Issues on Law of Negligence - Essay Example

?Negligence Tort of negligence occur where the following elements exist and can be proven duty of care and the breach of thereof, causation, and the damage itself (Mann et al, 2009). These elements have to be proven for a negligence case to be successful; however, the most essential element is duty of care. There are two types of duty of care, duties that are recognized by law and duty imposed by circumstances (Miller & Jentz, 2003). In addition, there is the issue of whether a certain risk was foreseeable; in which case, if it was not foreseeable the person responsible for the damage cannot be liable. Helen’s claim for her injuries and lost earnings against Metro plc. The issues in this case is whether Metro Plc owes Helen a duty of care for failing to secure the wood that passersby were supposed to use to cross over the holes they had dug. Furthermore, the other issue found in this case is to ascertain whether it was Metro Plc negligence, which led her to lose her earnings. The law applicable in this case is law of negligence; negligence is defined as the lack of use of reasonable care resulting into causing harm to the other person or property. Negligence occurs either when an individual does something that a reasonable person would not do or failing to do something that a reasonable man would. There are various precedents have been set over the years concerning the law of negligence. One of those precedents is good neighborship that was set in the case of Donoghue vs. Stevenson and another recent precedent, which is relevant to this case, is Caparo vs. Dickman (1990). Metro Plc is liable for Helens’ injury since they could not have foreseen the accident. This is because they had already taken action into ensuring that the passersby would not suffer injury; however, their action did not prevent Helen from suffering personal injury. In Caparo vs. Dickman (1990), it was held that the principle of neighbourhood involved more than just a person who was in a contract with the defendant. In addition, there are three principles used to determine whether there is duty of care. The first principle is foreseeability of claimant being harmed, it is clear that the defendants had foreseen possible harm and had not taken enough action to ensure that passersby like Helen would not be at risk of harm. The other principle is the proximity between the defendant and the claimant. In this case, there is an aspect of neighbourhood between Helen and Metro plc since the defendants knew claimant and other passersby used the place. In Donoghue vs. Donoghue (1932), judge Atkin stated that a neighbour is not a person with whom one has physical closeness but one that is likely to be affected by the other person’s actions. The third principle of Caparo case states that a person can only be held to owe a duty of care if doing so is reasonable, fair and just. In the case of Helen vs. Metro plc, it was reasonable fair and just that the defendant ensured that the claimant and other passersby were not at risk. On the other claim of losing her earnings, Helen cannot blame Metro Plc this is because she spent more time in hospital because she was not served on arrival. Metro Plc could not have foreseen that she could have lost her earnings as a result, of their actions; therefore, they do not owe them a duty of care. In Spartan steel and Alloys Ltd V Martin & Co. Ltd (1873) it was held that economic loss can only be recoverable only if it results from physical damage that was caused by the defendant’s negligence (Harpwood, 2000). Helen’s claim against Hubble & Co. In this case, Helen is the claimant from Hubble & Co for negligence this is because she relied on the report that Hubble & Co prepared to buy more shares, and this led her into losing money since Bubble &Co’s report was wrong. The issues that arise from this case include whether Bubble &Co are liable since they were merely employees of Metro Plc the company that Helen owned shares. The law applicable in this case is pure economic loss negligence (Matthews, 2012). This law was applied in the case of Hedley Byrne & Co. Ltd v Heller & Partners Ltd (1964), where Hedley was an advertising agency that used to work for Easipower, and was responsible for any adverts Easipower required. They later wanted to know the financial status of Easipower, in order to help Hedley to assess whether to pay for their advert on credit. The bank of Easipower assured them that Easipower was doing well financially and that they had enough resources to carry out normal business proceedings. However, they stated that their report was without responsibility, Hedly on the other hand relied on this information and even into more contracts on behalf of Easipower. Later Easipower was unable to pay due to lack of sufficient resources. This would mean that Hedly losing a lot of money, thus, they sued the bank for damages due to their negligence. The effect of this case makes it possible for a person to recover from relaying on a report made by an expert, who was negligent; however, a special relationship has to exist between the defendant and the claimant. The definition of special relationship is that the claimant must prove that she relied on the defendant’s judgment because of the skills he has (Kennedy, 2009). In addition, there must be reasonable knowledge on the defendant’s side that the claimant would rely on the information. Moreover, it must be reasonable for the claimant to rely on the information given by defendant (Miller, 2012). The defendant has to have been assumed responsible for any information that is delivered by him. The claimant in the case of Helen vs. Hubble & Co can recover from the defendant the economic loss caused by their negligence. This is because it is clear that she relied solely on the statement that was prepared by the defendant to buy more shares. In addition, the fact that the statement was sent to the claimant and all other shareholders means that they were expected to rely on the information prepared by the defendants (Statsky, 1982). It is also reasonable to expect the claimant to rely on the statement since as an investor she would be interested on knowing how the company was doing; it would also encourage her to make other investments. The defendant being the auditing firm for a company that had shareholders was responsible for any information they delivered. It is clear that Hubble & Co. owed Helen a duty of care and they failed to do so by negligently preparing misleading statement. As in the case of Caparo vs. Dickman (1990) where it was held that the fact that the defendants sent the valuation document to the plaintiff to induce them to lay out their trust money on mortgage meant that they owed them a duty of care. Therefore, it was important that they used reasonable care while preparing the documents. Hubble & Co. owes a duty of care to all the parties that relied on their statement and whose reliance they could have foreseen; therefore, Helen being a shareholder is one of these parties they owed her a duty of care. Arthur’s claim against Hubble & Co Arthur in this case made a decision based on the statement that was sent to Helen, however, he did not have any link to Metro Plc as well as Hubble & Co. The issues arising from this case is whether Hubble & Co owes other parties that are not directly linked to them and Metro Plc., but who may have invested because of their negligence. There is the issue of “neighbour” as defined in Donoghue V Donoghue (1932) and who can be defined as a neighbour. The other issue presented is the issue of duty of care as elaborated in the case Caparo V Dickman (1990). The law applicable in this situation is duty of care, and its extent. In Caparo V Dickman (1990), it was stated that professional people owe a duty of care to their clients and employers. In addition, they owe a duty of care to any person that they show the report to as well as any person that their employers shows the report to, and whom they knew that that their employer would show them. However, they do not owe any duty to any stranger that sees the report and takes a certain action. Moreover, proximity extends up to those parties that have a direct link to the defendants, thus, any other person who makes a decision based on the report cannot claim for damages (Okrent & Buckley, 2010). There is also an aspect of good neighbour as per the case of Donoghue V Donoghue (1932). Prior to this case, the parties were only liable for negligence if there was prove of a contractual relationship between them. During this case, this changed and parties were held liable for the duty they owed to the parties that were affected by their actions. This too changed as the question of who can be defined as a neighbour was raised. In Caparo V Dickman (1990), the judges were able to come up with rules to be followed when determining whether a person could be considered a “neighbour”. According to this case, it is important to determine the limitation on proximity of a party that can be considered as a neighbour. The defendant, in this case, could not have reasonably foreseen harming the claimant through their negligent actions. Moreover, there is no relationship between the claimant and the defendant and therefore there is no way the defendant could have considered the claimant a “neighbour”. Furthermore, it would not be just and reasonable to hold the defendant liable for all the parties that may be exposed to their report and end up buying Metro Plc shares. In this case, the defendant did not know that the claimant intended to rely solely on their report to make the investment. Defendant did not have any link with the claimant; therefore, they could not have known that the statement would be communicated to the claimant. In addition, there is reason to assume that the defendant could have anticipated that the shareholders would share the information that was contained in the statement (Caparo vs. Dickman 1990). On the other hand, the claimant did rely on the statement that the defendants prepared and as a result, he suffered financial loss. In respect to Barnett v Chelsea hospital board (1969), Arthur can be compensated for the los he suffered because of Hubble & Co. This is because were it not for their negligence he would not have bought the shares and therefore would not have suffered the loss. This is only concerning causation, since as per causation in law the defendants are not liable. In conclusion, since Arthur is an existing shareholder of Metro Plc he is entitled to compensation. Bibliography Barnett v Chelsea hospital board (1969) Caparo vs. Dickman (1990) 2 AC 605 Donoghue V Donoghue (1932) HARPWOOD, V. 2000. Principles of tort law. London, Cavendish. 25 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964]AC 465 KENNEDY, R. 2009. Duty of care in the human services: mishaps, misdeeds and the law. Cambridge, UK, Cambridge University Press. 104 MANN, R. A., ROBERTS, B. S., & SMITH, L. Y. (2009). Smith & Roberson's business law. Mason, OH, South-Western Cengage Learning. 146 MATTHEWS, J. L. 2012. How to win your personal injury claim. Berkeley, CA, Nolo. 13 MILLER, R. L. 2012. Modern principles of business law: contracts, the UCC, and business organizations. Mason, OH, South-Western Cengage Learning. 93 MILLER, R. L., & JENTZ, G. A. 2003. Business law today: the essentials : text & summarized cases--e-commerce, legal, ethical, and international environment. Australia, Thomson/South-Western West. OKRENT, C. J., & BUCKLEY, W. R. 2010. Torts and personal injury law. Clifton Park, NY, Delmar Cengage Learning. 22 Spartan steel and Alloys Ltd V Martin & Co. Ltd (1873) STATSKY, W. P. 1982. Torts, personal injury litigation. St. Paul, Minn, West Pub. Co. 120 Read More