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Flashcards

PROFESSIONAL NEGLIGENCE

P. M-Sylvester English 98 cards

Cards in this deck (98)

  1. 1PROFESSIONAL NEGLIGENCEFollows same principles as negligence. There must be:-
    1) Duty of care;
    2) A breach of that duty of care; and
    3) Loss and damages arising from the breach.
  2. 2Blyth v. Birmingham Waterworks Co."Negligence is the OMISSION to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do."
  3. 3Duty of care according to the Code of Ethics.See:-
    1) Part A Rule 27
    2) Part A Rule 21(1)
  4. 4Part A Rule 27 of the Code of Ethics states:-(1) An Attorney-at-law shall deal with his client’s business with all due expedition and shall whenever reasonably so required by the client provide him with full information as to the progress of the client’s business.
    (2) it is improper for an Attorney-at-law to accept a case unless he can handle it without undue delay.
  5. 5Part A Rule 21(1) of the Code of Ethics states:-An Attorney-at-law shall always act in the best interests of his client, represent him honestly, competently and zealously and endeavour by all fair and honourable means to obtain for him the benefit of any and every remedy and defence which is authorised by law, steadfastly bearing in mind that the duties and responsibilities of the Attorney-at-law are to be carried out
    within and not without the bounds of the law.
  6. 6(1) DUTY OF CARE (Generally)An attorney has a duty to use REASONABLE CARE and SKILL in giving advice and in taking such action as the retainer requires (Alexander v. Simpson).
  7. 7To sue for professional negligence there must be DAMAGE/LOSS as a result of the negligence and the attorney must have been under a DUTY to the person who suffered the damage.See the case of:-
    Rankine v. Garton Sons
  8. 8Rankine v. Garton SonsIn a negligence action, a client would not be entitled to judgment unless both components of the cause of action are proven: i.e. that the Defendant has been negligence and that the client has suffered loss/damage as a result of the negligence.
  9. 9An attorney has a duty to protect his client's interests by:- (NB - Groom v. Crocker)i) carrying out instructions in relation to the retainer properly;
    ii) consulting the client with regards to any doubts about authority left to him; and
    iii) keeping the client fully informed.
  10. 10Groom v. Crocker"The retainer when given puts into operation the normal terms of the contractual relationship, including in particular the duty of the solicitor to protect the client's interest and carry out his instructions in the matters in which the retainer relates, by all proper means. It is an incident of that duty that the solicitor should consult with his client in all questions of doubt which do not fall within the express or implied discretion left him, and should keep the client informed to such an extent as may be reasonably necessary according to the same criteria."
  11. 11An attorney NOT under a duty to advise client on matters of business; for e.g. whether an independent valuation is advisable.See:-
    1) Bowdage v. Harold Michelmore
    2) Buckland v. Mackesy
    3) Yager v. Fishman and Co.
  12. 12(2) STANDARD OF CAREStandard of care that an attorney must exercise is THAT IS A REASONABLE COMPETENT ATTORNEY.
  13. 13What does an attorney contract to do?An attorney contracts to be SKILFUL and CAREFUL.
    (i.e. An implied undertaking that as a professional there is a reasonable degree of care and skill which will be exercised).
  14. 14Is there a difference between the duty of an attorney who has been retained and one who offers advice voluntarily?NO. The duty remains the same and the liability for failure is the same as well.
  15. 15Must an attorney's knowledge of the law be perfect?NO. He must, however, have a good knowledge of the law.
    (Pritchard Joyce & Hinds v. Batcup)
  16. 16WHO CAN SUE FOR PROFESSIONAL NEGLIGENCE?The persons who may sue an attorney for professional negligence may be separated into 2 main groups:-
    i) Clients
    ii) Third Parties
  17. 17(i) ClientsThere is an AUTOMATIC duty of care arising upon the creation of a retainer. Action on negligence may be based on either CONTRACT or TORT or BOTH. For an action in contract to survive, there must be PRIVITY.
  18. 18(ii) Third PartiesMay be separated into two main groups:-
    a) Persons NOT in contractual relationship with attorney but to whom attorney owes a duty of care. Must be reasonably foreseeable by attorney that party would be directly affected by his actions.
    b) Persons NOT in contractual relationship with attorney but who have been led to rely upon his special skill and judgment.
    Action for negligence would be based on TORT.
  19. 19(a) Persons NOT in contractual relationship with attorney but to whom attorney owes a duty of care.See the case of:-
    Ross v. Caunters
  20. 20Ross v. CauntersA case where a testator left certain gifts to his sister-in-law in his will. The will was sent to the testator for attestation with instructions from the solicitors. However, the solicitors failed to include a warning that a beneficiary cannot attest to the will because the gift would be rendered null and void. The sister-in-law did not receive the benefit because of this.
    HELD: A duty of care was owed to the third party. There was a sufficient degree of proximity between a solicitor and an identified third party. It was within the solicitor's reasonable contemplation that his acts or omissions in carrying out the instructions would be likely to injure the third party.
  21. 21(b) Persons NOT in contractual relationship with attorney but who have been led to rely upon his special skill and judgment.See the case of:-
    Hedley Byrne v. Heller
  22. 22Hedley Byrne v. Heller"If in the ordinary course of business or professional affairs, a person seeks information or advice from another, who is not under contractual or fiduciary obligation to give the information or advice, in circumstances in which a reasonable man so asked would know that he was being trusted, or that his skill or judgment was being relied on, and the person asked chooses to give the information or advice without clearly so qualifying his answer as to show that he does not accept responsibility, then the person replying accepts a legal duty to exercise such care as the circumstances require in making his reply; and for a failure to exercise that care an action for negligence will lie if damage results."
  23. 23SPECIFIC DUTIES IN CONTENTIOUS BUSINESSa) Skill and Care
    b) Informing and Advising Client
    c) In Procedural Matters
    d) On Evidence
    e) Instructing or Acting as Counsel
    f) Want of Prosecution
  24. 24(a) SKILL AND CAREAttorney liable for consequences of IGNORANCE or NON-OBSERVANCE OF RULES OF PRACTICE of the court, for WANT OF CARE IN THE PREPARATION of a case for trial, or of attendance thereon with his witnesses and for the MISMANAGEMENT OF THE CONDUCT OF A CASE.
  25. 25Attorney NOT liable for errors:-- of judgment of new points
    - with respect to point of nice or doubtful construction
    - with respect to judgment on matters usually entrusted to more senior practitioners.
  26. 26See the cases of:-1) Godefroy v. Dalton
    2) Fletcher & Son v. Jubb and ors.
    3) Copeland v. Smith
  27. 27Godefroy v. Dalton"The cases ... appear to establish, in general, that he is liable for the consequences of ignorance or non-observance of the rules of practice of this court; for the want of care in the preparation of the cause for trial; or of attendance thereon with his witnesses: and for the mismanagement of so much of the conduct of a cause as is usually and ordinarily allotted to his department of the profession. Whilst on the other hand, he is not answerable for error in judgment upon points of new occurrence, or of nice or doubtful construction, or of such as are usually entrusted to men in the higher branch of the profession of the law (Tindal CJ)."
  28. 28Copeland v. Smith"Where an advocate holds himself out to be competent in a particular field of law, he must bring and keep himself up to date with recent authority in that field. Such authority is not necessarily that which can only be found in the specialist reports, but rather authority which has been reported in the general law reports. Thus if a solicitors’ firm or barristers’ chambers takes either the Weekly Law Reports or the All England Law Reports but not both, they should have systems in place enabling them to keep themselves up to date with cases which have been considered worthy of reporting in the other general series."
  29. 29(b) INFORMING AND ADVISING CLIENT Under this head, an attorney has the duty to:-NB:
    i) make proper investigations
    ii) not institute cases with no good cause of action
    iii) protect client from unnecessary litigation
    iv) inform client of alternative remedies
    v) explain legal consequence of any steps taken
    vi) communication with client
  30. 30i) Duty to make proper investigationsWith regards to litigation, an attorney has a duty to make proper investigations into the cause to enable him or counsel to form an opinion whether a cause of action exists and whether it is likely to succeed. Should there be an omission and action stayed or dismissed, attorney would not be entitled to his costs.
  31. 31Gill v. LougherIn such cases, an attorney cannot recover costs unless he can show that he made such inquiries from his client as a prudent attorney ought to have made.
  32. 32ii) Duty not to not institute cases with no good cause of actionIf attorney decides there is no good cause of action but client insists on instituting it then the attorney would not be liable for negligence unless his conduct amounts to a serious dereliction of duty owed to the court (i.e. professional misconduct). Attorney should ensure he receives written instructions after advising client that the action is hopeless or absurd.
  33. 33Myers v. ElmanProfessional misconduct arises where an attorney fails to fulfill his core duty of promoting the cause of justice to uphold and maintain professional standards of conduct.
  34. 34iii) Duty to protect client from unnecessary litigationSee the case of:-
    Edwards v. Edwards
  35. 35iv) Duty to inform client of alternative remediesAttorney consulted generally and not as to a specific remedy must inform his client of the alternative remedies available. It not, attorney is guilty of negligence.
  36. 36Griffiths v. EvansA case concerning a workman being injured on the job and subsequently consulting his attorney. Attorney only advised him with regards to the amount of compensation under the requisite Workmen's Compensation Act.
    HELD: the attorney was guilty of professional negligence due to his failure to advise the client of his rights under the common law.
  37. 37v) Duty to explain legal consequence of any steps takenAttorney should explain the legal consequences of any step which the client proposes to take (Re A Solicitor ex parte Incorporated Law Society).
  38. 38vi) Duty to communicate with the client.See the cases of:-
    a) Kitchen v. Royal Air Forces Association
    b) Ashton v. Wainwright
  39. 39Kitchen v. Royal Air Forces Association (failure to observe limitation periods)Failure to observe a 12 month limitation period and institute proceedings under the requisite Fatal Accidents Act on behalf of the Plaintiff whose husband, an employee of the RAF who was electrocuted while using domestic electrical equipment in his home.
    HELD: the solicitors were negligent.
  40. 40Ashton v. WainwrightThe Defendant was the solicitor for the plaintiff Club who desired to move into premises once owned by another Club. Defendant sent the necessary documents to the justices’ clerk who refused the registration. The Defendant never informed the plaintiffs of this refusal, leading to them moving into the premises which were subsequently raided by the police who prosecuted the plaintiff for supplying drinks at an unregistered club.
    The attorney was held to be liable for negligence for his failure to communicate the justices' clerk's refusal to the Plaintiffs.
  41. 41(c) IN PROCEDURAL MATTERS An attorney would be LIABLE FOR IGNORANCE OF FAMILIAR POINTS: for e.g.:-i) Not filing writs on time
    ii) Failure to observe limitation periods
    iii) Failure to institute/prosecute proceedings with due diligence
  42. 42i) Not filing writs on timeSee the case of:-
    Hunter v. Caldwell
  43. 43ii) Not taking proceedings within prescribed limits. See the cases of:- Fletcher and Sons v. Jubb and anor. Kitchen v. Royal Air Forces Martin v. Triggs Turner BartonIn Martins v. Triggs Turner Barton an attorney was held liable in negligence for failing to file a notice of appeal on time.
    In Kitchen v. Royal Air Forces Association a solicitor was held liable in negligence for failing to commence an action under the Fatal Accidents Act.
    In Fletcher and Sons. v. Jubb and anor. a solicitor was liable for failing to inform the client that the relevant limitation period was running out during which the action could be commenced.
  44. 44iii) Failing to institute or prosecute proceedings with due diligence. See the case of:- Shilcock v. PassmanShilcock v. Passman
    "It is not every mistake or misapprehension of an attorney that will make him liable to an action for negligence. The question in such an action is, whether the attorney has used reasonable skill and reasonable care."
  45. 45(d) ON EVIDENCE An attorney liable for:-i) Not taking statements of witnesses before trial;
    ii) Employing incompetent independent witnesses
    iii) Neglecting to subpoena witnesses and ensuring they attend trial.
  46. 46i) Not taking statements of witnesses before trial......especially where attorney is instructing counsel.
  47. 47ii) Employing incompetent independent witnesses (surveyors, accountants) who are, e.g. alcoholics or persons who have other problems, and for not ensuring that they do their work. See the case of: Mercer v. King"An attorney employed to conduct an action is bound to use due and proper care in the employment of persons whose evidence is material in the cause to prepare themselves to give such evidence."
  48. 48iii) Neglecting to subpoena witnesses and ensuring that they attend the trial.See the case of:-
    Crook v. Derbyshire (NB - in this case, the attorneys were held NOT to have fallen short of their duty).
  49. 49(e) INSTRUCTING OR ACTING AS COUNSEL Where attorney instructs counsel, attorney will be negligent for:-i) Failing to appear in court and instruct counsel
    ii) Instructing counsel inadequately so that counsel withdraws
    iii) Attorney acting as counsel would be liable to client for failure to attend court
  50. 50i) Failing to appear in court and instruct counsel (See: Burgoine v. Taylor)Burgoine v. Taylor
    A matter was transferred from one judge to another unbeknownst to the attorney who also did not notice that it had been posted in the newspaper for 4 days. He was initially held to be negligent but the penalty was overturned eventually upon his payment of wasted costs.
  51. 51ii) Instructing counsel inadequately so that counsel withdraws (See: Hawkins v. Harwood)Hawkins v. Harwood
    In an action against an attorney for
    negligently conducting a cause, by neglecting to instruct any counsel to appear
    before the action was called on for trial, it appeared that the plaintiffs counsel
    appeared at the trial of the cause with a brief, and called the attorney and the
    witnesses, and, upon receiving no answer, withdrew the record. Held to be negligent.
  52. 52iii) Attorney acting as counsel would be liable to client for failure to attend court (See: Fergusson v. Lewis)Fergusson v. Lewis
    Where an attorney acts as counsel and fails to attend court, he would be liable to the client.
  53. 53(f) WANT OF PROSECUTIONWhenever an attorney, by his inexcusable delay, deprives a client of his cause of action, the client can claim damages against him. The delay may be waived or acquiesced in but not by mere inaction on the part of the defendant.
  54. 54SPECIFIC DUTIES IN NON-CONTENTIOUS BUSINESSLoss sustained by a client as a result of ignorance on ordinary points of law must be compensated for by an attorney (Sykes v. Midland Bank Executor).
    Attorney may also be liable for failing to advise a client on any steps that ought to be taken (Otter v. Church and ors.).
  55. 55Sykes v. Midland Bank ExecutorIn this case, an attorney allowed unusual covenants to be inserted in a transaction and failed to explain the effect to a client of clauses in a headlease which restricted use of a certain property.
  56. 56Otter v. Church and ors.A minor, M, became tenant in tail in possession of settled property. When he attained majority he began serving overseas in the Royal Air Force. His mother as agent consulted solicitors who, being under the misapprehension that M was absolutely entitled, advised that no step need be taken to transfer the settled property to him until he returned to England. M was subsequently killed in action. He was a bachelor and died intestate, without having disentailed the settled property, which, consequently passed to his uncle.
  57. 57To better understand professional negligence in non-contentious matters, one may look at specific instances of same concerning:-1) In Sales and Purchases of Land
    2) In Explanation of Documents
    3) In Wills
  58. 581) IN SALES AND PURCHASES OF LANDAttorney will NOT be liable for mistakes on difficult points of law but WILL be liable if there is a usual way of doing things from which he has departed and loss results. Usual inquiries should be made.
  59. 59Would the attorney still be liable if he relies on statements by the client that he himself has inquired?No he would not. Such statements should be confirmed in writing for the attorney's own protection.
  60. 60What is recommended?An attorney should be meticulous and conduct his own inquiries nonetheless.
  61. 61Goody v. BaringThe Defendant was acting on behalf of both the purchaser and the vendor in a conveyancing transaction. The Defendant was found liable for negligence because he failed to make his own inquiries with regards to the amount of rent which tenants should pay and relied solely on information received from the vendor. The Plaintiff was subsequently forced to make repayments of overpaid rents to the tenants.
  62. 622) IN EXPLANATION OF DOCUMENTSSee the cases of:-
    1) Standard v. Ullithorne
    2) Meadows v. Meadows
  63. 63Standard v. UllithorneIt is an attorney's duty to explain to the client any documents which the client is required to execute and the consequence of its execution.
  64. 64Meadows v. MeadowsWith respect to a deed, the usual practice is for an attorney to READ or EXPLAIN or to state that it is in accordance with a draft previously explained. He MUST explain to the client to obligations, if any, which arise under it.
  65. 653) IN WILLSi) taking of instructions for calls for the exercise of a sound, discriminating and well-informed judgment.
    ii) where marriage contemplated by person giving instructions and attorney fails to advise marriage revokes will, attorney will be liable in negligence.
    iii) attorney make also be liable in tort for negligence to client or his personal representative and an intended beneficiary.
    iv) if third party gives instructions, those should be confirmed with the testator personally.
    v) will must be explained in detail to client.
  66. 66Where marriage contemplated by person giving instructions and attorney fails to advise marriage revokes will, attorney will be liable in negligence.See the case of:
    Hall v. Meyrick
  67. 67Attorney make also be liable in tort for negligence to client or his personal representative and an intended beneficiary.See the cases of:-
    1) Ross v. Caunters
    2) White v. Jones
    3) Carr-Glynn v. Frearsons
  68. 68Ross v. CauntersA case where a testator left certain gifts to his sister-in-law in his will. The will was sent to the testator for attestation with instructions from the solicitors. However, the solicitors failed to include a warning that a beneficiary cannot attest to the will because the gift would be rendered null and void. The sister-in-law did not receive the benefit because of this.
    HELD: A duty of care was owed to the third party. There was a sufficient degree of proximity between a solicitor and an identified third party. It was within the solicitor's reasonable contemplation that his acts or omissions in carrying out the instructions would be likely to injure the third party.
  69. 69White v. JonesA testator who had a quarrel with his daughters made a will disinheriting them. They eventually reconciled and the testator instructed his attorney to include gifts amounting to 9,000 pounds each to his daughters. This was never done and the testator eventually died. Upon the daughters claiming negligence, it was HELD thatWhere a solicitor accepted instructions to draw up a will and as the result of his negligence an intended beneficiary under the will was reasonably foreseeably deprived of a legacy the solicitor was liable for the loss of the legacy.
  70. 70Carr-Glynn v. Frearsons"The duty owed by solicitors to a specific legatee was not a duty to take care to ensure that the specific legatee received his legacy, it was also a duty to take care to ensure that effect was given to the testator's testamentary intentions. The loss from which the specific legatee was to be saved harmless was the loss which he would suffer if effect was not given to the testator's testamentary intentions; that was the loss of the interest which he would have had as a beneficiary in an estate comprising the relevant property."
  71. 71LIABILITY FOR AGENTSAttorney liable as principle for the negligence of:-
    i) his clerk; and
    ii) his partner
    ...if they are acting within their authority.
  72. 72See the cases of:-1) Lloyd v. Grace , Smith & Co.
    2) Chapman v. Chapman
  73. 73Lloyd v. Grace, Smith & Co.A widow who was the owner of two cottages consulted a firm of solicitors with regards to a conveyancing transaction. She was attended to by the managing clerk of the firm who conducted conveyancing business of the firm without supervision. Rather than do what the widow wanted him to do, he made a conveyance of the property to himself and thereafter, dishonestly disposed of it to his benefit.
    HELD: A principal is liable for the fraud of his agent acting within scope of his authority, whether the fraud is committed for the benefit of the principal or for the benefit of the agent.
  74. 74LIABILITY IN TORTAttorney may be liable in tort to:-
    i) his contractual clients (action in contract also available);
    ii) third parties led to reposed confidence in attorney's professional ability;
    iii) third parties who attorney ought to have had in mind when carrying out his duties.
  75. 75i) Contractual ClientsRelationship of attorney and client gives rise to the duty to exercise such care and skill on which attorney must know that his client relied. It is a duty in tort.
    See: Midland Trust Bank Ltd v. Hett, Stubbs and Kemp
  76. 76Midland Trust Bank Ltd v. Hett, Stubbs and Kemp"The solicitors were however liable to the plaintiffs in tort because under the general law the relationship of solicitor and client gave rise to a duty on a solicitor to exercise that care and skill on which he knew that his client would rely, and to a duty not to injure his client by failing to do that which he had undertaken to do and which, at the solicitor's invitation, the client had relied on him to do."
  77. 77ii) Third PartiesRULE: anyone with special skill, who assists another, owes a DUTY OF CARE to that person if the latter, to his knowledge, is relying on that skill.
    See the cases of:
    1) Hedley Byrne v. Heller
    2) Dutton v. Bognor Regis
  78. 78Hedley Byrne v. Heller"If in the ordinary course of business or professional affairs, a person seeks information or advice from another, who is not under contractual or fiduciary obligation to give the information or advice, in circumstances in which a reasonable man so asked would know that he was being trusted, or that his skill or judgment was being relied on, and the person asked chooses to give the information or advice without clearly so qualifying his answer as to show that he does not accept responsibility, then the person replying accepts a legal duty to exercise such care as the circumstances require in making his reply; and for a failure to exercise that care an action for negligence will lie if damage results."
  79. 79Dutton v. Bognor RegisThe building inspector of a council conducted an inspection of the excavation and foundation of a property was due to be developed. After inspection, he approved the works. It was subsequently discovered that the building was being built on insecure and made up foundations. The plaintiff eventually bought the completed house which deteriorated quickly.
    HELD: council liable..." it must be in the contemplation of those who gave approval to building works that such approval would affect subsequent owners of the house; accordingly, through its building inspector, the council owed a duty of care to the plaintiff as a subsequent owner of the house, and was liable to the plaintiff for the negligence of the inspector..."
  80. 80The main thing is RELIANCE.The professional man must know that the other is RELYING on his skill and the other must in fact rely on it. TO OBTAIN DAMAGES, FINANCIAL LOSS MUST BE SUFFERED.
    To be held not liable, must be an EXPRESS DISCLAIMER where attorney acts without reward or IN THE ABSENCE OF CONTRACTUAL RELATIONSHIP.
  81. 81CONSEQUENCES OF NEGLIGENCE TO ATTORNEY1) Costs
    2) Taxation
    3) Liability to Action
    4) Damages
  82. 821) COSTSAttorney guilty of negligence cannot recover costs.
  83. 83Where attorney sues for costs and has been negligent, court must prove that the:-i) result obtained is fruitless (Pasmore v. Birnie).
    ii) failure results wholly from attorney's negligence (Dax v. Ward AND Harley v. McDonald).
  84. 84Pasmore v. Birnie"It is no defence to an action by a solicitor against an assignee under a commission of bankrupt, that the commission was sued out under a misrepresentation by plaintiff that the commission would be operative in the Isle of Man, and that it has been wholly fruitless; for the commission cannot be treated as a mere nullity."
  85. 85Dax v. Ward"It is no answer to an action on an attorney's bill for prosecuting a suit for the defendant,
    that no benefit has been derived by the defendant, where the failure
    does not result wholly from the plaintiff's negligence, but partly from accident."
  86. 86Harley v. McDonald"It was desirable in the public interest that the court should have power in appropriate cases to award costs against a barrister personally. The court's only concern when it was exercising that jurisdiction was to serve the public interest in the administration of justice. The essential point was that it was not errors of judgment that attracted the exercise of jurisdiction, but errors of a duty owed to the court."
  87. 872) TAXATIONItems on bill may be disallowed if incurred as a result of the attorney's negligence (Groom v. Crocker).
  88. 883) LIABILITY TO ACTIONAttorney may be liable in CONTRACT and in TORT to his client and in TORT to other parties affected.
  89. 894) DAMAGESi) Amounts to disadvantage/loss suffered by claimant as a result of the attorney's negligence;
    ii) If suit in tort filed, proof of actual damage is required;
    iii) If negligence constitutes a breach of contract, proof of damage is not necessary but in its absence only nominal damage will be recovered;
    iv) May be cost of doing work left undone or diminution in the value of asset.
    See: Johnson v. Agnew
  90. 90ACTION IN TORT OR CONTRACT?In TORT = the TEST is foreseeability
    See the cases of:-
    1) The Wagon Mound No.2
    2) Koufos v. Czarnikow
    3) Doyle v. Olby
  91. 91The Wagon Mound No. 2"Foreseeability of the injury is a necessary element in the measure of damages recoverable in cases of nuisance, and it is not sufficient that the injury suffered was the direct result of the nuisance, if that injury was in the relevant sense unforeseeable."
  92. 92Koufos v. Czarnikow"...the measure of damages in contract and the measure of damages in tort are not the same, for in contract there is opportunity for the injured party to protect himself against a particular risk by directing the other party's attention to it before the contract is made, but in tort there is no such opportunity and a tortfeasor cannot reasonably complain if he had to pay for unusual but foreseeable damage resulting from his wrongdoing..."
  93. 93Doyle v. Olby"The object of damages in fraud, unlike contract, is that the damages should compensate the plaintiff for all the loss he has suffered, ie, for all the actual damage directly flowing from the fraudulent inducement..."
  94. 94In CONTRACT, when the contract was made, the damage ought to have been FORESEEN or CONTEMPLATED as being not unlikely to result from the breach.Koufos v. Czarnikow
    "...in contract there is opportunity for the injured party to protect himself against a particular risk by directing the other party's attention to it before the contract is made..."
  95. 95Is the degree of likelihood of damage in contract higher than in tort?YES. Furthermore, special knowledge may create a greater liability for breach of contract than tort. Whether loss or damage is capable of being monetised or not is another consideration.
  96. 96MITIGATIONQualifies the basis of compensation. REASONABLE STEPS must be taken by client to mitigate his losses (i.e. to prevent further or more severe loss). Should client fail to do so, he can be disallowed from claiming damages stemming from his own neglect.
  97. 97However, mitigation does not require/compel client to spend money.Pilkington v. Wood
    "...the plaintiff's duty to mitigate the damages did not go so far as to oblige him, even if he were given by the defendant an adequate indemnity against the costs, to embark on a difficult piece of litigation, and, therefore, he was not under a duty to bring an action against the vendor for breach of covenant."
  98. 98INDEMNITYWest Wake Price v. Ching
    "The assured cannot recover anything under the main indemnity clause or make any claim against the underwriters until they have been found liable and so sustained a loss."

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Flashcards on PROFESSIONAL NEGLIGENCE, created by P. M-Sylvester on 03/08/2015.
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P. M-Sylvester · Aug 2015
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