Negligent Misstatement

Question 1

Introduction

Answer 1

C may have a claim of negligent misstatement. Generally the law doesn’t allow claims for pure economic loss (Weller) but Hedley Byrne held that C can sue for negligent misstatement where there is a special relationship. The ordinary rules in Caparo for proximity are modified.

Question 2

2. Hedley Byrne

Answer 2

Here some harm (economic loss) is reasonably foreseeable to someone in C’s position as… (Hedley Byrne).

Question 3

3. Esso

Answer 3

Here D has a special skill or expertise in relation to the statement as… (Esso).

Question 4

4. Caparo

Answer 4

Here, D knows the purpose for which the advice is sought as… (Caparo).

Question 5

5. Smith

Answer 5

D knows that C is highly likely to rely on the statement as… (Smith).

Question 6

6. Henderson

Answer 6

D has voluntarily assumed responsibility for the statement as… which can indicate the existence of a duty of care (Henderson).

Question 7

7. Detriment

Answer 7

Here, C has relied on the statement to their detriment as…

Question 8

8. Reasonable

Answer 8

Lastly, C must show it was reasonable for them to rely on the statement.
•If advice has been asked and given directly it may be reasonable for them to rely on it (Goodwill).
•Giving advice in a social situation doesn’t normally give rise to liability (Hedley Byrne) but in Chaudhary advice given by a friend free of charge did give rise to liability.
•How specific was it?
•Is it reasonable for C to take independent advice (McNaughton).

Question 9

9. Hill

Answer 9

If there is foreseeability of loss and a special relationship then it’s likely to be fair, just and reasonable to impose a duty (Hill).