Documente Academic
Documente Profesional
Documente Cultură
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
LAW OF TORT
Page 1
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
(a) The defendants were held to owe a duty to take care in the advice
or information that they gave
(b)That duty extended to purely economic losses.
a claimant who suffers loss by relying on inaccurate statements could and
can bring a claim in the tort of deceit but in 1889 the House of Lords had
held that to establish liability in that tort the claimant had to prove that
the defendants either knew that what they were saying was false or were
reckless as to whether what they were saying was true or false.
It was assumed until 1964 that the result of Derry v Peek(1889) LR 14 App
Cas 337 was that there could be no liability where the defendant had not
lied or been reckless, but had merely spoken carelessly. The Hedley Byrne
case put an end to that view.
3.1.2. Distinction between
Page 2
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
The general common law rule was that a defendant was not liable for
purely economic loss1. It is helpful to consider the policy reasons that
restrict the right of recovery for economic loss. Many of these are
developed and applied in the cases that follow:
physical interests.
If economic loss generally is recoverable, the burden on particular
defendant will be unbearably high.( imagine that the defendant
carelessly pollutes a holiday beach. Holiday makers stay away. All
business interest in the town suffer losses. Is the defendant to have
apply
Claimant can often make good their economic loss in other ways
than by claiming compensation : for example, if a factory has to shut
down because of loss of power, it may be possible to make up for
potential defendants to insure against economic losses that they
may cause.
It may make more sense for potential claimants to insure against
possible economic losses that they may suffer
rather than
for
This principle is illustrated by Simpson & Co v Thomson(1877) LR 3 App Cas 279 and
Candler v Crane , Christmas[1951] 2 KB 164
LAW OF TORT
Page 3
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
No action would lie for a negligent statement causing pure economic loss.
This rule was restated by the Court
Page 4
[LESSON
THREE
NEGLIGENCE
: [2012
]
SPECIAL PROBLEMS]
responsibility.
The
House
of
Lords
held
that
in
appropriate
statements
of
and , in
in cases of
particular,
The
The
The
The
LAW OF TORT
Page 5
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
The application of this approach has been used to determine that a duty of
care existed when an employer wrote a reference for a former
employee( Spring v Guardian Assurance[1994], when accountants failed to
detect frauds perpetrated on shareholders of overseas companies of a
bank ( BCCI v price Waterhouse[1998] and when accountants failed to
detect fraud on the part of a senior partner of a law firm such that the Law
Society compensation Fund was obliged to pay compensation to the firms
clients( Law Society v KPMG Peat Marwick[2000].
3.2.2 Assumption of Responsibility
3.2 Liability for Psychiatric Injury
The law adopts a restrictive approach in awarding damages for negligently
inflicted psychiatric injury. In addition to the Caparo test for imposing a
duty of care, the courts have laid down several obstacles which must be
satisfied by claimants in order to establish liability. Firstly there must be
an actual psychiatric injury, mere emotions of fear, worry, grief or sorrow
are not sufficient:
Where the claimant injuries are psychiatric , and not physical, damages
are recoverable only in exceptional circumstances
. it is not enough to
LAW OF TORT
Page 6
[LESSON
THREE
SPECIAL PROBLEMS]
NEGLIGENCE
: [2012
]
Page 7
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
serious injury to someone else. The principle are derived from two
decisions of the House of Lords :
Mc Loughlin v OBrian[1983] where the Claimants husband and her
three children were involved in a road accident caused by the defendants
negligence. One child was killed and her husband and the other children
were badly injured. The claimant was told about the accident an hour or so
after it had happened and she was taken to the hospital where she saw
the injuries to her family and suffered nervous shock. It was held that the
claimant could recover damages for her nervous shock.
Alcock v Chief Constable of South Yorkshire Pollice [1992] 1 AC
310
This case arose from the events of the Hillsborough disaster in which 95 people
were crushed to death at a football match due to the negligence of the police. The
claim was made by relatives of the victims who had each suffered psychiatric
injury as a result of witnessing the disaster. Some were present at the grounds ,
some were watching television, some heard about it more indirectly. They were
related in different ways to those who died. The Law lord unanimously dismissed
their appeals. Their lordship held that two test must be satisfied:
LAW OF TORT
Page 8
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
The claimant must not have some special sensitivity to shock; the
shock must be foreseeable in a person of reasonable fortitude ( but,
so long as some psuchiatric injury is foreseeable, its precise form or
severity does not have to be foreseen).
LAW OF TORT
Page 9
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
House of Lords
Mr Stovin suffered serious injuries when he was knocked off his motorcycle
by a car driven by Mrs Wise. She had pulled out of a junction in which
visibility of traffic was hampered due to a bank of earth which was topped
by a fence. The trial judge held that Mrs Wise was 70% to blame for the
accident and that Norfolk County Council were 30% to blame because they
knew the junction was dangerous and had been negligent in not taking
steps to make it safe. The Council appealed.
Held:
The council were not liable as liability related to an omission. There had
only been three accidents in twelve years which was not enough to render
the junction a 'cluster site' under the Council's policy for prioritising
funding which required five accidents in three years.
Lord Hoffman on imposing liability for omissions:
There are sound reasons why omissions require different treatment from
positive conduct. It is one thing for the law to say that a person who
undertakes some activity shall take reasonable care not to cause damage
to others. It is another thing for the law to require that a person who is
doing nothing in particular shall take steps to prevent another from
suffering harm from the acts of third parties or natural causes.
Thus, a person who sees a child drowning in shallow water, is not under a
legal obligation to save the child and will incur no liability for their failure
to do so. If, however, the person attempts to save the child, but in doing
so, acts carelessly and causes harm, they become liable. This rule can be
LAW OF TORT
Page 10
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
Page 11
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
to
of danger to
duty owed. Lord Goff said that although there was no duty to prevent
persons deliberately inflicting damage on another person,
Haynes v Harwood [1935] 1 KB 146
The Defendant left a horse-drawn van unattended in a crowded street. The
horses
bolted when a boy threw a stone at them. A police officer tried to stop the
LAW OF TORT
Page 12
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
horses to save a woman and children who were in the path of the bolting
horses. The police officer was injured. It was held that the Defendant owed
a duty of care as he had created a source of danger by leaving his horses
unattended in a busy street.
3.4 The Liability of inspectors and other regulators
Many recent cases have concerned the duties of those who carry out
inspecting, supervising, regulatory and licensing functions. These people
do not normally themselves cause harm, but they have an opportunity to
prevent harm being done by others. Is the
Page 13
[LESSON
THREE
NEGLIGENCE
SPECIAL PROBLEMS]
: [2012
]
a) They are set up for the purpose of protecting the public or a section
of it
b) It is clearly foreseeable that harm may be suffered if the supervisory
or regulatory work is carelessly done
c) In some cases the imposition of liability in tort on a regulator may
LAW OF TORT
Page 14