Tort of Law: Ian vs Who Trades Wins Plc Case - Essay Example

Introduction In assessing whether or not Ian may take action against Who Trades Wins Plc. (WTW) and Marcus will depend on whether the conduct of WTWand Marcus fell “below a standard of care imposed by law.”1 In this regard, Ian must establish that WTW and Marcus owed him a duty of care, was in breach of that duty and that as a result of that breach Ian incurred reasonably foreseeable injury.2 It will also be necessary to consider whether or not Ian can claim damages for breach of duty in respect of pure economic loss.3 Ian’s potential liability for psychiatric injury to liability will also turn on questions relative to the duty of care and the extent to which that duty can be extended to Peggy and her injury was reasonably foreseeable.4 Ian’s possible defence turns on whether or not he can legitimately claim contributory negligence or non volenti fit injuria on the part of the victim: Ben.5 WTW To begin with, a duty of care exists in cases where injury of the kind suffered is reasonably foreseeable, there is proximity between the parties, and the imposition of a duty of care is fair.6 In determining whether or not a duty of care exists it is also necessary to ascertain if the defendant assumed the duty of care and if the plaintiff could have reasonably relied on the fact that the defendant assumed the duty of care.7 In assessing the duty of care in potential claims against WTW and Marcus it is necessary to examine the duty of care in respect of claims for pure economic loss: monetary award where no physical damages are claimed.8 In Hedley Bryne v Heller, it was established that liability for pure economic loss in cases of negligent misstatement arise where the plaintiff is relying on the advice or information of the defendant based upon trust that the defendant will exercise a degree of care and knew or ought to have known that the plaintiff was relying on that information and/or advice.9 In addition, the defendant is required to have represented that he had the unique skills and knowledge with respect to the advice and/or information requested by the plaintiff.10 Based on the facts of the case for discussion there is no doubt that WTC held itself out has having a specific skill and knowledge: investment expertise. Through its agent, WTC as an investment business held itself out as having special investment skills that it ought to know Ian relied on in seeking its services with respect to investing his profits. Based on the special skill and expertise that WTC held itself out to have, the company ought to have known that Ian relied on those special skills and knowledge in entrusting the company with his profits for investment. It is clear, that in seeking the services of an investment company, Ian is relying on their superior knowledge and skill and is therefore expects that upon accepting his profits for investment, WTC is assuming a duty of care.11It is equally clear that Ian is seeking special skills and expertise for a singular purpose12: to maximise the value of his profits to safeguard against the prospect of squandering them. It is also possible that WTC may be liable for fraudulent misstatement in that its agent failed to reveal to Ian the true nature of the investment. WTC’s policy of high risk, high return investments was not disclosed to Ian. Nor was Ian informed of the volatile nature of the investment made on his behalf. It was held in Standard Chartered Bank v Pakistan National Shipping Co., that principles are liable for their agent’s fraud when acting under the authority of the principle.13 On the facts of the case for discussion, WTC’s policy of high risk, high return investment practices placed the agent under pressure to take risks. In doing so, the agent advised Ian to invest in a company that was “highly speculative”. Based on the foregoing discussion, WTC will be liable for pure economic loss suffered by Ian on the grounds of a breach of a duty of care under the tort of negligent and/or fraudulent misstatement. Marcus Marcus, as a solicitor may be liable for damages sustained by Ian as a putative beneficiary under the tenet of the voluntary assumption of responsibility.14 The decision in Ross v Caunters reversed the previous position that solicitors owed only a duty of care to their clients.15 Not only are solicitors required to follow the instructions of their testators, they must also follow those instructions closely and must assume responsibility for failure to follow those instructions which includes consequential loss to third parties: putative beneficiaries.16 The facts of the case for discussion are particularly close to the facts of the case of White v Jones. In White v Jones, a client requested that solicitors to modify a will which as it stood would have left the plaintiff without an inheritance. The modified will would have included the plaintiff. The solicitors failed to modify the will in a timely fashion and in failing to do so, the client died with the result that the plaintiff did not receive the intended inheritance. It was held by the House of Lords that the solicitor did owe the plaintiff a duty of care in the capacity of a putative beneficiary and the loss of the inheritance was reasonably foreseeable and not a remote loss. Thus, the solicitors breached the duty of care by failing to act without unreasonable delay.17 On the facts of the case for discussion, Marcus had received instructions from Mel, Ian’s ex-wife to execute a will in which her entire estate would be left to Ian. Mel’s letter informing Ian of the putative will was received three months prior to her death. However, Ian subsequently discovered that Mel’s instructions to her solicitor had been at least six months old. Even so, Mel’s solicitor had failed to follow her instructions with the result that Ian did not receive the inheritance intended by Mel. Given the fact that the solicitor had failed to prepare the will after a six month delay, will amount to a breach of a duty of care for which Ian’s loss is reasonably foreseeable and therefore not remote. Therefore Marcus is liable to Ian for the economic loss incurred. Possible Defences Against Ben There are possibly two general defences that Ian may claim in respect of the injuries suffered by Ben: non volenti fit injuria and contributory negligence. The main premise of the defence of non volenti fit injuria is that the plaintiff voluntarily exposed “himself to a danger”.18 The test is a subjective one and it requires an examination of the facts and circumstances of the case.19 The question is whether or not the plaintiff given his or her own circumstances was aware of the nature and extent of the risk that he or she took.20Therefore the test is not whether or not the plaintiff acted as a reasonable man would in assessing the risk that he or she was taking. Ben, a 12 year old, obviously took a risk in running across the street without looking. However, the question is therefore whether or not a 12 year old in Ben’s position, familiar with the street and the traffic in the area and most likely aware of the low speed limit took a calculated risk. Since Ben is a minor the court will likely apply the public conscience test in which it may be asked whether or not allowing the complete defence of non volenti fit injuria would shock the public conscience.21 The question is therefore whether or not a minor, rushing to beat registration, might be held responsible for his injuries in circumstances where an adult was driving over the speed limit in what is a school zone during a time where children were likely crossing the street to get to school on time. It seems unlikely that Ian would succeed on a complete defence of non volenti fit injuria. Ian might want to attempt the partial defence of contributory negligence as it would not permit him to fully escape responsibility for Ben’s injuries. In this regard, Section 1(1) of the Law Reform (Contributory Negligence) Act 1945 permits the “apportionment of liability” where responsibility for injuries are shared “to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage.”22 Contributory negligence may also be very difficult for Ian to claim against Ben. Lord Denning stated in Gough v Thorne that a “very young child” cannot be guilty of contributory negligence.23 In this particular case, the child was 13 years old. However, the facts of the case reveal that the child had been hit after a lorry stopped to let the child across the street.24 It is therefore arguable that the facts of the case did not reveal negligence on the part of the child in that she was crossing the street after a vehicle stopped and the driver summoned that she could cross the street. In such a case, it would have been entirely unfair to hold that the child acted negligently. While an adult would have been expected to have known better, certainly the same cannot be said of a child. The main test is whether an ordinary child of the age of the plaintiff would have acted any differently.25 In Jones v Lawrence a seven year old child ran out from behind a stationery vehicle and ran into a car driven at an excessive rate of speed by the defendant. Although the court was satisfied that the child had been taught to cross the street properly, it ruled nonetheless that children of the plaintiff’s age can be forgetful and decided against the defence of contributory negligence.26 This case can be distinguished from the facts of the case for discussion in that Ben is considerably older and might not be expected to forget how to cross the street properly. In Toropdar v D, a ten year old was held to be only 10% liable for the damages caused in an accident in which the defendant had not been driving at an excessive speed in an area where he should have contemplated that children would be playing in or near the street.27 This case restates the position put forth in McHale v Watson in which it was ruled that: ....the standard by which (a child’s) conduct is to be measured is not that to be expected of a reasonable adult but that reasonably to be expected of a child of the same age, intelligence and experience.28 Ian can therefore expect that given Ben’s age and the degree of intelligence and experience associated with a 12 year old, the court is likely to apportion a share of the blame to Ben. However, it will likely not be more than 15-20% of the damages awarded to Ian. In this regard, whatever share of the blame is apportioned to Ben will be deducted from the damages awarded him against Ian. Peggy In order to successfully pursue a claim for psychiatry injury as a secondary victim, Peggy will have to establish some degree of proximity to both the victim (Ben) and the incident.29 In the leading case of Alcock v Chief Constable of South Yorkshire Police it was established that the plaintiff who is a secondary victim must first prove that they witnessed the incident giving rise to a claim with their own senses either as an eye witness or having heard the incident personally, or having witnessed it immediately afterward.30 In other words, the claimant, as a secondary victim must be physically in the vicinity of the incident. Moreover, the shocking affect must be sudden as opposed to a gradual affect. If the shock has been a result of witnessing an event, the claimant as a secondary victim must have a sufficiently close relationship with the primary victim. Close proximity in this regard will be assumed automatically in the case of parents and their children and spouses or partners.31Although Peggy is not a parent, she does act as a parent for Ben who is her grandchild and it is unlikely that the court will rule that Peggy does not have sufficient proximity to Ben to allow a clam as a secondary victim. In order for Peggy’s claim to succeed the court will have to be satisfied that the psychiatry injury was a reasonably foreseeable outcome for an individual with normal tolerance in Peggy’s position. Where the secondary victim is particularly close to the primary victim, the likelihood of a psychiatric injury is usually taken for granted.32 It would appear from the facts of the case for discussion that Peggy and Ben are particularly close since she is his primary caregiver while Ben’s father is in prison. Apparently, Ben’s father spends long periods of time in prison. Peggy’s claim will not succeed unless she can prove that the shock complained of is a recognizable psychiatric injury. There must be proof of damages and any psychiatric injury that is recognized, will be sufficient proof of damages. If the injury is “borderline” it will be far more difficult for a claim in psychiatric injury to succeed.33Peggy’s claim is for post-traumatic stress disorder, a well-documented and well-known psychiatric disorder. Given the fact that Peggy witnessed the accident first hand, and that she has a particularly close relationship with Ben, she will have the requisite proximity for a successful claim as a secondary victim. Conclusion Based on the authorities discussed it can be concluded that Ian will likely be successful in claims for pure economic loss in negligent and/or fraudulent misstatement against both WTC. WTC were negligent in giving Ian particularly negligent advice and for withholding information about the risky and volatile investment they advised Ian to participate in. Ian’s claim against Marcus is likely to succeed on the grounds that Marcus’ was in breach of a voluntary assumption of responsibility or duty. Marcus failure to act on his client’s advice within a reasonable time resulted in Ian losing out on an inheritance. Thus Marcus is liable for the pure economic loss. Ian will also likely be liable for the injuries sustained by Ben since he did drive above the speed limit and by his own admission was distracted by his recent financial problems. Ben will likely be partially to blame although in a minimal amount under the law of contributory negligence. Peggy will also likely be successful in a claim for psychiatric injury as a secondary victim given her close proximity to Ben and the accident and the nature of her psychiatric injury. Bibliography Textbooks Bussani, Mauro and Palmer, Vernon, Valentine. ‘The Notion of Pure Economic Loss and its Settings,’ In Mauro Busani and Vernon Valentine Palmer (Eds.), Pure Economic Loss in Europe. (Cambridge, UK: Cambridge University Press, 2003). Courtney, Padraic and Casey, Nuala. Wills, Probate and Estates. (Oxford, UK: Oxford University Press, 2012). Harpwood, V. Modern Tort Law. (7th Edition, Oxon, UK: Cavendish Publishing Limited, 2009. Horsey, Kirsty and Rackley, Erika. Tort Law. (Oxford, UK: Oxford University Press, 2009). Cases Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310. Bourhill v Young [1943] AC 92. Caparo Industris v Dickman [1990] AC 465. Carr-Glynn v Frearsons [1998]4 All ER 225. Donoghue v Stevenson [1932] AC 562. Gough v Thorne [1966] 3 All ER 398. Grieves v F.T. Everard & Sons [2007] UKHL 39. Hedley Byrne v Heller [1964] AC 463. Henderson v Merrett Syndicates Ltd [1995] 2 A.C. 145. Jones v Lawrence [1969] 3 All ER 267. Kirkham v CC Greater Manchester Police [1990] 2 QB 283. McHale v Watson [1996] 115 CLR 199. Morris v Murray [1991] 2 QB 6. Mutual Life and Citizens Assurance Co. v Evatt [1971] AC 793. Page v Smith [1996] 1 AC 155. Ross v Caunters [1980] Ch 297. Standard Chartered Bank v Pakistan National Shipping Co. [2003] 1 All ER 273. Toropdar v D [2009] EWHC 2997. White v Jones [1995] 2 AC 207. Journal Articles Jaffey, A.J. E. ‘Volenti Non Fit Injuria.’ (March 1985) 44(1) The Cambridge Law Journal, 87-110. MacGrath, M. ‘The Recovery of Pure Economic Loss in Negligence – An Emerging Dichotomy.’ (1985) 3 Oxford Journal of Legal Studies, 350-377. Norris, W. ‘The Duty of Care to Prevent Personal Injury.’ (2009) JPI Law, 114. Statutes Law Reform (Contributory Negligence) Act 1945. Read More