Outline The Principle Elements And Provide Cases Or The Test Required To Establish Uty Of Care When The Losses Are Purely Economic Flashcards
Explain the principle of duty of care
The principle of duty of care is a fundamental concept in the law of negligence, which requires individuals to take reasonable care to avoid causing harm to others. This duty of care is a key element in establishing liability for damages caused by negligence. In cases where the losses are purely economic, the courts have developed specific tests to determine whether a duty of care exists.
Outline a principle element of duty of care when the losses are purely economic
Foreseeability of harm. The first element in establishing a duty of care for purely economic losses is the foreseeability of harm. This means that the defendant should have reasonably foreseen that their actions or omissions could result in economic loss to the plaintiff.
What is the leading case for foreseeability of harm when the losses are purely economic
The leading case for this test is the decision in Hedley Byrne & Co Ltd v Heller & partners Ltd, where it was held that a duty of care could exist where a defendant provides advice or information that they know, or ought know, will be relied upon by the plaintiff to their detriment.
What is the second element in establishing a duty of care when the losses are purely economical
Proximity. Proximity is the second element which refers to the closeness of the relationship between the defendant and the plaintiff. The proximity test requires the court to consider whether the defendant had a special relationship with the plaintiff that gave rise to a duty of care.
What is the leading case for the element of proximity in duty of care when the losses are purely economical
The leading case for this test is Caparo industries v Dickman, it was held that a duty of care could exist where there was a sufficient proximity between the defendant and the plaintiff, such as professional or contractual relationship.
What is the third element for duty of care when the losses are purely economical
Policy consideration is the third element, which requires the court to consider whether it is fair, just and reasonable to impose a duty of care in the circumstances. This test is particularly relevant in cases where there is a risk of indeterminate liability or where imposing a duty of care could have a chilling effect on commercial activity.
Explain the leading case for policy considerations for duty of care when the losses are purely economic
Murphy v Brentwood district council, where it was held that a duty of care could not exist for purely economic losses caused by defective building work.
Conclusion for the three tests, foreseeability of harm, proximity and policy considerations for the duty of care when the losses are purely economic
Overall, these tests provide a framework for establishing a duty of care in cases where the losses are purely economic. The courts will consider all three elements to determine whether a duty of care exists in the circumstances of each case
