ECONOMIC LOSS - Negligence Misstatement
INTRODUCTION
C may be able to claim for his economic loss under negligence
misstatement.
In order for this claim to succeed, there must be 6 parts that have to be
satisfied. Which include: A special relationship between the parties, a
special skill possessed by the person giving advice and reasonable
reliance on that advice. Caparo v Dickman adds: D must know C will rely
on it and the purpose for which the advice is given is relevant
First, there must be a special relationship between the parties.
This will usually involve one party acting as an expert adviser as in Cornish
v Midland Bank.
A social relationship is unlikely to suffice.
C and D do / don’t have a special relationship as ______ (apply and
evaluate)
This is supported in the case of Chaudry v Prabhakar, where the C’s
friend gave advice to buy a car but was totally unroadworthy.
The claimant was able to successfully sue under negligent misstatement
as although C and D were social friends, D had knowledge about his
speciality and provided a relationship between the parties.
Next, there must be a special skill possessed by the person giving advice
Liability will only usually arise if the advice given is in the area of expertise
of the person giving it as in Mutual Life and Citizens assurance Co v Evatt.
_______ did / didn’t have expertise as _______ (apply - you can propose
this hypothetically)
Thirdly, there must be a reasonable reliance on that advice.
This can be thought of as a control measure as in Law Society v KPMG
Peat.
The expert’s advice must be one that the claimant would rely on as in
Smith v Bush.
There was / wasn’t reasonable reliance on the advice given by D
INTRODUCTION
C may be able to claim for his economic loss under negligence
misstatement.
In order for this claim to succeed, there must be 6 parts that have to be
satisfied. Which include: A special relationship between the parties, a
special skill possessed by the person giving advice and reasonable
reliance on that advice. Caparo v Dickman adds: D must know C will rely
on it and the purpose for which the advice is given is relevant
First, there must be a special relationship between the parties.
This will usually involve one party acting as an expert adviser as in Cornish
v Midland Bank.
A social relationship is unlikely to suffice.
C and D do / don’t have a special relationship as ______ (apply and
evaluate)
This is supported in the case of Chaudry v Prabhakar, where the C’s
friend gave advice to buy a car but was totally unroadworthy.
The claimant was able to successfully sue under negligent misstatement
as although C and D were social friends, D had knowledge about his
speciality and provided a relationship between the parties.
Next, there must be a special skill possessed by the person giving advice
Liability will only usually arise if the advice given is in the area of expertise
of the person giving it as in Mutual Life and Citizens assurance Co v Evatt.
_______ did / didn’t have expertise as _______ (apply - you can propose
this hypothetically)
Thirdly, there must be a reasonable reliance on that advice.
This can be thought of as a control measure as in Law Society v KPMG
Peat.
The expert’s advice must be one that the claimant would rely on as in
Smith v Bush.
There was / wasn’t reasonable reliance on the advice given by D
