LAW OF TORTS: Negligence, Liability for Negligent Statements

Overview of Negligent Statements causing Pure Economic Loss

Elements of Negligent Misstatement

Negligent statements - words given carelessly to cause loss

Advice

Supply of information

  1. Does D owe a duty of care to P?
  1. If so, has D breached that duty of care?
  1. If so, has P suffered damage?
  1. Are there any defences?

Special Relationship

Hedley Byrne v Heller (1964)

Duty of care can exist provided there is a 'special relationship'

Criteria

Person gives info or advice on a serious or business matter

Should realise or realises they are being relied on to five correct advice and

Reasonable for person to rely on advice in the circumstances

Shaddock v Parramatta City Council

MLC v Evatt

Reasonable to reply on experts

Not reasonable to rely on disclaimers

If they are being paid, assumes responsibility

Third party

Must show it is reasonable to rely and act on advice without seeking further advice or making their own enquiries

Esanda Finance v PMH

Step 1: Foreseeable risk - s 48(1) Wrongs Act

Step 2: Reasonable person's response - s 48(2) Wrongs Act

SAME AS WEEK 8

How would a reasonable person respond to the risk?

If defendant is professional or has a special skill or training

Standard of care is informed by peer professional opinion defence - did they do what other competent professionals in their field would do?

Argo v Al Kammessy

SAME AS WEEK 8

But for the wrong advice or information, would the plaintiff not have taken the action that incurred the loss

Wagonmound case

Loss to remote

WEEK 8

Contributory negligence

Voluntary Assumption of risk

Peer Professional Opinion

complete defence

Defendant is liable unless they have acted in accordance with peer professional opinion

Wrongs Act ss 59-60

does not incur liability if acting in a manner widely accepted by peer professional opinion

court can over rule if opinion is irrational

Does not need to be unanimous, just widely accepted

Evidence:

Independent expert reports and testimonies

standards of direction from a professional association

common practises or customers in the particular profession or industry