Ch.4 - Negligence

Also includes tort

Tort

A breach of legal duty e.g. car crash or selling fake goods

Limitation Period when in Contract

Six years from the breach

Limitation Period in Tort

Six years from the tort, three for personal injury

Three Conditions for Tort

Act or omission by defendant, claimant directly harmed, legal liability that courts can establish

True or False: Negligence is a type of tort

True

Three Conditions of Negligence Claimant Must Prove

Duty of care owed, breach of duty, breach caused the damage

Neighbour Principle

Duty of care owed to anyone considered as affected by ones actions

Four Tests of Duty of Care

Reasonably foreseeable, public policy, sufficient proximity, fair and reasonable

Who is responsible for proving breach of duty?

The claimant unless res ipsa loquitur applies

Res Ipsa Loquitur

The facts speak for themselves

Negligent Misstatement

‘Special relationship’ between parties creates duty of care and bad advice is knowingly given 

Three Defences to a Claim in Negligence

Contributory negligence, exclusion clauses, volenti non fit injuria

Exclusion Clauses

Limits or excludes liability e.g. disclaimer

Volenti Non Fit Injuria

Applies when claimant has freely consented to the risk of loss

Vicarious Liability

One person being liable for another’s actions e.g. employer responsible for employee

Why is vicarious liability advantageous for a claimaint?

Likely that an employer can recover loss through liability insurance

Vicarious Liability Requirement 

Act must be related to employee’s role and in course of their employment 

What does vicarious liability not depend on?

The efforts of the employer

Vicarious Liability with Agency

Both the employer and the agency company can be liable

Four considerations when deciding if someone has acted negligently

Body of opinion, advantage and risk, emergency, vulnerability

Body of Opinion

If defendant’s action is part of an approach supported by a body of professional opinion, no breach to duty of care.

Advantage and Risk

Court will weigh up the benefit and risk of defendent’s actions 

Vulnerability

Higher duty of care owed only if defendant was aware

3 ways of identifying a special relationship

Does defendant give professional advice, was the advice given in a business context, did the defendant know their advice would be relied on

Volenti non fit injuria translation

To a willing person, injury is not done

Negligent Misstatement

A false statement made carelessly

What makes a misstatement negligible?

If it causes someone financial loss because they reasonably relied on it

Reasonably relying

Must be a ‘special relationship’

If there is no special relationship between parties…

…there is no duty of care

Audit Duty of Care

Owed to company as a whole, not owed to individual shareholders for investment decisions,

Reason for Audit Duty of Care

Audit purpose is to inform the company, not guide investment choices

What must be reasonably foreseeable for damages to be recoverable in negligence?

The type of damage suffered 

Example of Reasonably Foreseeable (Coffee Spill)

Someone slipping and injuring themselves

Example of NOT Reasonably Foreseeable (Coffee Spill)

Someone slipping and knocking a computer over which causes a major data loss