Negligence

Negligence

1. Loss

   • Physical
   • Economic

2. Elements

   • Harm not remote
     • Beware of opening floodgates
   • Duty of care
     • Relationship (degree of proximity)
       • Temporal (time) factor
         • Meah v McCreamer
           • Person got injured in car accident, changed his personality, he became a sex offender
             • Cannot be compensated for his crimes against women, nor can the women sue the person who caused the accident
       • Physical (place) / personal connection factor
         • Dorset Yacht v Home Office
     • Factors affecting judicial imposition of DOC
       • Foreseeability
       • No presumptions exist for/against
       • Judicial reasoning, law of precedent
       • Economic loss may make court less willing to impose DOC (wider scope)
       • Special relationship = more inclined to impose DOC (essential in negligent misstatement)
       • Legislative background that en/discourages imposition of DOC?
       • Contractual background
   • Breach of duty
     • Standard of care (SOC)
       • Reasonable person
       • Skill and expertise
         • Greater standard of care required if def. hold out to be experts
         • Professionals and trades people
       • Risk allocation
         • Probability of harm
           • Preventative measures may be unnecessary to avoid rare/ improbable risks
             • Bolton v Stone
               • Pl. hit by cricket ball over fence
               • No negligence since risk of injury to anyone in such a place was so remote that a reasonable person would not have anticipated it
         • Circumstances, e.g. vulnerability
           • If def. knows the pl. is particularly vulnerable then the SOC will be higher
         • Social value of the activity
           • even if DOC is found, if def. activity is of high social benefit, SOC may be held to be lower
         • Gravity of risk (more danger = more care required)
         • How practical/expensive is it to take precautions?
           • Cheaper = more likely to be required, expense may be justified if activity is so dangerous
   • Duty caused harm
     • But/for test

3. Negligent misstatement

   • Pure economic
   • Reliance
     • pl. must have relied on the statement
       • Boyd Knight v Purdue
         • Auditor's report in company prospectus. (Unlike Caparo) court said a relationship existed between auditor as professional advisor and potential investors
   • Duty of care
     • Special Relationship
       • Plaintiff in contract with def.
         • Liability in contract and negligent misstatement
       • Pl. and def. have communicated directly or indirectly
         • Liability likely
         • Dimond Manufacturing v Hamilton
       • No direct contact but def. knows pl. will rely and act on his/her advice for an immediate purpose
         • Liability likely
         • Smith v Eric S Bush Ltd
           • Valuation for mortgage said no repairs necessary, but bought house and chimney collapsed. Court said valuer was liable
       • Def. has special knowledge and may reasonably pl. will use the statement
         • liability possible but unlikely
         • Caparo v Dickman
           • Auditor owes DOC to company being audited, not to individual shareholders
       • Def. knows statements likely to be relied on but knows nothing about pl.
         • liability unlikely
     • Proximity and assumed responsibility
       • Hedley Byrne v Heller
   • Breach
   • Remoteness
   • Disclaimers (to avoid liability)
     • Must be communicated to the client, well written, easy to find, concise

4. Defences

   • Contributory negligence
   • Voluntary assumption of risk
     • Def must prove (1) Pl knew of the risk (2) freely decided to assume responsibility in event of harm

5. Cases

   • Donoghue v Stevenson
     • Gastro-enteritis after drinking ginger beer with snail
     • Held: reasonably foreseeable that ultimate consumer could be affected by lack of "quality control". Thus there is a DOC to ultimate consumers
     • Established 'neighbour test'
       • Neighbour = someone so closely and directly affected by your actions that you should think about the affect your actions/omissions have on them
   • Hedley Byrne v Heller
     • Bankers gave info about creditworthiness of a customer to a third party (the plaintiffs)
     • Held: def. weren't liable because they had issued a disclaimer of responsibility
     • (negligent misstatement)

6. 10 key points

   • Common law
   • Obligations
   • Neighbour
   • Donoghue v Stevenson
   • Elements to succeed
   • Duty of care
   • Breach
   • Harm/damage
   • Defences

7. Negligence

   • Duty of care = foreseeability & proximity
     • Breach of standard of care
       • Factual causation
         • Remoteness of harm
           • physical/economic loss

8. Negligent misstatement

   • Duty of care = proximity and assumed responsibility ("special relationship")
     • Breach of standard of care
       • Factual causation = actual reliance
         • remoteness of harm
           • pure economic loss