Semester 2 Exam Case Law Flashcards
Contractual Capacity
As the company is a person, it can enter into contracts with persons inside and outside the company.
Lee v Lee’s Air Farming Ltd[1961] AC 12 (PC) (the workmen’s compensation case)
When he died in a crash, the question arose whether he was a ‘worker’ for the company. The Privy Council ruled that he was, establishing the principle of legal personality, where a company and its owner are separate entities. This allowed Mrs. Lee to claim compensation for her husband’s death.
A duty to act within powers
Eclairs Group Ltd v JKX Oil & Gas plc - The directors used power in the company’s articles to disenfranchise a group of shareholders, who were due to vote against the company at the upcoming AGM. The proper purpose rule would apply to provisions in the articles. Exercising the power to disenfranchise members is not a proper purpose.
A duty to promote the success of the company
Mutual Life Insurance Co of New York v Rank Organisation Ltd
shareholders claimed discrimination when Rank Organisation Ltd excluded them from a share offer. However, the court dismissed the complaint, ruling that the directors had acted in good faith and in the company’s interest, and that the shareholders’ rights had not been affected.
Duty to exercise reasonable care, skill, and diligence
- Re Barings plc
Barings Bank collapsed due to the activities of a rogue trader. Disqualification proceedings were brought against three former directors based in London for serious management failures
Duty to avoid conflicts of interest
Bhullar v Bhullar
established that directors must avoid conflicts of interest, particularly regarding corporate opportunities. A director bought an adjacent property without informing the company, breaching his duty to communicate opportunities
Wrongful trading and fraudulent trading
Lifting the corporate veil – Prest v. Petrodel Resources Ltd.
It confirmed the principle of corporate personality but allowed piercing the corporate veil in limited circumstances, such as when assets are held on trust
Wrongful trading
Re Produce Marketing Consortium Ltd
The directors were held liable for wrongful trading, as they should have realized the company’s liquidation was unavoidable
Duty of Care
Donoghue v Stevenson (1932, HL)
Claimant became ill after drinking ginger beer with a snail at the bottom. Her friend had bought the drink, so had no contract with the café.
Established that every person owed a duty of care to his ‘neighbour’ who was somebody that a person could reasonably foresee would be injured by his acts or omissions
Three stage test for establishing ‘duty of care’:
- Was the harm or loss caused reasonably foreseeable?
(Margereson v JW Roberts (1996) pulmonary illness - asbestos)
The court ruled that the defendant, owner of an asbestos factory, should have foreseen the risk of pulmonary injury due to asbestos dust exposure. This ruling held the company liable
Three stage test for establishing ‘duty of care’:
- Was there a sufficient relationship of proximity between the claimant and the defendant for a duty to be imposed?
West Bromwich Football Club Ltd. v El-Safty (2006) – football club- doctor proximity
The court ruled that Mr. El-Safty, who treated a player from West Bromwich Albion Football Club, did not owe a duty of care to the club and no contract existed between them. This reinforced the principle that a doctor’s primary duty of care is to the patient, not the employer
Three stage test for establishing ‘duty of care’:
- In all circumstances is it fair, just, and reasonable that the law should impose a duty on the defendant?
(Robinson v Chief Constable of West Yorkshire Police (2018)
This case clarified the police’s liability to the public. An elderly woman was injured by police officers during an arrest attempt. The court ruled that the police owed her a duty of care, applying ordinary negligence principles, and rejected any special police immunity
2nd Element: Breach of Duty
No allowance is made for the defendant’s particular level of experience/ resources/ competence
(Nettleship v Weston (1971)
a learner driver crashed during a lesson, injuring the instructor. The court ruled that learner drivers should meet the same standard of care as qualified drivers.
Exceptions to standard of the “reasonable person”:
- children depending on age
Orchard v Lee_
a school dinner lady was injured when a 13-year-old boy ran into her while playing tag. She sued for negligence. The court ruled that the boy, behaving as a typical child of his age, had not breached his duty of care
Exceptions to standard of the “reasonable person”:
- professional depending on profession
Phillips v Whiteley Ltd
a woman’s ears were pierced by a jeweller, leading to an infection. The court ruled that the jeweller was not liable as they were not expected to meet the standard of a surgeon. The standard of care was that of a jeweller performing such work
The courts may use a form of “cost-benefit analysis”
1. The probability of harm
- The probability of harm (Bolton v Stone)
a cricket ball from a nearby field injured a woman outside her home. The court ruled the cricket club was not negligent, considering the low likelihood of harm
The courts may use a form of “cost-benefit analysis”
- The potential seriousness of the damage
(Paris v Stepney Borough Council)
a one-eyed garage worker was blinded in his remaining eye due to a workplace accident. The court ruled that the employer was negligent for not providing safety goggles, considering the worker’s known vulnerability
The courts may use a form of “cost-benefit analysis”
- The practicality/cost of protection – cost of avoiding harm is not disproportionate- easier to take precautions
(Latimer v AEC Ltd)
factory worker slipped on a flooded floor, injuring his ankle. The court ruled that the employer, AEC Ltd, had taken all reasonable precautions to minimise risk, including mopping up and spreading sawdust, and was not negligent
The courts may use a form of “cost-benefit analysis”
4. The potential benefits of the risk - reasonable risks during emergency situation
(Watt v Hertfordshire County Council)
a fireman was injured when a heavy jack fell on him during an emergency rescue. The court ruled the council was not negligent, considering the urgency of the situation, the high social utility of saving a life, and the relatively low risk of injury
Proving the Breach of Duty
Ward v Tesco Stores (1976) – yoghurt spilled on the floor of the store)
the court applied the doctrine of res ipsa loquitur, ruling that the accident was more likely due to negligence than anything else. The burden of proof was on Tesco to show the spill hadn’t been there long enough to be dealt with
3rd Element: Causation
Factual Causation
(Chester v Afshar (2004)
The doctor had failed to inform her of a small risk associated with the surgery. The court ruled that even though the patient might have consented to the surgery at some point, the doctor was liable for not informing her of the risks
3rd Element: Causation
Multiple causes:
(McGhee v National Coal Board)
worker contracted dermatitis after his employer failed to provide washing facilities, causing prolonged exposure to brick dust. The court ruled that the employer’s negligence materially increased the risk of the worker developing dermatitis, satisfying causation
Remoteness of Damage
he Wagon Mound (no.1) (1961)
It involved an oil spill from a ship, leading to a fire when the oil was ignited. The court ruled that the defendant was not liable for damages that were not reasonably foreseeable
Remoteness of Damage and the Eggshell Skull Principle
Smith v Leech Brain
an employee suffered a burn that led to cancer due to a pre-existing condition. The court applied the “eggshell skull” rule, holding the employer liable for all consequences of their negligence, regardless of the victim’s vulnerability
Contributory negligence
Froom v Butcher – failure to wear a seatbelt – damages reduced by 20 per cent
Consent
(Smith v Baker (1891) – defence of consent failed – drilling holes in a quarry –injured by the stone above
Illegality
(Ashton v Turner (1980) –. The court dismissed the claim, stating that one participant in a crime does not owe a duty of care to another
the multiple test
Ready Mixed Concrete v Minister of Pensions and National Insurance (1968)
The court found that the driver had enough freedom in performing his duties, such as choosing the vehicle and managing fuel, which indicated he was an independent contractor, not an employee
The application of the Ready Mixed Concrete criteria
Warner Holidays Ltd v Secretary of State for Social Services (1983)
This case concerned the status of some entertainers who worked at a holiday camp for the summer season, developed the economic reality test and they were deemed as employees, not ICs
Potentially fair reasons for dismissal: Redundancy
The case of Murray v Foyle Meats (2000) gives the test for redundancy:
- Has the employee been dismissed?
- Has there been a reduction in the need for employees to do the particular kind of work?
- Is the dismissal wholly or mainly because of this reduction?
Dismissal for Gross misconduct
Burchell v British Home Stores (1980)
- The employer believed the employee was guilty
- The employer had reasonable grounds for believing that
- The employer had carried out as much investigation as possible in the circumstance
Age
O’reilly v BBC - won her age discrimination claim after being dropped from the show when it moved to a prime-time slot. The tribunal upheld her claims for age discrimination and victimisation
Disability
Environmental Agency v Donnelly (2013) – parking place
The Employment Tribunal found the Environmental Agency guilty of discrimination for not providing a parking space, harassment via email, and unfair dismissal.
Pregnancy and Maternity
South West Yorkshire Partnership NHS Foundation Trust v Jackson (email about potential redundancy not accessible by the person on mat leave)
Religion or belief
R v Registrar General of Births, Deaths and Marriages (2013)
wished to marry in a Church of Scientology chapel. The court ruled that the chapel could be recorded as a “place of meeting for religious worship”
Sex
English v Thomas Sanderson Blinds Ltd (stereotypes – homophobic comments – harassment)
Direct discrimination
Amnesty International v Ahmed (2009) – Sudanese woman denied a position due to her ethnic origin (researcher for Sudan – conflict of interest)
Indirect discrimination
London Underground Ltd v Edwards
Edwards, a single parent and train driver, claimed indirect sex discrimination when London Underground changed its rostering system
