury is done”) - This applies where the claimant voluntarily (ie, exercising free choice) agrees to undertake the legal risk of loss or damage at their own expense. Effectively it amounts to an agreement by the claimant to exempt the defendant from a duty of care which otherwise would be owed.
  3. Exclusion clauses - Where there is an agreement between the parties that contains a provision seeking to exclude or limit liability for negligence
24
Q

What is the treatment of any exclusion clause which attempts to exclude liability for negligent misstatement?

A

Any exclusion clause which attempts to exclude liability for negligent misstatement may be subject to the reasonableness test in UCTA.

25
Q

What are damages for negligence?

A

Damages for negligence are compensatory and are intended to put the claimant in the same position they would have been in had they not suffered any loss.

26
Q

What must be considered when awarding damages for negligence? Define each (2)

A
  • Damage suffered must not be too remote - losses cannot be too far removed from the wrongful act
  • The type of damage that actually did occur must be reasonably foreseeable - defendant is only liable for damages that they could have reasonably foreseen
27
Q

When can a loss from negligence never be too remote?

A

When a person commits a tort with the intention of causing loss or harm which in fact results from the wrongful act, that loss can never be too remote.

28
Q

What is vicarious liability?

A

Vicarious liability is a legal doctrine under which one person can be held legally responsible and liable for the tortious acts of another person.

Vicarious liability is a legal liability which may be imposed on a person even though they are free from blame and in addition to the personal liability of the other person who committed the tort.

29
Q

What are the main examples of vicarious liability arising that we will look at?

A
  • Employers and employees
  • Principal and agent
30
Q

What are the two requirements to establish vicarious liability regarding employment?

A
  1. the wrongdoer (tortfeasor) must be an employee and not an independent contractor.
  2. The employee must have been acting in the course of their employment - the employee was carrying out his employment duties
31
Q

Is the employee considered acting in the course of their employment on the way to work?

A

An employee is not considered acting in the course of their employment when they are travelling to and
from work.

32
Q

Is a principle vicariously liable for a tort committed by an agent?

A

A principal is vicariously liable for a tort committed by an agent acting within the limits of their authority and carrying out the acts for which he was appointed as agent.

33
Q

Can a partnership be vicariously liable?

A

A partnership is liable for any wrongful act or omission of any partner acting in the ordinary course of the business of the firm or with the authority of their co-partners which causes loss or injury to another person