Caparo Industries versus Dickman - Essay Example

Insert Part Caparo Industries plc v Dickman [1990 All ER 568 Question This case was heard in the House of Lords. Question 2 The date the court delivered its judgment was on 8th February 1990. Question 3 The first six catchwords in the report are the plaintiffs, the defendant, the judge/ jury, duty of care, common law and liability. In this case, the plaintiff is Caparo Industries Plc. The defendant is Dickman and the duty of care in this case may be the need for Dickman to disclose accurate information on Fidelity Plc’s profit margin. The jury involved in the case consist of Lord Bridge of Harwich, Lord Ackner, Lord Jauncey of Tullichettle, Lord Roskill and Lord Oliver of Aylmerton. The common law is referred to since it describes the duty of care that an entity, corporate or human, owes to another. Other relevant legislations which have been made and may be applicable to this case may also be included in the catchword. The purpose of the catchwords is to help one summarise at a glance, the facts surrounding a court case. The same are also used in compiling case reports. Mostly, legal publishers are the ones who make the catchwords as parts of the head notes and summaries surrounding a case. Question 4 The key facts are summarised in case reports and are summarised include the head note, the citation of the case and the law reporter. Sometimes, the Latin or law French are mentioned. All these are listed in the line which specifies whether the case is first instance or is on appeal. If this is the case, catchwords may come after the names of the judges and the hearing and judgement dates, respectively. The legal publisher or any person working for legal publisher may write this report or catchword. The part of the report may either be referred to by its self-titled name, catchwords or catchphrases. Apart from the aforementioned facts surrounding the case, the legal publisher will have to specify whether the case is taking place for the first time, or is an appeal or cross appeal. Question 5 The key issue on which the court had to decide is the duty of care, and whether or not the defendant had fully met it. In this case, the use of negligent misstatements and negligent preparation of reports for a company serve as key issue. Apart from the general provisions of the common law, it will be important to consider the principle of Hedley Byrne v Heller in constructing a sound verdict. This information may be found in the legal website belonging to Library and Information Service. This website may be located by following the website’s URL, http://www.icaew.com/en/library Another source which has proven itself of immense importance in dispensing this knowledge is the work done by Hartshorne, Smith and Everton (2000, 502). Question 6 Initially, the courts made a ruling in favour of the auditors, saying that the auditors did not owe the plaintiffs any duty of care. The Court of Appeal ruled in favour of the plaintiff, saying that the auditors owed the plaintiffs duty of care as shareholders. Finally, the cross-appeal by the auditors made a ruling in favour of the auditors, observing that the condition for the case did not meet the specific conditions to qualify for liability for economic loss because of negligent misstatement. The court reasoned that, based on the Act of 1985, for there to be liability for economic loss due to negligent misstatement, the statement must have been issued to a known recipient and for a specific purpose. Again, the recipient must have relied on this statement and this reliance should have led to the recipient‘s detriment. Second set of questions: the judgment of Lord Bridge Question 7 According to Lord Bridge, in addition to the conditions falling within the ambit of tort of negligence, the criteria which indicate that a duty of care may arise in any given situation are: the foreseeability of the damage, proximity between the party owing duty of care and the party to whom duty of care is owed, and a situation that is reasonable and just enough for the court of law to impose a duty of a specific scope on the responsible party, for the party to which duty of care is owed. Question 8 It is most likely that Lord Bridge would use these criteria as a general “test” to establish a duty of care in every situation. The reason for this is twofold. One, he sees previous cases such as Anns v Merton London Borough having been inchoately arrived at since, by considering only the conditions falling within the ambit of tort of negligence, there was an inability to provide practical reasons to determine the applicability of duty of care. Secondly, citing case laws Smith v Eric S Bush and Harris v Wyre Forest DC [1989] 2 All ER 514, Lord Bridge was totally convinced that the application of his proposed criteria had set precedence. Question 9 Courts take a stricter approach to cases of negligence involving pure economic loss because of the knowledge that failure to meet all the aforementioned conditions imputes an impractically wide and unspecified duty of care upon businesses, and thereby leaving businesses unnecesarily vulnerable to legal suits. Question 10 The factual similarities in the cases of Smith v Eric S Bush and Harris v Wyre Forest DC are that in both cases, the plaintiffs purchased houses and relied on valuations made by external property surveyors. Again, in both cases, the plaintiffs paid the surveyors’ fee but it turns out that the inspections and evaluations were negligently carried out, thereby leading to the plaintiffs incurring losses. Question 11 On personal grounds, the House of Lords ruled in favour of the claimants in these cases because of the presence of foreseeability of the damage and a reasonable and just situation needed for the court of law to impose a duty of a specific scope on the responsible party, for the party to which duty of care is owed and proximity between the party owing duty of care and the party to whom duty of care is owed. Question 12 The factual differences between the Smith and Harris cases and that of Caparo Industries are that in Harris v Wyre Forest DC, the mortgagees are local authority who had been employed as a member of his company’s staff as the inspector and evaluator. This is not the case with Smith v Eric S Bush. Again, unlike Smith v Eric S Bush, in Harris v Wyre Forest DC, the plaintiff is not shown the evaluator report, so that the plaintiff assumes that the quoted mortgage loan is as worth as the amount of the loan. Question 13 When the claimant is not in a contractual relationship with the defendant, the court finds proximity between claimant and defendant in cases of pure economic loss by considering the control or limit mechanism and the defendant knowing that his statement would be conveyed to the plaintiff, and that the plaintiff would rely on the statement for decision making to enter a transaction or a transaction in kind. Part 2: Question 1 Since the appellant in this action is the claimant, her grounds for bringing a claim against the police are that the conduct of police investigations into the crimes which had been committed by the police failed to apprehend criminal S. and thereby failing to prevent the murder of her daughter. Question 2 The first ground for the appellant’s claim is that the conduct of police investigations into the crimes which the police carried out failed to apprehend criminal S. The second ground is that the failure to apprehend criminal S led to the murder of her daughter. Question 3 The reasoning of Lord Keith supporting the conclusion that there was insufficient proximity between Miss Hill and the police force is that there is no general duty of care owed by the police to identify or apprehend an unknown criminal. Secondly, the police owe no duty of care to individual members of the public who may suffer injury through the criminal’s activities except where police’s failure to apprehend the criminal had created an exceptional added risk. Question 4 The reasons given by Lord Keith which support his conclusion that the police should not owe a duty of care because of public policy are that there was no reasonable foreseeability of likely harm to Miss Hill, just because Sutcliffe had not been identified and apprehended. Secondly, Lord Keith states the absence of any additional characteristic that are indicative of police deficiency. The second reason is not convincing since it had been known that S had committed murder against numerous women in the same spot over many years. Effective policing must have been privy to this fact which was now public knowledge and acted accordingly. Section 2: Swinney v Chief Constable of Northumbria Police [1996] 3 All ER 449. Question 5 In Swinney and Another v Chief Constable of Northumbria Police Force, a couple volunteers information on the identity of a hit-and-run driver and leave their profile and contacts with a Northumbria Police department police officer. The couple’s contacts and profiles are stolen from a police car by the very villain and used to threaten the couple. Beside the compulsion to relocate from its public house, the couple is subjected to psychological distress and ultimately open a legal suit for breach of the duty of care, on the side of the police. The Court of Appeal rules in favour of the couple and instructs it to add breach of confidence to their legal suit. Question 6 The party the court ruled in its favour is the couple, the Swinneys. Question 7 This decision was reached because there was duty of care emanating from a special relationship which arose between the plaintiffs and the police through the assumption by the police of responsibility to protect the confidentiality of information supplied by the first plaintiff. Again, both parties knew that disclosure of this information was likely to expose the plaintiffs to a risk greater than the ordinary risk to the general public, yet the police failed to protect this information. The import of the foregoing is that the court considered that facts of this case to be materially different to the facts of Hill v Chief Constable of South Yorkshire Police. Question 8 The notion that the police have immunity from liability in negligence to members of the public is inchoate and its adoption is likely to entrench certain drawbacks such as negligence, incompetence and complacency in the criminal justice system. It is obvious that the police must guard witness identity as classified information, yet in the case of Swinney v Chief Constable of Northumbria Police [1996] 3 All ER 449, the Chief Constable of Northumbria Police Force fails to protect the secrecy and identity of the two plaintiffs. Among many other dire consequences, a sharp decline in witness volunteering and police-public relations is likely to ensue, immediately the police force is granted immunity from liability in negligence to members of the public. Works Cited Hartshorne, J., Smith, N. & Everton, R. 2000. “‘Caparo under Fire’: a Study into the Effects upon the Fire Service of Liability in Negligence.” Modern Law Review, 63 (4), 502. Print Read More