Negligent Misstatement

The tort of negligent misstatement is defined as an “inaccurate statement made honestly but carelessly usually in the form of advice given by a party with special skill or knowledge to a party that does not possess this skill or knowledge” (Willesee Bill, Law management 252, Curtin Handbook 2010). In order to prove that negligent misstatement occurred, we have to prove the existence of a duty of care between the defendant and the plaintiff,a breach of that duty by the defendant and injury of loss suffered by the plaintiff as a direct result of the defendant’s breach.

The British Court did not recognise the existence of a general duty of care imposing liability for careless behaviour across a range of situations and relationships until the …show more content…
Legislation introduced control over situations where a duty of care is owed: economic considerations, insurance, loss allocation, floodgates. Accordingly, their Lordships laid down two requirements which a claimant will need to satisfy to establish a duty of care in respect of a statement : the existence of a special relationship between the claimant and the defendant, involving an “assumption of responsibility” by the defendant and “reasonable reliance” by the claimant. Taken together, there factors may be referred as the “ Hedley Byrne principle” also used in the Junior Books v …. CASE …show more content…
In order for a duty of care to exist in this case the defendant must know the type of the transaction that the claimant intended, the defendant have communicated the statement to the claimant or must have known that it would be communicated to the claimant, must have anticipated that the claimant will reasonably rely on the information and the claimant must be relying on the information for a reasonable purpose.
Over the years,case law has established that there are a number of factual situations in which a duty of care is known to be owned. However, there are still situations in which it is not clear whether there is a duty of care and following the moves towards a tighter test after Anns was overruled, the House of Lords set down a new test in Caparo Industries plc v Dickman (1990). More recent cases have narrowed the duty of care back to “knowledge”. Presented as the Caparo test, the existence of a duty of care could be proved if three stage test was satisfied: the damage had to be foreseeable, the had to be proximity between defendant and claimant and the imposition of a duty must be fair, just and

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