The Development of the Neighbour Principle - Donaghue - Essay Example

The development of the neighbour Principle Introduction: The case of Donaghue v Stevenson1 first established the relationship that exists based uponthe principle that other people are our neighbors and therefore we owe them a duty of care. When such a duty was breached, there would be scope for damage. This principle was built upon further in the case of Anns v Merton Borough London Council2, where a two fold test was set out to examine whether there was a sufficient element of the neighbor principle that would result in an economic damage caused to another through a dereliction in that duty of care. The case of Murphy v Brentwood DC3 overruled this two fold test laid out in Anns and the liability of a violater of a duty of care was assumed to go beyond merely monetary considerations. This is what finally led to the development of the duty of care owed by every person towards another as laid out in the case of Caparo v Dickman4, which is the foundation of most tort cases today, with some contractual breaches also falling under the tortious breach of duty of care. Analysis: The case of Donaghue v Stevenson5 was one of the first cases to establish the fact that remedies could exist in tort on the basis that all owe “a duty of care” to “their neighbor” and Lord Tomlin stated that “…acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief.” On the basis of a moral principle that every person owes a duty to other people because they are neighbours, Lord Atkin refined this further by clarifying a duty of care that one owes to a neighbor as follows: “The rule that you are to love your neighbour becomes in law, you must not injure your neighbour….you must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour.”6 The case of Donaghue laid out the general principle that since every person owed others a duty of care based upon the fact that they were neighbors, therefore any breach of that duty could prove to be adequate grounds for seeking damages. However, the criteria and qualifications of this duty of care were explored in the economic context in the case of Anns v Merton Borough London Council7 wherein it was held that economic losses caused by a breach of contract that occurred through negligence would be valid and actionable under tort law. A two way test was set out in this case as follows: (a) was there a sufficient neighbour relationship or a level of proximity between the two parties, in order that it could reasonably be concluded that the defendant should have been aware that his carelessness could affect the plaintiff adversely? (b) Was there any policy consideration as a result of which duty of care could not be assumed? This case was important because it expanded the neighbour principle to cover economic losses that accrues from breach of contract as being equivalent to a violation of the duty of care owed to a neighbour. However, this two fold test that was laid out in Anns and the principles of this case in general were found to be shaky and the case of Murphy v Brentwood DC8 overruled it. The reasons for this overruling may be found in earlier cases – for example, as had been stated by Lord Goff in addressing the issue of negligence in the case of White v Jones, “No problem arises by reason of the loss being of a purely economic character.”9 The case of Hedley Byrne v Heller10 had further expanded the law of negligence to include misrepresentation in contracts. In this case, the House of Lords considered the matter of duty of care that is owed by a professional provider of services, upon whom a duty of care will be imputed because it is likely that the professional’s advice will be relied upon by the person in question. There is an issue here of trust that a lay person would repose upon a professional provider of services, since they will be assumed to possess the specialized knowledge that will make their advice valuable. The acceptance of responsibility by a professional provider of services was thus clearly laid out in the case of Hedley Byrne as follows: A reasonable man, knowing that he was being trusted or that his skill and judgment were being relied upon, would I think, have three courses open to him. He could keep silent or decline to give the information or advice sought, or he could give an answer with a clear qualification that he accepted no responsibility for it….or he could simply answer without any such qualification. If he chooses to adopt the last course, he must, I think, be held to have accepted some responsibility….”11 The case of Hedley Byrne is a land mark case from the point of view of pure economic losses. Prior to this case, it was not possible for parties to recover damages on the basis of pure economic losses and such claims were barred. The Courts in general tended to follow the rule that a party does not owe another party a duty of care to not cause losses. While damages could be sought for misrepresentation or fraud12, the Courts had created a blanket rule that a party never owed another party a duty of care not to cause loss, as a result of which all claims pertaining to this kind of claim were doomed to fail. The Court refused to even entertain the merits of such cases, therefore Plaintiffs were effectively barred from any remedies. But Lord Pearce in the Hedley case further stated as follows: “There is also in my opinion a duty of care created by special relationships which, though not fiduciary, give rise to an assumption that care as well as honesty is demanded.”13 In the case of Caparo v Dickman, Lord Bridge commented; “It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of that duty by reference to the kind of damage…”14. In this case, it was held that in order to determine whether a duty of care exists in a specific case, “one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighborhood such that in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter- in which case, a prima facie duty of care exists.” Moreover, the case of Caparo had laid out the qualification that the scope of duty is to be assessed in reference to the kind of damage that has been done. The Caparo case has thus established three aspects to be considered in order to determine whether there has been a breach of duty of care: (a) the proximity or neighbour principle from Donaghue, in that the Court must assess whether the degree of proximity between plaintiff and defendant was sufficient to establish a breach? (b) the degree of foresight, in that the Court must assess whether the defendant could have reasonably foreseen that his negligence could have produced harmful effects? (c) Whether the actions of the defendant were just, fair or reasonable under the circumstances in order to avoid a breach of duty of care, or whether that duty of care had been breached through negligence so that a prima facie case was established? In the case of Sutherland Council v Heyman, Brennan J commented; “The question is always whether the defendant was under a duty to avoid or prevent that damage, but the actual nature of the damage suffered is relevant to the existence and the extent of any duty to prevent it.”15 In this way, the neighbor principle established in the case of Donaghue was extended to economic losses through the case of Anns, while a duty of care was imputed upon a professional provider of services in Hedley, which became the basis for the current extension of breach of duty of care to all kinds of negligence including contractual misrepresentation, thereby allowing tortious recoveries under contract as well. Bibliography * Anns v Merton London (1978) AC 728 * Caparo Industries plc v Dickman and others [1990] 2 AC 605 at 627. * Donaghue v Stevenson (1932) AC 562 * Derek v Peek (1889) 14 App Cas 337 (HL) * Hedley Byrne v Heller (1963) 2 All ER 575 * Murphy v Brentwood DC (1991) 1 AC 398 HL * Sutherland Shire Council v Heyman (1985) 60 ALR 1 at 48 * White and Another v Jones and Another (1995) 1 All ER 691 Read More