Negligence

Negligence

Loss
1. Physical
2. Economic
Elements
1. Harm not remote
  1. Beware of opening floodgates
2. Duty of care
  1. Relationship (degree of proximity)
    1. Temporal (time) factor
      1. 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
    2. Physical (place) / personal connection factor
      1. Dorset Yacht v Home Office
  2. Factors affecting judicial imposition of DOC
    1. Foreseeability
    2. No presumptions exist for/against
    3. Judicial reasoning, law of precedent
    4. Economic loss may make court less willing to impose DOC (wider scope)
    5. Special relationship = more inclined to impose DOC (essential in negligent misstatement)
    6. Legislative background that en/discourages imposition of DOC?
    7. Contractual background
3. Breach of duty
  1. Standard of care (SOC)
    1. Reasonable person
    2. Skill and expertise
      1. Greater standard of care required if def. hold out to be experts
      2. Professionals and trades people
    3. Risk allocation
      1. 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
      2. Circumstances, e.g. vulnerability
        If def. knows the pl. is particularly vulnerable then the SOC will be higher
      3. 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
      4. Gravity of risk (more danger = more care required)
      5. How practical/expensive is it to take precautions?
        Cheaper = more likely to be required, expense may be justified if activity is so dangerous
4. Duty caused harm
  1. But/for test
Negligent misstatement
1. Pure economic
2. Reliance
  1. pl. must have relied on the statement
    1. Boyd Knight v Purdue
      1. Auditor's report in company prospectus. (Unlike Caparo) court said a relationship existed between auditor as professional advisor and potential investors
3. Duty of care
  1. Special Relationship
    1. Plaintiff in contract with def.
      1. Liability in contract and negligent misstatement
    2. Pl. and def. have communicated directly or indirectly
      1. Liability likely
      2. Dimond Manufacturing v Hamilton
    3. No direct contact but def. knows pl. will rely and act on his/her advice for an immediate purpose
      1. Liability likely
      2. Smith v Eric S Bush Ltd
        Valuation for mortgage said no repairs necessary, but bought house and chimney collapsed. Court said valuer was liable
    4. Def. has special knowledge and may reasonably pl. will use the statement
      1. liability possible but unlikely
      2. Caparo v Dickman
        Auditor owes DOC to company being audited, not to individual shareholders
    5. Def. knows statements likely to be relied on but knows nothing about pl.
      1. liability unlikely
  2. Proximity and assumed responsibility
    1. Hedley Byrne v Heller
4. Breach
5. Remoteness
6. Disclaimers (to avoid liability)
  1. Must be communicated to the client, well written, easy to find, concise
Defences
1. Contributory negligence
2. Voluntary assumption of risk
  1. Def must prove (1) Pl knew of the risk (2) freely decided to assume responsibility in event of harm
Cases
1. Donoghue v Stevenson
  1. Gastro-enteritis after drinking ginger beer with snail
  2. Held: reasonably foreseeable that ultimate consumer could be affected by lack of "quality control". Thus there is a DOC to ultimate consumers
  3. Established 'neighbour test'
    1. Neighbour = someone so closely and directly affected by your actions that you should think about the affect your actions/omissions have on them
2. Hedley Byrne v Heller
  1. Bankers gave info about creditworthiness of a customer to a third party (the plaintiffs)
  2. Held: def. weren't liable because they had issued a disclaimer of responsibility
  3. (negligent misstatement)
10 key points
1. Common law
2. Obligations
3. Neighbour
4. Donoghue v Stevenson
5. Elements to succeed
6. Duty of care
7. Breach
8. Harm/damage
9. Defences
Negligence
1. Duty of care = foreseeability & proximity
  1. Breach of standard of care
    1. Factual causation
      1. Remoteness of harm
        physical/economic loss
Negligent misstatement
1. Duty of care = proximity and assumed responsibility ("special relationship")
  1. Breach of standard of care
    1. Factual causation = actual reliance
      1. remoteness of harm
        pure economic loss

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