Pure economic loss/ negligent misstatement structure

summary

- intro

- duty of care -> foreseeability

- duty of care -> proximity (a special relationship - special skill)

- D knows or ought to know the purpose for which advice is sought

- D knows or ought to know that C is highly likely to rely on the statement

- D has voluntarily assumed responsibility for the statement

- C has relied on the statement to his detriment

- C reasonably relies on the statement

- fair, just, and reasonable

- factual and legal causation

- defences and damages

Intro

C [NAME] may have a claim for negligent misstatement. Generally, the law does not allow claims for pure economic loss (Weller or Spartan Steel) but Hedley Byrne v Heller held that a claimant can sue for negligent misstatement where there is a "special relationship". The ordinary rules in Caparo v Dickman for proximity are modified.

Duty of care - Foreseeability

Here, some harm in the form of economic loss to someone in C's position is reasonably foreseeable as a result of D's actions as [APPLY] (Hedly Byrne v Heller).

Duty of care - Proximity - A "special relationship" - special skill

Here, D has a special skill or expertise in relation to the statement as [APPLY] (Esso v Mardon).

D knows (or ought to know) the purpose for which advice is sought

Here, D knows, or ought to know, the purpose for which advice is sought (Caparo v Dickman) as [APPLY].

D knows (or ought to know) that C is highly likely to rely on the statement

It is also the case that D knows, or ought to know, that C is highly likely to rely on the statement. In Smith v Bush the surveyors knew that the buyers were highly likely to rely on their survey even though it was prepared for the building society. Here, [APPLY].

D has voluntarily assumed responsibility for the statement.

D has voluntarily assumed responsibility for a statement, which can indicate the existence of a duty of care (Henderson v Merrett). Here, [APPLY].

C has relied on the statement to his detriment

Here, C has relied on the statement to their detriment as [APPLY]

C reasonably relies on the statement

Lastly, C must show that it was reasonable for him to rely on D's advice. Whether it is reasonable depends on all the circumstances. Since D is an expert. It indicates it is reasonable to rely on the advice.

Where C has directly asked D for advice and the advice has been given directly to him, it may be reasonable for C to rely on it (Goodwill v BPAS). Giving advice in a social situation does not normally give rise to liability (Chaudry v Prabhaker). [APPLY TO SCENARIO - VAGUENESS, INDEPENDENT ADVICE, RELATIONSHIP ETC.]

Fair, just, and reasonable

If there is foreseeability of loss and a special relationship, then it is likely to be fair, just, and reasonable to impose a duty (Hill). Here, [APPLY].

Breach - reasonable man and risk factors

D must reach the standard of a reasonable [PROFESSION] (usually a professional - Bolam). Here, [BRIEF APPLY].

[APPLY 4 RISK FACTORS BRIEFLY] -> (Hayley v LEB) = likeliness, (Paris v Stepney) = seriousness, (Bolton v Stone) = cost and practicality, (Watt v Herts CC) = social benefit

Factual and Legal causation

There is factual causation as "but for" [APPLY] (Barnett v Chelsea). There is legal causation as the type of damage [IDENTIFY ECONOMIC LOSS] was reasonably foreseeable and not too remote (Wagon Mound). Here, [APPLY].

Defence and Damages

IF RELLY: Contributory negligence - it may be possible to argue that C has contributed to his or her loss by their actions. Damages may be reduced under the Law Reform Act 1945 (Sayer v Harlow).

C's remedy would be damages. The aim of damages is to put C back in the position they were in before the tort occurred. C's claim would be for special damages. This is pure economic loss (Spartan Steel) but is recoverable under Hedely Byrne principles.