Law - Chapter 3 Negligence

Law - Chapter 3 Negligence

1. Law & Tort

   • Tort
     • Not a criminal offence - it is a civil wrong
     • A contractual relationship is not REQUIRED - EG A personal injury claim in a car crash. A civil wrong, but no contract established
     • Main elements
       • 1) Must be act or omissions from defendant
       • 2) Act or omission has directly caused damage/injury
       • 3) Court establish legal liability
   • Law
     • Breaches are illegal
   • Contract & Torts
     • If a contract exists and tort has been committed, 2 remedy options are -
       • Under a valid contract, damages are awarded to put claimint back into position if contract had been performed correctly.
       • In tort, damage amounts are intended to put claimant is position as if event never took place.
     • Limitation periods
       • Contract - Limitation period is 6 years from breach.
       • Tort - Limitation period is generally 6 years, however 3 for personal injury.

2. Negligence

   • What is it?
     • Breach of legal duty to take care, which leads to damage.
   • How can a claim be successful?
     • 1) Duty of care owed
     • 2) Defendant breached the duty
     • 3) As a result, damages have been suffered.
   • Duty of care
     • The 'Neighbour principle'
       • A duty of care owed, despite no contractual relationship existing,
       • EG - Manufacturers owe a duty of care to end users, despite the Cafe being the middle man.
     • Physical harm or Financialloss
       • Physical harm - damages awarded.
       • Financial loss - Only if 'Special relationship' exists.
     • Limits of the duty of care
       • Four tests are completed to see if duty of care exists.
         • 1) Was the damage reasonably foreseeable by the defendant at time of act?
         • 2) Is there a neighbourhood principle or closeness between parties?
         • 3) Should the law impose a duty of care between the parties (fair and reasonable to do so)?
         • 4) Is there a matter of public policy which exists or requires that no duty of care should exist?
   • Breach of duty of care
     • Determing if there was a breach
       • Case by case basis - focus on the facts.
       • Defendants duty to prove there was a breach
     • Res Ipsa Loquitur - The event speaks to itself!
     • 7 standards of care (Claimant to show defendant failed in each area).
       • 1) Particular skill - A reasonable man would possess.
       • 2) Lack of skill - Training element
       • 3) Lack of hindsight - Knowledge at a later date is irrelevant.
       • 4) Body of opinion - General practice guidelines (EG - ICAEW)
       • 5) Advantage and risk - Court will weigh up benefit and risk of defendant's actions
       • 6) Emergency - Situation based.
       • 7) Vulnerability - Higher standard expected in this area.
     • Loss caused by breach
       • Claimaint must prove they have suffered damage or loss DIRECTLY RELATED to breach!
       • Usual recoverability listed below -
         • - Loss as a result of personal injury
         • - Damage to property
         • - Financial loss due to personal injury (wages)

3. Professional advice and misstatement

   • Damages as a result of both ACTIONS and ADVICE are the same - both can be claimed.
   • Special relationships
     • Special relationship - Duty of care for purely financial losses (Credit institution).
       • 3 elements must be considered when identified -
         • 1) Was the defendant giving professional advice (accountant etc.)
           • 2) Was the advice given in a business context, or social? Special is business only.
             • 3) Was it known that advice would be relied upon?
     • No special relationship = No duty of care
       • EG - Auditors owes no general duty of care to the individual shareholders.
   • Factors to consider to see if D.O.C exists
     • Purpose of statement
     • Skills
     • Knowledge at time
     • Responsibilities owed
     • Relied upon
     • Fair
   • Protections for giving advice/opinions
     • Being an LLP
     • Auditors liability agreements
       • MUST HAVE - Approved from members. No more than 1 year. Limits liability to 'just and reasonable' amount

4. Remedies and defences in negligence

   • Remedies
     • Award of damages
       • Calculation of damages = put claimaint into original position.
       • Type of dmaages = Only awarded if directly linked.
       • Extent of loss = If foreseebale, ALL LOSS CONSIDERED.
   • Deferences in negligence
     • Contributory negligence
       • The claimant was partly to blame for damages and hence total paid is reduced.
         • EG - Car crash whereby the driver claiming was not wearing a seatbelt.
     • Volenti non fit injuria
       • Claimant has freely consented to risk of loss, hence no damage payable.
         • EG - Signing a consent form beforehand.
     • Exlcusion clauses
       • Provision to exclude of limit liability
         • If reasonable, no damage due.
         • If unreasonable, damages may still be due.
         • Also excluded if 'Act of god'.

5. Vicarious liability

   • What is this?
     • Being liable for torts conducted by other people, DURING EMPLOYMENT.
       • EG - Sally owns a salon and employ Daisy. Daisy gives a bad hair cut and the customer sues. Sally is liable for the tort, not Daisy.
         • Covered by 'Employers liability' insurance
   • Agents
     • If acting within the limits of their authority, the EMPLOYER is liable!