The Case Of Negligent Misstatement

The Case Of Negligent Misstatement
From considering all of the facts of Giant Plc. Vs. Hatchet & Co, it is evident that we are faced with the problem of negligent misstatement. It could
be argued that this case could be somewhat in relation to tort of deceit. However, this only applies when someone intentionally lies when making a
statement, and from looking at the facts of this case there is no evidence of this so the problem has to be based on negligent misstatement. The
underlying problem of this case is that the audit accounts made by the defendants for the Giant Plc were not accurate, which resulted in the share
value of the company to fall drastically and shareholders losing their investments. Thus Hatchet & Co are faced with defending themselves in a case
of negligent misstatement. Both Giant Plc and its shareholders, the claimants for this particular case, faced economic loss and want the necessary
damages to counteract this. Negligent misstatement is when 'a false statement of fact is made honestly but carelessly' (REFERENCE). When it
comes to this area of law, courts do not like to award duty of care when there is pure economic loss. This was evident in the case of Candler Vs.
Crane (1951) where they held, in reference to Lord Atkin's neighbour principle (Donoghue Vs. Stevenson, 1932), that there are limited factors that
permit duty of care and that it must meet two requirements of there being: reasonable foresight of harm and a relationship of proximity. The court also
realised here, that if there
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The Tort Of Negligence Developed
A tort might be stated as a civil wrong not happening out of a contract or a relationship created on trust, which is considered by a harm of the legal
right preserved on others and an act for repressible damages. Therefore the objective of torts is toward recompense the victim and not penalizes the
wrong person. Before we start a ride into in what way tort law operates it would be sensible to know the nature of the torts committed and their growths
over the years. This would not lone help in considerate the current situation in a clearer manner but can also deliver a logic of history about torts.
During the early primary 1800 's the tort of negligence developed as a single type of torts owed to the fact that events in the tort of negligence were
growing suggestively throughout that period. Then, the awareness of the imposition of a duty of care in negligence developed alongside cases
such as Heaven v Pender (1883), and extra outstandingly case of Donoghue v Stevenson (1932) that remains the leading case in negligence. This
case clarifies that; Mrs Donoghue and her pal went to a cafe in Paisley. At the cafe, Mrs Donoghues ' pal purchased her a drink which was a ginger
beer float consisting of ginger beer that stood in an cloudy bottle. After Mrs Donoghue drank out of the drink in a beer cup, her pal topped up the
drink, and then they found in the ginger beer bottle decomposed leftovers of a snail. Mrs Donoghue claimed that the recalls of seeing the snail in the
ginger beer

Pure Economic Loss: Hedley Byrne V. Heller
This principle shows that the common law position significantly changed by House of Lords decision which creates exception to general principle
that pure economic loss could not recover. The key case indicates the pure economic loss is Hedley Byrne v Heller (1964). Firstly, the claimants in
this case were an advertising agency, who had been asked by a firm called Easipower Ltd to buy substantial amounts of advertising space on their
behalf. From this case, Hedley wanted to know if it would be advisable to extend credit to a customer, Easipower. Then Hedley Byrne asked Heller
who were Easipower's bankers whether the extend credit would be advisable. Heller advised Hedley Byrne that it was appropriate to extend credit to
Easipower in the form of letter stated that the Easipower was considered good for its ordinary business engagements. Thus, Hedley Byrne extended
credit to Easipower and Easipower went out of business, leaving Hedley Byrne to pay the amount due to companies from whom they had brought
advertising space. Therefore, Hedley Byrne sued Heller for negligence, claiming that the information given was misleading. In view of the words
disclaiming liability, the House of Lords held that... Show more content on Helpwriting.net ...
Mr White asked his solicitor, Jones, to change his will to benefit his 2 daughters Jones took a significant time to respond to this request, during which
time White died. The daughters did not benefit from Mr White's will, therefore claimed their losses from Jones. Therefore, the two daughters of
78–year–old Mr White sued Mr Jones for failing to follow their father's instructions when drawing up his will. The House of Lords judge that the
daughters would be able to claim. Solicitors may escape the consequences of not doing their job properly; he said that a special relationship existed
between the daughters and the solicitor and that Mr Jones had assumed responsibility towards

Negligent Misstatement
INTRODUCTION Law of tort dominates civil conduct in all aspects of life and numerous of violations of duties are all distinctly set. It provides
remedies for certain civil wrongs that have not been arisen from the contractual duties. Under tort law, whether it is an intentional act or accident, the
injured victim (plaintiff) may be capable to recover damages from the person that liable for the harmed caused (defendant). Negligence is the most
significant and developed category of tort in terms of money and varied of cases involved. It believes that the plaintiff should bear their own
adversities unless there is a proof shows that the defendant owes of duty to comply with ordinary care and skill. There are few elements have to be
shown ... Show more content on Helpwriting.net ...
There was no inducement between the parties because JEB entered the contract for independent reasons. The defendants were unaware of the
misrepresentation and it was considered as a negligent act instead of fraudulence. Besides, the complainant judgement was not influenced by the
negligent statement and he did not rely on the information to take over the company. Throughout the decades of the 1990s, there had been an
international trend arose toward a more limited scope of negligence for accountants liability to clients. This important reversal has been found by
landmark suggestions from some landmark cases such as Caparo v Dickman 1990. This case concerns about the limits of the potential liabilities for the
accountants through auditing the annual accounts. The respondents, Caparo Industries Plc had took over the Fidelity Plc by acquiring 29.9% of the
issued shares and making a successful bid for the remainder shares in the market on 1984. The annual audit of Fidelity was regulated by statute and the
Companies Act 1985 has constructed that what the statutory accounts should embrace minutely. Later, Caparo sued against the appellants, auditors of
Fidelity Plc for few reasons. The respondent alleged that the company's accounts were inexact and been audited negligently, as a result they had
suffered a great loss of over

Chandler V Cape Plc Case Summary
Chandler v Cape Plc [2012] EWCA Civ 525 was a very important decision as it traversed the limits of common law and the fuelled the debate on how
much power and influence the court has in lifting the corporate veil to support the underhanded claims (due to limited liability) of tort victims.
Consequently, it also led to how the assumption of responsibility is determined given the concept of limited liability. This assignment is going to
analyse the decision of the case, evaluate the reasoning and its implications, and compare the consequences of a later decision with its precedents. The
case, as per the following evaluation, was found to be pushing the borders of common law, creating both positive and negative implications. The case
was also found to be contradictory to other important landmark cases, such as Adams v Cape Industries Plc [1990] Ch 433. The Case's Decision
Chandler v Cape Plc [2012] EWCA Civ 525 was a landmark Court of Appeals decision that resolved a tort victim's claims from a parent company of a
subsidiary where the victim suffered an industrial injury. The court's decision relied on the existence of a duty of care on the part of Cape Plc via an
assumption of responsibility by using the three–part Caparo test to determine whether there is a duty of care, and the second and third parts of the test
to determine assumption of responsibility. The decision reads:
"The basis on which the judge found there was a duty of care on the part of Cape is on the basis

The Issue Of Limited Liability
In light of the decision in Prest, this essay will argue that this principle has been taken too far, and it has become too easy for parent companies to
escape the obligations of its subsidiaries. It will begin with a discussion of limited liability and examine the when the veil may be pierced after Prest.
Next, it will discuss the current arguments calling for reform.
The concept of limited liability was conceptualized to promote enterprise through limitation of risk. In many ways, the argument remains applicable
today. As a detailed exposition is beyond the scope of this essay, this essay will examine the two major lines of debate. Firstly, the argument that limited
liability encourages enterprise is normally linked with "passive investors" who have no other interest in the company other than that their money is
invested within. However, on the opposite spectrum, the power to purchase shares was also given to companies having a separate legal personality. In
corporate group scenarios, this essay will support the arguments of Blumberg and Wright that theparent company is not a "passive investor", but rather
an active force behind the subsidiary. Thus, there is a clear danger, as evidenced in cases such as Adams, that limited liability can encourage risk that
is excessive, as 'owners engage in excessively risky activities [being] protected from liability.'
This is demonstrated through the observation that directors in privately managed companies stand behind the veil

Negligence is a breach of the duty of care owed by one...
Negligence is a breach of the duty of care owed by one person to another from the perspective of a reasonable person. The Duty of care owed in
number of situations such as driver and pedestrian, doctor and patient, employer and employee, teacher and student and in many other situations.
Thereby, negligence is one of the most extensive areas in tort law. In order to prove liability in negligence the claimant must show, on the balance of
probability, that the defendant owed a duty of care, breached that duty by failing to meet the standard of care required and as a result the claimant
suffered loss or damage which is not too remote.[1] Thus, it is important to prove all three elements because each of them are complex and conceptually
... Show more content on Helpwriting.net ...
Thus, the duty of care test for psychiatric injury cases is different for them. For primary victims there is tow elements to be established: firstly, is
there a recognized psychiatric injury, secondly, was the claimant: physically injured as well as psychiatrically, in danger of physical injury. If
witnesses to the incident in some way while not themselves in physical danger further tests apply: do they have a recognized psychiatric illness,
caused by a sudden shock, are they within a class of people who the law allows to claim compensation for psychiatric injury as a secondary victim and
what was their proximity to the shocking event?
The third case where three–part test is used is omission. In general, in Negligence there is no liability for omission. However, there are some
situations where a defendant may be liable for it. It is when the defendant has a high degree of control over the claimant, assumed responsibility for
the claimant in some way and created a dangerous situation, and fails to deal with it. The case Stovin v Wise [1996] AC 923 is proof on it.
Acts of third parties is another case where Caparo test is still the basis of liability. Negligence usually executes liability only on the person who causes
damage, but there are five

"There Is No Point Reforming the Rules on Auditors If the...
"There is no point reforming the rules on auditors if the liability regime continues to be as lax as it currently is." Discuss.
Auditors provide a key investigation function in the business world. The law in relation to the liability of auditors changed significantly with the
introduction of Companies Act 2006. It is now possible for audit firms to limit their liability towards clients through contractual agreements. The
current auditing liability regime has proven to be controversial. This essay will first present the relevant liability rules and examine the underlying
problems, then evaluating the significance of these rules with regard to auditing reforming.
Overall, an auditor can be liable either in contractual, tortious or ... Show more content on Helpwriting.net ...
After then the decision of Caparo Industries plc v Dickman outlined the three–fold test: 1) There should be a relationship of 'proximity' between the
parties. 2) The resulting damage is reasonably foreseeable. 3) 'The situation should be one in which the court considers it fair, just and reasonable that
the law should impose a duty of a given scope.'
This is not an easy test to meet. Firstly, a "special relationship" is required for the third party to claim that the defendant auditor owed him a duty of
care. In order to define this concept, Lord Oliver outlined further conditions for the claimant to establish sufficient proximity with the defendant party.
Thus the relationship of proximity is hard to specify which placed increasing difficulties on claimants. Secondly, once the claimant has established that
the auditor did have a duty of care towards him, he will then need to show that this duty has been breached. It is even less likely that a breach will be
found if the auditor has complied with industry practice. Thirdly, the claimant must establish a dominant causal link between the breach and the loss.
The likelihood, therefore, of a third party claimant succeeding in their action is actually quite

Negligence And Its Impact On Society
Negligence is a tort that is a major focus point in how people and organizations interact with each other. How the tort of negligence developed is
critical for understanding who is held accountable when a civil wrong has occurred. Negligence focuses on three basic elements: a duty of care, a
breach of said duty, and causation of damage. The goal of this assessment is to examine the development of these three elements of negligence tort law
in England, and hopefully explain its significance in how it affects society. First, a duty of care must be established for a legitimate negligence
claim. The concept of a duty of care is that it demonstrates the defendant (the one wrongdoer) had some sort of responsibility to take care of the
claimant (the wronged party who is bringing forth the claim). In English law, the landmark case that conceived the idea of establishing a duty of care
was Donoghue v Stevenson (1932 UKHL 100), a case involving a woman who drank a bottle of ginger beer and found a dead snail in the bottle, thus
bringing suit against the manufacturer. The House of Lords ruled in the claimant's favor, stating the manufacturer does owe a duty of care to the
consumer. Arguably the most integral part of the ruling in Donoghue is where Lord Atkin states:
You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbor. Who, then, in law
is my neighbor? The answer seems to be – persons who are so closely and

Case Analysis : R V. Stone
R v Stone; R v Dobinson [1977] QB 354 (CA) Court of Appeal; Criminal Division Issues: "Manslaughter – Recklessness or gross negligence –
Assumption of duty of care for infirm person – Breach of duty amounting to recklessness – Negligence – Assumption of duty to care." Introduction: 'R
v Stone; R v Dobinson' is significant as it addresses the point of 'duty of care' and the outcome was described as "highly controversial because of the
low capabilities of the two accused" . Appellant Gwendoline Dobinson was treated differently to appellant John Edward Stone due to her gender.
Dobinson was expected to care for Fanny due to women being the "primary care–givers in domestic relationships" , proving that "the rule on voluntary
undertaking of responsibility potentially remains structurally gendered" . The case was dealt within the Criminal Division of the Court of Appeal by
Geoffrey lane LJ, Neild and Croom–Johnson JJ. The appeals against conviction were dismissed although the appeal by Stone against his sentence
was allowed, altering his sentence. The decision was also influenced namely "whether in a case of manslaughter it is necessary to prove that the
defendant was reckless as to whether the victim would suffer death of serious bodily harm" . Facts of the case: Stone, aged 67, was described to be
of "low average intelligence, partially deaf and almost blind" . Dobinson, Stone's mistress, aged 43, was described as "ineffectual and inadequate" .
The couple lived with

The Duty Of Care On Public Bodies
An explanation will be made on how the current law addresses the imposition of a duty of care on public bodies. An evaluation will then be made to
determine whether the duty of care the police owe to protect individuals from a known threat should be legally recognised.
The common law duty of care was established in Donoghue v Stevenson [1932] AC 562 (HL) and refined in Caparo Industries plc v Dickman [1990]
2 AC 605 (HL). Any party including public authorities may owe a duty of care to another if particular conditions are fulfilled. The Caparo conditions
apply to public bodies in respect of whether it is fair, just and reasonable to impose a duty of care on their actions.
The fundamental case to address the duty of care imposed on a ... Show more content on Helpwriting.net ...
Further to the general negligence position on public bodies, in instances of omissions the general principle is that there is no duty to act unless a
special relationship exists. However, there is an exception, a duty is owed if proximity is established as demonstrated in Home Office v Dorset Yacht
Co Ltd [1970] UKHL 2.
Lord Bingham did not agree that the policy arguments established in Hill and subsequently followed in Brooks to be appropriate in the context of
Smith. In Smith he attempted to introduce a 'liability principle'. The principle proposed that where evidence is credible and the threat is specific and
imminent, reasonable steps must be taken to assess such a threat and act where necessary. He did not agree that adopting the principle would induce
defensive practices, neither did he agree that accepting the principle would detract from the police's primary functions. The 'liability principle' reflected
the content of Article 2 European Convention on Human Rights (ECHR), Right to life.
Following the signing of the ECHR, the United Kingdom introduced the Human Rights Act 1998 (HRA 1998). Under s6(3)(a) HRA 1998, the courts
are now considered a public body, therefore no decisions they make can affect the guaranteed rights of any individual under ECHR. The introduction of
this legislation has resulted in individuals bringing claims for Human Rights breaches where negligence claims have

Nature And Sources Of New Zealand Law Essay
Part One: Nature and sources of New Zealand law Law, Morality/Ethics and societal context
There are serval reasons why we need law in today's society, for instance: To regulate society, as the traffic laws exist that enforce people drive in a
safe manner; To protect people, as there are laws about food safety to ensure that the food we buy is safe to eat; And to enforce rights, since the
criminals laws prevent or deter people from abuses other people.
However,
The Constitution
The US's Constitution was written during the Constitutional Convention and signed on September 17, 1787. While New Zealand has an unwritten
Constitution, and it's found in court decisions, statutes, doctrines and conventions. There are serval source of it, for instance: New Zealand Bill of
Rights Act, Constitution Act, Electoral Act,Supreme Court Act, and Treaty of Waitangi.
A convention is a non–legal rule of a political or constitutional nature. It is non–justicable.
Examples of conventions include: the caretaker convention––newly–elected governments cannot be influenced by previous governments.the
Governor–General always gives the Royal Assentto turn bills into acts.
Tiriti O Waitangi / Treaty of Waitangi
(a) The principles of the Treaty are only enforceable when adopted in domestic law.
(b) The role of the Tribunal is to make non–binding recommendations for both historical grievances and contemporary claims.
Part 2: Legislation
Parliamentary process
1. Three branches of government:
1)

Existence Of A Duty Of Care
E NVIRONMENTAL L AW S URVEY 2013 40 existence of a duty of care towards the plaintiff is assessed on a case
–by–case basis 24 and according
to the criteria set out by the House of Lords in Caparo Industries plc v Dickman : 25 foreseeability of the damage, В«proximityВ» between the
plaintiff and the defendant, and the fact that it was just and reasonable to assume the existence of a duty of care 26 . However, neither English nor
Nigerian case–law recognize the existence of a general duty of care as regards the damage which the claimant might suffer as a result of the conduct
of third parties 27 . Indeed, in Smith v Littlewoods 28 the House of Lords held that the existence of a duty of care concerning the actions of third
parties might

Gross Negligence Manslaughter And Homicide Manslaughter
Gross Negligence Manslaughter is a form of involuntary manslaughter in which in which the persons charged has caused a death without the mens rea
of murder. Involuntary manslaughter being unintentional killings due to recklessness, criminal negligence or an unlawful act that is a misdemeanour
or low level felony. Gross negligence manslaughter is categorised as not committing an unlawful act but a defendant committing a lawful act in a
manor that is considered criminal. Gross negligence manslaughter can also be committed through not doing something as to result in death. Gross
negligence manslaughter was initially set out in R v. Bateman (1925) in which a doctor was convicted of manslaughter due to his treatment of a
woman during childbirth. The term gross negligence manslaughter was then more so interpreted that in order to ascertain criminal liability, the jury
must agree that the level of negligence of the accused is beyond compensation alone and that it is criminal to act so thoughtlessly towards the life and
well–being of others. This interpretation was deemed inadequate and later updated to a then considered better interpretation and a large area of gross
negligence manslaughter was replaced with reckless manslaughter. This interpretation was again contested due to the R v. Seymour (1983) case when
the defendant intended to push their girlfriends car with a lorry, which subsequently resulted in accidental death of the girlfriend. The judge directed
that the jury

English Tort Law And The Public Sector
English Tort Law and the Importance of Duty of Care in the Public Sector (Based on the Kent v Griffith Case from the year 2000)
Tort Law is concerned with accidental injuries and deals with the distribution of losses occurred during those injuries. Every country has its own
statutory law , thus according to these laws acts in its own way in different situations. Public health and ambulance services are of great importance
when it comes to preventing injuries and damages. In the UK, before the 2000s, ambulances were not obliged (by common law) to provide
emergency service, but were rather considered an ordinary health care provider. Therefore, in a lot of cases it would be difficult to put the liability on
the defendant, which automatically leads to a higher number of injuries and damages. In the case Kent v Griffith an important outcome and rule is
created, which creates the hope of decreasing damages significantly in the future. I will argue that the duty of care in the health care system (especially
ambulances) should be treated with greater attention, as it can lessen enormous damages caused by delayed service and unreasoned explanations.
Furthermore, I will try and prove that, due to negligence, the damages created by delayed services, thus lack of duty of care in the public sector, are
far exceeding precaution costs; Moreover, they harm the economy and social well–being as well.
Duty of care can be viewed as a ''control device'' used for determining when the defendant

Explain The Duty Of Care Within The Law Of Negligence
The law of negligence covers a broad spectrum, with negligence being defined to apply in 'any situation where a defendant has breached a duty of
care owed to a claimant'. This essay will seek to look into the different areas within the law of negligence, to assess Lord Toulson's assertion in
Micheal v Chief Constable of South Wales (2015) . There will be a primary focus on his notion of 'incremental growth' , 'argument by analogy' , and
the necessity of 'policy considerations' , with particular regard taken towards the mixture of policy considerations, in an effort to determine whether
some areas, such as social costs, are weighed more heavily than others. Due to the wide breath and material covered under the law of negligence, this
essay ... Show more content on Helpwriting.net ...
Furthermore, the Ann's test similarly reflects this notion of limiting potential claims by specifying a 'sufficient relationship of proximity based upon
foreseeability' between claimants and taking considerations on policies which could negate a duty of care. This explicit acknowledgement of policy
considerations illustrates how the courts are keen to prevent the floodgates opening, as a large volume of new claims could swamp the court's
resources. However, in particular to the Anns test, the incremental growth of law and the implementation of the Caparo test didn't emerge from a
lack of policy consideration, but rather from no recognition of previous policy, as 'it was not necessary to bring the facts of that situation within
those of previous situation where a duty of care had been held to exist' within the Anns test. This draws parallels with Lord Toulson's idea of an
'argument by analogy for extending liability' . The fact that there was no homage paid to previous case law in determining a duty of care may
contribute to the necessity of implementing the 3 stage Caparo test , as it is necessary for courts to be consistent in their rulings so that people know
where they stand under the law. This notion is supported by the

Caparo Industries Plc Vs Dickman Case Summary
Citation FactsJudgment
Caparo Industries Plc v Dickman (1990) 2 AC 605Caparo relied on the audited financial statements of a publicly listed company to purchase additional
shares with a view to affecting a takeover. Caparo alleged the auditors (Touche Ross– now Deloitte) were negligent in certifying that the financial
statements showed a true and fair view of the company's position.
The issue before the House of Lords was whether the auditors owed a duty of care to individual shareholders.The House of Lords unanimously held
that the auditors of a public company did not owe a duty of care to individual shareholders in a company or prospective shareholders.
Bridge LJ (at 618):
In addition to the foreseeability of damage, necessary ingredients ... Show more content on Helpwriting.net ...
The HCA has unanimously held at 579 [49]:
What has been described as the three–stage approach of Lord Bridge of Harwich in Caparo Industries Plc v Dickman does not represent the law in
Australia. Lord Bridge himself said that concepts of proximity and fairness lack the necessary precision to give them utility as practical tests, and
"amount in effect to little more than convenient labels to attach to the features of different specific situations which, on a detailed examination of all
the circumstances, the law recognises pragmatically as giving rise to a duty of care of a given scope".
The judgment instead emphasises the importance of developing novel duties by reference to principles of general application (at [49]) and ensuring
that any new duties imposed are consistent with parties' existing obligations (at [60]).
The HCA did not make any comments on the correctness of the ultimate finding in Caparo that auditors did not owe individual shareholders a duty of

White V Jones Case Study
Abstract:
The case of White v Jones [1995] is a famous case in the English tort law which concerns the liability of solicitors to the beneficiaries of the will with
whom they have no contractual relationship if they performed their work negligently. This case raises the questions of professionalnegligence, the third
party beneficiary (relationship) and the duty of care. In the case of White v Jones the Court of Appel followed the statement of Vice–Chancellor
Megarry in Ross v Caunters [1980] : "In considering the liability question, it is of the utmost importance to keep in mind that if there is no liability,
the result is striking: the only person who has a valid claim against the solicitor has suffered no loss, and the only person ... Show more content on
Helpwriting.net ...
Another significant part of the process of the decision in the case of White v Jones is the case of Robertson v Fleming [1861] . Sir Donald Nicholls
V.–C. expressed his disagreement with the decision in Robertson v Fleming [1861] which was that in the absence of a contract between a solicitor and
a third party, the solicitor was not liable to the intended beneficiary. Lord Campbell L.C stated his opinion on this decision:
"If this were law a disappointed legatee might sue the solicitor employed by a testator to make a will in favour of a stranger, whom the solicitor
never saw or before heard of, if the will were void for not being properly signed and attested. I am clearly of opinion that this is not the law of
Scotland, nor of England, and it can hardly be the law of any country where jurisprudence has been cultivated as a science."
The House of Lords in White v Jones [1995] held that the law had moved on from the time of the case of Robertson v Fleming [1861] and that the
court was free to depart/ stray from the views expressed in

The Neighbourhood Principle
Has The Neighbourhood Principle failed?
"My neighbour asked me if he could use my lawnmower and I told him of course he could, so long as he didn't take it out of my garden."1 This is
the concept which most people tend to associate the word 'neighbour' with. However, in the court room, the word makes a decisive shift away from
this traditional meaning and endeavours to establish to whom a common law duty of care is owed. The law has expanded considerably by the onset
of the concept of foreseeable plaintiffs which is almost 80 years in existence in the UK. It is evasive in determining "whether proximity should now be
regarded as a discrete analytical concept around which arguments may be constructed, or merely as a slippery expression ... Show more content on
Helpwriting.net ...
"if it was imposed for the benefit of that someone else;"13 and duties owed to no one in particular i.e. if it was not imposed for the benefit of a
particular individual but was imposed for the benefit of the community as a whole or for the benefit of some section of the community."14 In an ever
conscious society, there was much need for the modernisation of the law with regard to the wider duties and especially the neighbourhood principle.
The Anns v. Merton15 case brought about the 'two–stage test' in order to ascertain
8 9
Kirby v. Burke [1944] I.R. 207 Smith v. Howdens Ltd. [1953] N.I. 131, 137, per Lord MacDermott C.J. 10 Smith v. Scott [1973] Ch. 314 11
Commissioners for Railways v. McDermott [1967] A.C. 1054 12 Commissioners for Railways v. Quinlan [1964] A.C. 1054 13 Bagshaw, R. and
McBride, N., 'Tort Law', (Pearson Education Limited, Essex, 2001) at 3 14 Ibid at 3 15 Anns. v. Merton London Borough Council [1978] A.C. 728
the existence of a duty of care in negligence. Lord Wilberforce initiated the requirement of: I. II. "A sufficient relationship of proximity based upon
foreseeability"16 And secondly, the deliverance of reasons as to why a duty of care should not exist. In 1990, concerns arose with regard to the duty
of care.17 "Lord Bridge and Oliver in Caparo sought to remove any temptation on the part of the practitioners to view proximity as a discrete legal
concept capable of precise application

Hypothetical Case: Breach Of Fiduciary Relations
CIA 1
COMPANY LAW 2 submitted by Akshya Prakash
1216067
6BA LLB A
In this hypothetical case the main issues dealt with are
1.Breach of fiduciary duty
A fiduciary relationship is mainly the idea of faith and confidence and is established when another person accepts the confidence given by one person.
The duty of a fiduciary includes loyalty and reasonable care by the person in custody. All the fiduciary actions are performed for the advantage of the
beneficiary.
As a separate legal entity or juristic person which exists apart from its
Management and shareholders, a company must necessarily act through individuals. The functions and responsibilities of corporate directors, who are
entrusted with its management, arise by virtue of this nature of a company. Company management can only be effective if those who manage are
allowed a certain measure of freedom and discretion in the exercise of their function. Contrarily, effective control of management is vital in the interests
of the company itself and its various stakeholders.
As fiduciaries directors must not place themselves in a position in which there is a conflict between ... Show more content on Helpwriting.net ...
3.Breach Duty to disclose
In the case there is clear breach of duty when the shareholders of problem partially owns the shares of the problematic and suring the time of the
resolution the problematic did not disclose the resolution that was been passed and that there was one director who voted against the strategy and they
didn't try to look into the criticism of the resolution where they just focused on one aspect of the business.
Directors will be in breach of duties of care and perhaps loyalty if they take no or inadequate steps, but such conclusion would require analysis of the
other director's action (or in action) under the principles.
4.Breach of statutory

Construction Ltd Built A School
Silverline Construction Ltd built a school. Shortly after completion, when Emma was walking by, several roof tiles slipped from the roof and
smashed on the ground in front of Emma. Flying debris hit Emma causing serious facial injuries and concussion. Emma could not carry out her
job for 6 months, due to her injuries and was scared to leave the house for several weeks following the incident. (a) Does Emma have a cause of
action in negligence against Silverline Construction Ltd? (b) If Silverline are found to be negligent, for what losses would Emma be able to claim
Yes, Emma has a cause of action in Negligence again Silverline Construction Ltd. The Tort of Negligence put the claimant in the position to prove
that the defendant owed to them a duty of care, the defendant breached that duty and the claimant must have suffered damages as result of that
breach (Donoghue v Stevenson [1932] AC562). For the Caparo test (Caparo Industries Plc v Dickman [1990] 2 AC 605) the claimant must establish
the foreseeability of the harm and a relationship proximity between him and that defendant. After the Court will listen to the defendant and decide if
it is fair, just and reasonable to impose a duty of care. To decide if there is the foreseeability of harm the Court will analyse what another reasonable
person would do in the Silverline's position. Silverline is a professional society and they are expected to meet standards of safety that any other of that
professional person

Pure Econom Ic Loss And Consequential Economic Loss
There is a fundamental distinction between Pure Econom–ic Loss and Consequential Economic Loss, as Pure Eco–nomic Loss occurs independent of
any physical damage to the person or property of the victim. What is common to both types of claims is that in order to successfully claim or even
"have a leg to stand on" there must be proof of a" duty of care" having been broken. As long as you can show the defendant has breached their "duty of
care" and you have suffered foreseeable damage then you can recover. The problem with Pure Economic Loss is that the classes of people who can
recover is very limited. The Courts have tried to keep it this way in order to keep the number of claimants as low as possible. The fear is that if claims
for purely economic loss are allowed then it would encourage more claims of this type. Chief Justice Cardazo from America stated 'Recovery of
economic loss in the absence of physical damage or per–sonal injury would expose defendants to liability in an in–determinante time to an
indeterminante class.' This general rule applies in Scotland, meaning that if there is no liability for causing Pure Economic Loss, this is be–cause of the
Courts reluctance to open the floodgates to an infinite number of claims. The rules for how the Courts respond to these claims are set out in Common
Law which has evolved over the years, where patterns have formed and have now established one of the vital legal frame–works for Delict Law in
Scotland. A crucial case

Economic Loss
Economic Loss Economic loss suffered by the C will be regarded as pure if they do not flow from any personal injury to the C nor form any
physical damage to their property. The boundaries between pure economic loss and loss which is consequential upon physical damage to the C's
property were investigated by the CoA in Spartan Steel v Martin (1973) QB 27 Like psychiatric injury, pure economic loss is often described as a
problematic form of damage. Although floodgates arguments are sometimes encountered in this area, there are other reasons why a duty to take care
not to cause foreseeable economic loss to the claimant is not always appropriate. Hale J, McLoughlin v Jones (2002) Psychiatric injury is different in
kind from economic... Show more content on Helpwriting.net ...
To recognise a duty here would make significant inroads into the rule of contrast, because these cases involve a bad bargain rather than harm to
separate property. This approach is more controversial when applied to realty (specifically buildings) rather than chattels, and in these cases
Murphy v Brentwood has been rejected in a number of common law jurisdictions. 3. Economic loss is caused by reliance on negligent statements.
This kind of case was the subject of the key decision in Hedley Byrne v Heller. Hedley Byrne set out specific criteria for recognisisng a duty of care
where the C has relied upon a statement maid by the D. there is much debate surrounding the exact criteria set out in Hedley Byrne and concerning its
rationale and limits. The relationship between the Hedley Byrne criteria and the three stage test under Caparo v Dickman continues to cause
problems. 4. Extended Hedley Byrne principle. Hedley Byrne liability has been recognised as extending beyond its particular context, in which
statements were delivered by one party directly to another party. First, Hedley Byrne liability has been extended to cases that involve more than one
party, including some where the claimant does not rely on the statement at all. Second, liability on the basis of Hedley Byrne has been found outside
the area of negligent statements, including cases of professional services more

How, if at all, does the liability of a university differ...
Intro To Business Law N1072
University of Sussex
Word count: 1099
December 4, 2013
Critically evaluate, in relation to the common law duty of care, the liability of employers for references. How, if at all, does the liability of a
university (such as the University of Sussex) differ regarding references given to potential employers in respect of current (or former) students.
Employers have a certain degree of liability when making statements in a former employee's reference. Employees and employers have a duty of care,
to provide valid descriptions of an individual's quality and potential as a former employee, and thus a reasonable reference is, truthful and fair. It is up
to employers to thus avoid inaccurate ... Show more content on Helpwriting.net ...
Itwas decided that if the "representor gave information–or advice which was negligent he would be liable for any pecuniary or personal
damage–caused"5. However the appeal was dismissed due to the fact that with "the absence of a contract or fiduciary relationship" the defendant that
used a disclaimer would owe no duty of care.6 The case was significant in that claims on negligent misstatement could work if; there is a special
affiliation among parties, the information provided by a party has a voluntary assumed risk, the plaintiff has to deem the information reliable, and
finally the reliability of the information must be applicable.
In Caparo Industries plc v Dickman7, it was determined that courts had to test the duty by "whether the damage was reasonably foreseeable, whether
there was a relationship of proximity between claimant and defendant, and whether it is just and reasonable to impose a duty."8 If so, then a duty of
care could arise.
Spring v Guardian Assurance plc9 is key for this discussion. The claimant "won the case on grounds of the defendant's negligence".10 The defendant
owed the claimant a duty of care in terms of providing a reference. However, there was a partial split in decision between the judges on the defendant's
rejection of liability towards the reference. The Hedley Byrne fundamentals of proximity argued the case focused on

White V Jones Case
Abstract:
The case of White v Jones [1995] is a famous case in the English tort law which concerns the liability of solicitors to the beneficiaries of the will with
whom they have no contractual relationship if they performed their work negligently. This case raises the questions of professionalnegligence, the third
party beneficiary (relationship) and the duty of care. In the case of White v Jones the Court of Appel followed the statement of Vice–Chancellor
Megarry in Ross v Caunters [1980] : "In considering the liability question, it is of the utmost importance to keep in mind that if there is no liability,
the result is striking: the only person who has a valid claim against the solicitor has suffered no loss, and the only person ... Show more content on
Helpwriting.net ...
Who, then, in law, is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to
have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question."
The principles in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] and Donoghue v Stevenson [1932] was confirmed in White v Jones [1995] .
The significance of the case of Caparo Industries Plc v Dickman [1990] lies in the Caparo test which is stated by Lord Bridge:
"What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there
should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of "proximity" or
"neighbourhood" and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a
given scope upon the one party for the benefit of the

Legal systems: Duty of Care and Negligence
Legal systems are critical to the functionality of any given society. In particular, issues of duty and responsibility are fundamental to address especially
when one party causes harm or injury to another. In this respect, the concept of duty of care and its connection to negligence serve a key role in the
society. Tort law provides for legal processes following acts of negligence that exhibit duty of care. The underlying liability in negligence, however, is
limited because duty of care must be justified before the courts.
Acts of negligence could result in many different forms of harm or injury. Under thecommon law, acts of negligence could result in physical injury,
psychological harm or economic loss. These outcomes equate to a given ... Show more content on Helpwriting.net ...
In other words, the negligent act or conduct of the defendant must pass the test of foreseeability. Without showing that the harm was reasonably
foreseeable, the underlying liability becomes critically limited.
The courts' ability to limit liability is not only rooted in reasonable foreseeability of the harm but also in the link between the harm and the defendant's
conduct. In other words, the foreseeability of the harm must be as a result of the defendant's conduct. Liability becomes embedded in this requirement,
thus limiting the adoptability of the case by the court. In the event that reasonable foreseeability lacks to connect to the conduct of the defendant, the
defendant's liability becomes limited.
Foreseeable harm and the conduct of the defendant constitute the first part of the three–way system that courts use to limit liability in negligence. The
second principle that courts employ relates to the defendant–claimant relationship and the proximity between the two parties at the time of the alleged
negligence. Courts require that allegations of negligence be accompanied by a relational proximity. As earlier mentioned, parties to a case of
negligence must have interacted in one way or another.
The case law principle of proximity between parties allows courts to limit liability in negligence. Failure to evidence a relationship of proximity
subject to the provisions of duty of care leaves the defendant with little or no

The Importance Of Duty Of Care
Duty of care is the legal obligation of person or organization to take reasonable care and measures to avoid any behaviours or omissions that could
foreseeably harm others. Originally, foreseeability is the element appeared to be the sole determinant of duty of care and it was developed by the
'neighbour' principle – Donoghue v Stevenson. However, currently three–stage approach from Caparo Industries plc v Dickman is the latest test,
which consist of foresight, proximity as well as fair and reasonable. Donoghue v Stevenson is one of the famous case in English law which shows
that the existence of a duty of care. On August 26 1928, Mrs Donoghue severed gastroenteritis due to the consumption of about half of the beer made
by Stevenson that contained decomposed remains of a snail in the bottle by accident. However, Mrs Donoghue was not able to claim through breach
of warranty of a contract due to she was not privy to any contract. This case was then delivered by Lord Atkin in year 1932, where established that
Stevenson should be responsible for the well–being of individuals who consume his products. This case produced controversial 'neighbour principle',
which extended the tort of negligence beyond the tortfeasor and the immediate party. An English tort law case on pure economic loss resulting from
negligent misstatement, Hedley Byrne & Co Ltd v Heller & Partners Ltd. Hedley wanted to check their customer, Easipower's financial position and
therefore asked for a credit

The Importance Of Relation To The Common Law Duty Of Care
Introduction:
Job references are crucial as they can be a deciding factor in whether or not a person will get a job. Therefore, they should reflect a person
accurately, and if they do not, it is important to question if the employer is liable for writing a bad reference. This will be discussed in relation to the
common law duty of care, as well as being linked to the liability of Universities in respect of students.
Discussion:
Firstly, it is important to establish whether the employer owes a duty of care or not. The case of Caparo v Dickman resulted in a three stage test
about duty of care and to address responsibility in determining where the liability of the financial loss lies. The test ruled "The harm caused by the
negligent actions must be reasonably foreseeable; the relationship between the parties to the dispute must be one of reasonable proximity; and it
must be fair, reasonable, and just to impose liability." This test provides a qualification for establishing duty of care. Linked to this, in the Spring v
Guardian Assurance case it was decided that there was a duty of care owed to the employee. If they duty is violated, then the liability of the
economic losses suffered by the employee are given to the employer. Lord Woolf believed that it was necessary for the employer to be liable in
damages as the law of defamation does not provide adequate remedy for damages caused as it requires malice not just negligence.
Another way to indicate duty of care is using the

Caparo Industries Vs Dickman Essay
Although the Health and Safety at work etc. Act 1974 provides criminal legislation for employers, there are various key health and safety
requirements that identify a duty of care owed to an employee by an employer, that have been set via precedents. This essay aims to identify the key
health and safety requirements owed by an employer to an employee, deriving from common law, including the principle of vicarious liability
Common Law
The case Caparo Industries v Dickman is a leading case that identifies a test to determine whether or not an employer owes a duty of care within a
negligence case. In this case Caparo Industries had taken over a company called Fidelity and they seud Dickman for negligence in the preparation of
accounts. Sir Neil ... Show more content on Helpwriting.net ...
In this case a warden in charge of maintain discipline in a boarding house, sexually abused boys aged between 12 and 15. His duties where to
ensure order, make sure children went to bed, school and took part in organised activities. Lord Steyn was satisfied that the employers entrusted
the warden with caring for the children at the boarding home. He stated that "the wardens acts were so closely connected with his employment
that it would be fair and just to hold the employers vicariously liable". This went against the Salmond test, which Lord Steyn deemed inadequate,
providing an example of how the current test could deem a bank not liable for a employee defrauding a customer and pocketing money unless the
bank was set up to defraud customers. In this case the Salmond test would find the employer not liable, as it was not his job role to sexually abuse
the children. Steyn's new close connection test focused on three main principles; a broad approach should be adopted when considering the scope of
employment, the time and place of the act should not be conclusive in reaching a decision, and there must be a connection between the employees
duties and the acts committed. This test is fairer in identifying whether an employer should be held vicariously liable. The expansion of this scope of
employment is further visited in the case Dubai Aluminium Co Ltd v Salaam and Others where a dishonest fraud act by an employee was also
deemed as being closely connected with the scope of employment, so therefore the employer could be held liable for an employees dishonest actions
during the ordinary course of business, so they were deemed joint liable with the

Hanssen's Duty Of Care
May it please the court that my name is Griffiths initial A, and I appear on behalf of the plaintiff Darcy Hanssen, in this matter. The facts of the case
are not disputed, your honour. This incident concerns the tort of negligence whereby the Hanssen family seek compensation. Lifetime grievances have
been sustained following the breach of "Duty of Care" from medical personal from the Peninsula Private Hospital, during the course of his birth. Your
Honour, the plaintiff requests the disclosed amount be paid following the trail. As costs are extensive and necessary for Darcy's medical well fare, the
asking amount is to be in the millions.
My client, your Honour, asks that those responsible for the safety of his birth be held liable for damages ... Show more content on Helpwriting.net ...
Volenti non fit injuria or in translation 'to one who volunteers, no harm is done' is a defence tonegligence claims. The defence of volenti non fit injuria
requires a freely entered and voluntary agreement by the Claimant, in full knowledge of the circumstances, to absolve the Defendant of all legal
consequences of their actions outlined in the Law Reform (Contributory Negligence) Act 194.
However, unlike defined declarations, my client Darcy Hanssen knew of no such risk. In fact, in no way could Darcy have comprehended the
possibility of injury being not yet born. As for presumed submissions of consent to engage in risky procedures, my client and his mother did not
consent to such procedure. In fact, as nature intended, Penny Hanssen had no choice but to go into labour. Infact she approached Peninsula Private, for
aid in the birthing process. A decision she never thought would cause severe

Erin May Be Liable For Tort Of Negligence
Going by the scenario of incident given in the pleasure boat mishap, Erin may be liable for tort of negligence – where a person's conduct falls below a
reasonable standard and harms another.
However, in order for there to be a successful claim against Erin in the court, the following elements of tort of negligence has to be established; that she
owe a duty of care to any potential claimant, that she has breached that duty of care, that her breached of the duty of care caused the harm suffered by
the claimant, and that the damage was not legally too remote.
The court will also consider whether Erin 'foresaw' the harm and whether the parties acted in a reasonable way.
There is the possibility that Erin might be liable to several parties which includes; each of the holidaymakers on board the pleasure boat at the time of
the accident (subsequently referred to as holidaymakers), the estate of Rio and Anya (dead victims), and Sneha, Wayne and Zak (mental breakdown
victims).
We will take each potential claimant case one by one.
The Holidaymakers v Erin
For the holidaymakers to make a successful claim against Erin, they must first of all establish that a duty of care exited between them and Erin.
Applying the test for duty of care as established in the case of Caparo Industries v Dickman [1990] 1 All ER 568; would a reasonable person foresee the
possibility of the claimant suffering damage as a result of the defendant's negligence. In the case of Erin, it could be argue that a

Bannerman Clause Pros And Cons
The Bannerman clause sets out to protect the auditors, intern one looks to see how this clause erodes the professional image of the accounting
profession, while limiting the audit report to addresses.
The Bannerman clause is a direct consequence of the court case between Royal Bank of Scotland (RBS) and Bannerman Johnstone Maclay and Others
(The Royal Bank of Scotland v Bannerman Johnstone Maclay and Others, [2002]). The firm APC LTD employed Bannerman as an auditor; Bannerman
audited APC's financials and prepared an audit report for the directors of APC, subsequently APC sent the audited financial statements to RBS. The
financial reports and audit statement were used to secure loans to APC. RBS argued that Bannerman owed a duty of care to RBS, as third parties
would rely on the audited ... Show more content on Helpwriting.net ...
The Institute of Charted Accountants of England and Wales (ICAEW) issued a technical bulletin Audit 01/03 recommending that audit reports now
should have disclosure limiting liability (The Institute of Chartered Accounants In England and Wales, 2003). On the opposite side of the argument the
question was raised as to whether the added disclaimers undermine the accounting profession and raise more unanswered question than they leave
answered. The Association of Chartered Certified Accountants (ACCA) issued a technical factsheet regarding this disclosure stating the "their
incorporation as a standard feature of the audit report could have the effect of devaluing that report" (Technical Factsheet 84– The Use of Disclaimers
in Audit Reports, 2004). Meanwhile, academic circles seemed to follow the factsheet from ACCA, Dr Hooper agued that the "disclaimers undermine
the concept of public interest and are more like a screen to legitimate the profession (Hooper & Xu,

Maxim In The Wagon Mound
1.The main purpose of the maxim is to avoid injustice to the plaintiff as otherwise the plaintiff would be required to prove the details of the cause of
the accident, which he may not know. As stated by NH Chan JCA in Teoh Guat Looi v Ng Hong Guan, res ipsa loquitur was in essence no more than a
common sense approach to the effect of the evidence in certain circumstances. It means that a plaintiff prima facie establishes negligence where it is not
possible for him to prove precisely how the accident happened, but on the evidence as it stands, he manages to show that the accident could not have
happened without the negligence on the part of the defendant.
One important requirement is that the damage or injury which has occurred must give rise to the presumption that the ... Show more content on
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No. Because before The Wagon Mound, the court was in favour of the direct consequence test which can be seen in Re Polemis and Furness, Withy &
Co Ltd. However, the test rests on the 'fault' principle rather than 'compensation', whereby once a person is established to have committed a tort, he has
to bear all the losses that arises as a consequence thereof. Consequently, the court uses the reasonable foresight test in The Wagon Mound, as the Privy
Council ruled that Re Polemis should not be considered good law.
4.The Wagon Mound is the accepted test in Malaysia, approved in the case of Government of Malaysia v Jumat bin Mahmud & Ors.
5.In Bolton v Stone, the HOL held that the distance between the place where the ball was hit to the edge of the field which was surrounded by a
seven foot wall made injury to the plaintiff rather remote. A person must only take reasonable steps against risks that may be materialise. Thus the
cricket club was held not liable for allowing cricket to be played without having taken extra precautions, such as increasing the height of the fence. On
the facts, the freak kick has hardly ever happened before. Therefore, the school has no liability towards

Case Analysis: Mitchell V Glasgow City Council [2009] Ukhl...
Case analysis: Mitchell v Glasgow City Council [2009] UKHL 11; [2009] AC 874; AER 205 The claimant of this case was the widow and daughter
of Mr Drummond. They brought a claim against the council for damages in negligence, the essential legal complaint was that the local authority had
failed to warn the deceased about the meeting before, and that they acted in a way that was incompatible with his right to life, under Article 2 of the
European Convention on Human Rights. The Court of Session (Scotland's equivalent to the High Court) at first dismissed the case in 2005, but in
2008 the court allowed the hearing of the case, also known as "proof before hearing".Unanimously the Lords allowed the local authority's appeal and
dismissed the... Show more content on Helpwriting.net ...
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". Nevertheless, In the case of Mitchell there is evidently a relationship and closeness between the two parties, the
council and the tenant. In the case of Sutradhar v Natural Environment research Council, Lord Brennan said that a key factor in deciding when there
was proximity was whether the defendant has "a measure of control over and responsibility for the potentially dangerous situation". In the case of
Mitchell, as the local authority it is obvious that the council do have responsibility for their tenants, but the extent to which this duty reaches the
remit of the authority its seems is only when there is a close organisational association for which it an association for blame can be made. The act
third parties in particular criminal acts falls out of this remit. Evidently, In Mr Mitchells case there was sufficient proximity to give rise to a duty of
care, and that there was some scope for the claimants. In the case of Attorney General of the British Virgin Islands v Hartwell a police authority was
held to owe a duty

The Pros And Cons Of Negligence
Introduction.
Negligence is a central topic in the vast area of Law– Tort. It is largely due to Negligence being by far most practiced by Tort lawyers with huge
number of litigations each year. As per Sir Percy Henry Winfield:
Negligence "is the breach of a legal duty to take care which results in damage, undesired by the Defendant to the Claimant."
In other words, it is a failure to exercise that degree of care, when law requires for the purpose of protection of individuals, their properties and their
financial interests. A duty of care is a legal obligation to safeguard individuals who can be considered your neighbours from harm: (in your care, your
children, students, employees, etc.). For there to be a successful claim for negligence, ... Show more content on Helpwriting.net ...
Mr. Stovin, the Claimant, was knocked off his motorcycle by Mrs. Wise's car, the Defendant, and became injured. The Defendant claimed that the
accident occurred because visibility of traffic on the junction was obstructed by a bank of earth with a fence. Thus, she claimed that Norfolk
County Council (NCC) failed to maintain the junction in safe to use order, and therefore were liable. In the court of first instance the judge agreed
that NCC owed a duty of care to the Claimant and were 30% liable to compensate Mr. Stovin. Mrs. Wise was 70% responsible for compensation to
the Defendant. But on appeal to the House of Lords the Defendant NCC were found not liable. Held: the Council were not liable on the basis of pure
omission. In a space of twelve years there had only been three accidents which was not enough to render that the junction was dangerous. The minimum
threshold for junction to be considered dangerous would need to have five accidents in a space of three

Negligence
EXISTENCE OF A DUTY
Before 1932 there was no generalised duty of care in negligence. The tort did exist and was applied in particular situations where the courts had
decided that a duty should be owed, eg, road accidents, bailments or dangerous goods. In Donoghue v Stevenson [1932] AC 562, Lord Atkin
attempted to lay down a general principle which would cover all the circumstances where the courts had already held that there could be liability for
negligence. He said:
"The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer's question, Who is my neighbour?
receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee... Show more content on
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Foreseeability and proximity
'Foreseeability' means whether a hypothetical 'reasonable person' would have foreseen damage in the circumstances.
'Proximity' is shorthand for Lord Atkin's neighbour principle. It means that there must be legal proximity, i.e. a legal relationship between the parties
from which the law will attribute a duty of care.
Note that a duty of care may not be owed to a particular claimant, if the claimant was unforeseeable. See:
Bourhill v Young [1942] 2 All ER 396.
The role of policy
Policy is shorthand for 'public policy considerations'. Policy considerations were recognised in the Wilberforce test and the test in Caparo v Dickman.
Arguments that an extension of liability for negligence would lead to a flood of litigation or to fraudulent claims were once granted greater credence
than they are today. But other arguments, such as the possible commercial or financial consequences, the prospect of indeterminate liability, the

possibility of risk–spreading (e.g., through insurance)

The Accounting Firm Hatchet And Co
A) The accounting firm Hatchet & Co ("Hatchet"), could be sued by Giant plc. ("Giant"), as in their audit, the company accounts has been overstated,
causing initially a rise in the shares value but then naturally a drastic fall when Giant was found to be making losses. The accounting firm is also
thought to be liable towards some shareholders as Gloria and Henry, which lost the money they invested in the company. Hatchet, being an Accounting
firm and thus treated in the low of torts as a professional entity has a duty of care towards the public limited company Giant under the United Kingdom
company law, and it could be sued for professional negligent misstatement. Hatched might also be sued by Gloria and Henry which relied on the
accounts for their investments. The profit was accounted to be ВЈ10 million while Giant was truly making losses, that drove the investments up and the
director of Giant invested $2 millions in a new venture while Henry and Gloria bought respectively 10'000 and 1'000 shares more. Here, the claimants
in order to succeed have to show: – The existence of a duty of care, which was owed to him by the defendant – Then they have to prove the breach of
that duty by the defendant – At the end a damage caused by the negligent action, has to be proved by the claimants. Now I will analyse if those three
cases are likely to be happened in this situation. In relation to the duty of care, it is fundamental to know that it depends on the judges to decide

Third Party Liability in Audit
TATIANA MOLODCHIKOVA S42724155 ACCT 7103
TOPIC 1 (THIRD PARTY LIABILITY)
WORD COUNT 3000
The liability of auditors to third parties has been the subject of much litigation. Litigation claims against accountancy firms have increased
dramatically in the last thirty years. Previously, such cases were rare and were viewed with great interest. Nowadays, whereas still treated with great
interest they are becoming all kind of common. The specific area of auditors ' liability to third parties is an extremely complex area. As there is no
contractual claim for recovery of losses, third parties take action in tort. Some time ago it was believed that recovery of losses ... Show more content on
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The court ruled in favor of Touche. (Gomez 2003; Ultramares v Touche 1931) Basically, The judge, found for the auditors and his reasoning has been
followed in many subsequent cases. He argued that to make audit firms liable to third parties would be wrong as it would expose auditors:"
...to a liability in an indeterminate amount for an indeterminate time to an indeterminate class."
Essentially he could see that if he found for the plaintiff, then in theory anyone who had lent money to a company or invested in a company, and did
not receive a satisfactory return, could argue that the only reason they had acted in this manner was because the auditors had stated the accounts were
fairly stated. This would have imposed an intolerable burden on audit firms. (Cooper, Barkoczy, Ling, 1994)
Subsequent case such as Candler v Crane Christmas & Co took place in UK in 1951. Managing director of a company asked defendants to draw up the
company's accounts and balance sheet. Clerk employed by defendants did so, knowing the documents would be used to induce investors to invest in the
company. The accounts were prepared negligently, and on their basis the plaintiff was misled into investing money in the company. The company went
into liquidation and the investor lost the money. The courts ruled that, although the accountants had acted negligently, they did not have a contract with
Candler and therefore did not owe him a duty

The Pros And Cons Of Tort Law
Within Tort Law it has been acclaimed by most, that UK courts are not in favour of negligent claims brought against the police force. 'There is no
doubt that a police officer owes a duty to protect the public' However, in many regards the police aren't found to be guilty to owe any such duty. The
Tort of negligence proclaims that one must be owed a duty of care to claim, otherwise negligence caused to the claimant due to the conduct of the
defendant, is held without regard. As stated in the Police Act 1964 "The chief officer of police for any police area shall be liable in respect of torts
committed by constables under his direction"
It was firstly suggested that the 'courts show willingness to invoke public policy principles of immunity where certain groups of defendants were sued
in negligence' , to which the case facts in Hill v Chief Constable of West Yorkshire Police [1988] will shine light on. Moreover, one may suggest that
the emergency services should be free to carry out their line of work without the conscious threat of liability. If one was to act in such a way as that
which threatened overriding liability, it is questionable as to whether an officer would act in a defensive state of mind, as stated by Lord Keith in Hill .
It may well be considered that the courts specifically deny claims against the emergency services, invoking public policy, as observed in Capital
and Countries Bank plc v Hampshire CC [1997] and John Munroe Ltd v London Fire and Civil Defence Authority & Others [1997] . The fire
brigade, like the police force are too exempt on the grounds of no duty is owed to an individual if an emergency call is not responded to.
Policy is essentially concerned with the notion of Duty of care and maybe considered the fourth element required for a negligence claim, primarily
used to disregard claims against the police.
The principles of duty of care are centred around the cases of Donoghue v Stevenson (1932) , Hill and Caparo Industries PLC v Dickman [1990] .
The case of Donoghue v Stevenson [1932] has been instrumental to the foundations of Tort Law, following the notion that since this case 'negligence
has rapidly developed into the cornerstone of our system for compensating

The Case Of Negligent Misstatement

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The Case Of Negligent Misstatement