Chapter 5 Guidance on answering the questions in the book

Question 1

Anna and Peter have agreed to take part in a charity parachute jump at Melrose Field. Stephen, the organizer, neglects to allow adequate time between each jump and as a result the parachutes of Anna and Peter become tangled. Anna lands without injury but Peter hits a power line. Amongst those watching the jump is Sara, Peter’s sister. Lisa, Anna’s partner, is late to arrive at the event, due to bad traffic and but on the way she sees ambulances and fire appliances speeding towards the Field and fears the worst for Anna’s safety. Mohammed, a paramedic, climbs an electricity pylon in a rescue attempt but when he reaches him, discovers that Peter is dead.

Sara believes she is suffering from depression. Lisa is experiencing sleeplessness and is now reluctant to fly in planes. Mohammed has been diagnosed with post-traumatic stress disorder.

Advise Sara, Lisa, and Mohammed.

Outline:

• The type of damage here is significant; because the claimants do not suffer physical injury, the issue of duty of care owed to them may be problematic.
• Has there been negligence in respect of each claimant?
• If so, is there a causal link with their damage?
• Was a duty of care in negligence owed to the claimant?
• In cases of psychological injury, is the claimant a primary or secondary victim? (Page v Smith) If primary, then a duty will be owed. If secondary, the test in Alcock v CC South Yorkshire must be applied.

We are told that Stephen neglected to allow adequate time before each jump. This is strongly indicative of breach of the ‘reasonable man’ test (Glasgow Corp v Muir). The phrase ‘as a result’ indicates that his failure caused the physical damage to Peter. The damage suffered by Sara, Lisa and Mohammed is not physical but may be psychological.

In order for each of them to bring a claim against Stephen (or the charity if he is an employee subject to vicarious liability) the claimant must establish that he or she has suffered injury of a medically recognised type – more than mere grief or anger (Bourhill v Young).

Sara is a secondary victim as she was not in physical danger herself. The Alcock test must be set out and applied to her. It would appear that it would be satisfied and thus there would be a duty of care owed to her. She must have a medical diagnosis of depression and it must have been caused by viewing the event.

Lisa would also be a secondary victim. She would satisfy the emotional component of the Alcock test, however she did not sufficiently observe the event with her own unaided senses. (Hambrook v Stokes) would be relevant although distinguished. Lisa may or may not have psychological injury of sufficient severity.

Mohammed, if he can establish the causal link, is likely to be successful. He has sustained a medically recognised condition and thus is a primary victim as he put himself in physical danger (Chadwick v BRB).

Questions 2

In relation to the law of negligence, it has been observed, ‘Now that courts are aware that … professional advice is surprisingly often careless, they [the courts] appreciate and are concerned that even small variations in the reach of liability can have significant economic impact’ (Stapleton).

How have the courts responded? Illustrate your answer with relevant case law.

For the general approach, refer to ‘Approaching an essay question’, above.

Outline

• The type of damage suffered by a claimant in a case of negligent professional advice (negligent misstatement) is likely to be pure economic loss. This should be described and noted to raise uncertainty over the issue of duty of care.
• Because duty of care is a limiting device in the law, courts may be concerned about the ‘reach of liability’.
• The test for duty of care in such cases is based on Hedley Bryne v Heller, augmented by the 3-part test in Caparo v Dickman and the concept of assumption of responsibility.

This essay may begin by setting out the reasons that pure economic loss is a problem area for duty of care in negligence. Prime among these reasons will be the ‘floodgates’ argument (Cardozo) and the overlap of liability with contract.

The origins of liability for duty of care for negligent misstatement originated in 1964 and with the test for the ‘special relationship’ in Hedley Bryne v Heller. The subsequent cases applying and interpreting Hedley Byrne should be cited and explained: Mutual Life Assurance v Evatt; JEB Fasteners v Marks Bloom; Chaudry v Prabhaker and Smith v Eric Bush.

Caparo v Dickman presented a situation of potential floodgates accompanied by severe effects on the professional insurance market. The House of Lords denied duty of care on the basis of lack of proximity, as well as for policy reasons. James McNaughton Paper Group v Hicks Anderson provided more detailed elements for the application of Caparo.

The concept of assumption of responsibility was derived from Hedley Byrne and employed to further define the reach of professional liability in cases such as Henderson v Merrett (liability for services), Williams v Natural Life Health Foods and Commissioners of Customs and Excise v Barclays Bank. Potential duty to third parties who act in reliance upon negligent misstatements was discussed in White v Jones and Spring v Guardian Assurance.