[madhead123]

Hello all ,

I was just wondering if i was on the right lines of understand PEL. I've split it up into three kinda catagories:

1) Generally, PEL is not recoverable, but consequential loss is (Spartan Steel case, Foot and Mouth case etc)

2) Defective product loss - in present times, the law has retreated from the expansionist era seen in Anns v Merton, to a more restrictive approach (Murphy)

3) Exceptions - Negligent misstatements - One maybe able to recover for PEL for a negligent missatement (Hedly Byrne v Heller). In recent cases (Spring v Guardian assurances) the Hedley principle has been extended to involve negligent services.

Have I dealt with all the issues regarding PEL...is there anything i'm missing out (key issues etc). PEL is my weakest topic, so havn't revised it as well as all the others!

P.S. does anyone know how Caparo influenced issues to do with negligent misstatements?

THANKS

[Rob 106]

Yeah im not too great at this either but I think you've got most of it. I think it is Junior Books that shows you can claim for PEL if you have very close proximity, and proximity is part of hte Caparo tests so... Nah I don't know really.

[madhead123]

Thanks

Anyone else? I'm a bit stuck!

[farmerdragonball]

The relationship between Caparo and Hedley was explained in the recent Barclays Bank case. How I would explain it is that in the traditional negligent misstatement use Hedley. Where the situation is an extended Hedley situation then use Caparo. The first two limbs of Caparo are similar to finding Hedley special relationship but you are arguing that there are policy reasons for finding a duty effectively. You have to use this because in these extende situations there is not a strong special relationship between theparties.

I think this can be seen in Spring v Guardian where the relationship between the claiment and defendant was indirect so it was pretty unlikely to be able to find a Hedley special relationship. But the court justified finding a duty on policy; the claiment would not be able to find employment! It was fair, just and reasonable in other words!

Anyway that's what I think. I'm sure someone cleverer than me can explain it better. I recomend you read Markesinis and Deakin's textbook, it explains economic loss alot clearer than everyone else.

p.s. I think you have got economic loss pretty right. I reccomend you look at D&F Estates where the court suggested a 'complex structure theory' and see how it was interpreted/modified in Murphy!

[madhead123]

Thanks, that was a very helpful post!

Sorry, to keep bugging you but i am right in thinking that Caparo established this: (in respects to negligent misstatements anyway)

Generally, the decision in Caparo v Dickman makes four factors relevant to the question whether a duty of care is owed, namely:

1.Was the representor full aware of the nature of the transaction

2.Did the representor know that the information would be communicated to the claimant, either directly or indirectly?

3.Did representor know that it was very likely that the claimant would rely on the information when deciding whether or not to engage in the transaction?

4.Was the purposes for which the claimant relied on the information one that is connected with the interests which is it proper to expect the representor to protect?

So basically, if a Q has a scenario like X negligently advices Y then apply Hedley. Or, on the other hand, if X advices Y who passes it onto Z when knows that Z would rely on the info then Caparo?

Thanks!

[farmerdragonball]

Originally Posted by madhead123

Thanks, that was a very helpful post!

Sorry, to keep bugging you but i am right in thinking that Caparo established this: (in respects to negligent misstatements anyway)

Generally, the decision in Caparo v Dickman makes four factors relevant to the question whether a duty of care is owed, namely:

1.Was the representor full aware of the nature of the transaction

2.Did the representor know that the information would be communicated to the claimant, either directly or indirectly?

3.Did representor know that it was very likely that the claimant would rely on the information when deciding whether or not to engage in the transaction?

4.Was the purposes for which the claimant relied on the information one that is connected with the interests which is it proper to expect the representor to protect?

According to Markesinis and Deakin, the essence of finding a Hedley relationship is that there is a ‘special relationship’ between the parties. All the other stuff (those points you have listed) is just guidance, it is not the binding law!

With regards to these guiding principles I would look at Neil LJ’s judgement in James McNaughton v Kicks Anderson [1991], where he gives a big long list of things to take into account many of which you have listed here and there are other factors from the case law (Mutual Life v Evatt) such as you should posess a special skill etc.

Originally Posted by madhead123

So basically, if a Q has a scenario like X negligently advices Y then apply Hedley. Or, on the other hand, if X advices Y who passes it onto Z when knows that Z would rely on the info then Caparo?

Thanks!

Edit:

No, because this type of indirect advice can be seen from Hedley itself. The type of situations I am talking about, from what I gather from Customs and Excise Commissioners v Barclays Bank Plc [2006], is where it is not a misstatement but a will/reference/pension/service etc etc. Here you should try and use Hedley first but if you cannot because the principles do not seem to fit then try and use Caparo, particularly arguing there are policy reasons for finding a duty.

[madhead123]

So if one had such a question you would go through the requirements of Hedley and then, if it doesn't fit, apply Caparo (points i listed) and say that on policy considerations X would owe a duty of care to Z. This was confirmed in Barclays Bank case.

Im just a bit confused which order to apply the tests?

Basically, where X directlly gives to negligent statement to Y - apply Hedley

Where X indirectly advises Z then apply the caparo (or both, hedley first then caparo)?

Thanks a bunch!