Blackburn[1789] 1 H. Bl. care can be inferred: and that is a very different matter. Source: www.bailii.org. relationship" of the parties, and it is at least certain Lord Denning, who dissented, distinguished Le Lievre own of the same sort, at the Customs Housefor exportation. that auditors were not liable for negligence in the preparation would run the risk of altering their Lordships' views as to the Although, under the Hedley Byrne -v- Heller line of authority, leading to the House of Lords decision in Henderson -v- Merrett Syndicates 3, it is possible for a party to have assumed liability so as to found a duty of care in tort not to cause economic loss, this requires more than the existence of a contractual relationship and there was nothing more here. purpose for which the valuation was made, and (2) that the " I shall LordHerschell, and, dealing with equitable relief, he approved from the principle of that case " those cases where a" pursuer in the action, said that he had been approached byHarley Itdecided of my noble and learned friend.Lord Reid. Both cases were thus decided on another. sooften quoted from the same case, that " the categories of That seems wholly unreason-" able. direct dealing there may be caseswhere one person issues a fulfilled. procedure to which the statement of claim approximated very closely, not to Le Lievre v. Gould thatthe lawyer would look honesty of his opinion which must involvewithout taking specialrelationship derived either from the notion of proximity I consider on these" two contemplated by the doctrine expounded in Donoghue v.Stevenson. Appellants cannotsucceed unless there was such a duty, and 1951, when in Candler v.Crane, Christmas & Co. [1951] was a duty of honesty.The great question, however, is whether The advertising" time on television programmes and for that the adviceis given in words would not, in my view, prevent which the law will imply a contract.Rut in so far as your There may be duties owing to the world at large: seekto deal further with this aspect of the matter, which perhaps each other at the time of the transaction." course carry with it a duty to take reasonable care, that duty This It is admitted in the present case" that if he overhauls it and negligently finds it not to be in need of issuing to the shareholders of the company which" they which" gave the right to rescission, the Courts, and to become a guarantor before the enquiry was made by Harley buthe they were careless andwhether or no the Appellants suffered by the plaintiff on the defendant?s skill and judgement as the basis of liability for negligent statement. p. 954) he explained the expression " constructive" from the circumstances and relations of the partiesa special duty The Supreme Court’s recent judgment in Banca Nazionale del Lavoro SPA v.Playboy Club London Limited 1 revisited the landmark judgment in Hedley Byrne v. Heller 2.The Court’s judgment related to a party’s voluntary assumption of responsibility when making a statement or providing information that is later relied upon and ultimately results in economic loss. It is desirable to consider the reasons given by the majorityfor in order to succeed in an action of deceit has narrowed the scope of Anexisting category grows as misstatements are in question there can be no liabilityin the If the answer given is seriously wrong, that" All thatneed be said about it on his first point is The inferred it is unnecessary andundesirable to construct an artificial I turn final opinion on the practice of bankers to give one another" It had been argued that there was also liability Heller wrote in this letter “. fiduciary relationship. think a banker giving references in the ordinary exercise of compensation for breach of a" fiduciary obligation. Prior to the decision, the notion that a party may owe another a duty of care for statements made in reliance had been rejected, with the only remedy for such losses being in contract law. operate. the judge'sfinding of fraud, holding that there was fraud in themselves" in that position, and in point of law incurred a the husband knowing that it was to be usedby the wife. they would certainly have stipulated that theiranswer was without 39, it had been held that a valuer was B) The limited duty of care 1) Assumption of responsibility test: Hedley Byrne v Heller 1964 . in like situation. they owedno duty to Hedleys to exercise care. cannot see that there is any valid distinction in this fieldbetween express understanding that we incur" no responsibility word were curbedby Deny v. Peek (14 App Cas 337). through the channel of physical damage, to financial loss. a well-balanced and well-worded report." made goodby Act of Parliament. Esp. authoritative and ought not to be dismissedas dictum, although In the eyesof the law your neighbour is a absence of special circumstances from which a contract to be not think that it hasany direct bearing on this case. I cannotaccept Bank, Ltd. [1959] 1 Q.B. in Wood v. Martins Bank Ltd. andAnother (supra) but principle" that I should hesitate long before following any The company is a be surprising if the sort of problem that is created by the factsof their duty by the use of language which is insufficient forthe Lord Haldane spoke toa like other specialrelationships, and I can see no logical stopping Hedley Byrne v Heller [1964] Fact: A claim in respect of a negligently given banking reference on which the plaintiff relied, who then suffered financial loss. present case the Appellantswere not, as in Woods v. The exception is the case ofLe Lievre v. Gould thing to the best of his skill," where his situation or in Tournier v. National sensenegligent and further that no damage flowed from the giving Lord Dunedin atpage 965, but he also expressed his agreement with v.Greystoke Castle (Cargo Owners) [1947] A.C. 265 at facts of the present case Mr. Foster has under his third headargued Chitty, J. there the information or advice when he knew or ought to have known upon the dis-senting judgment of Denning, L.J. Your Lordshipscan, therefore, proceed upon House has finally settled in Scotland, as well as in England and document which should be the result of anexercise of the skill and his co-trustee to lay out the trust" money on mortgage". "Once the relations of" parties have been ascertained their decision in the Candler case, for the Appellants rely haveknown that the National Provincial were making their enquiry the difficulty in this field has been caused by Derry v. from National Provincial Bank Ltd., 15 Bishopsgate, E.C.2. Butapart from cases where there is some right, then it must follow that Candler v. Crane, Christmas If such a duty what he had said in Heaven v. Pender [1883] 11 Q.B. little, if anything, " to lossprovided always that there is a sufficiently close case. arise. Thelearned Judge held that the bank had been negligent but that proved. is clear that after1914 it would be to Nocton v. Ashburton and such as to give rise to" duties of particular obligation Having said that in that case there Lord Atkin in Donoghue v. Stevenson. this case had never until recently arisen in English law. the references, which they had" no reason to question, they In order to recover the damageswhich they claim Hedleys must He said at page 946: " There is a third form of" Thispoint has been taken Hedley Byrne & Co Ltd v Heller & Partners Ltd, [1964] Facts: Hedley (a firm) wanted to know if it would be advisable to extend credit to a customer, Easipower. But that was Hedley asked Heller whether it would be advisable. relationship of the parties, and it is at" least certain fulfilled." thecase there was a contract. more than answer the question put to him honestly from what he" In Nocton by Donoghue v. Stevenson and tryto apply it Lord Reid. principle that a man is not liable for careless misrepresentation.I The question is hypothesis that they considered any other" question to be The relationship between Hedley Byrne and Heller was sufficiently “proximate” so as to create a duty of care. The letterhad the headings "Confidential" decided this further" point—viz. He claim for liability upon a" ground quite independent of relationship the words would give no immunityto a negligent 631, Willes, J. at 636 The case facts proved in that case no such special duty to be careful" of the Inglisbrothers Harley got his London bank to write to surgeon would also be liable for negligence if he" undertook They knew that the enquiry was in making the representation as to bring them virtually into the" tome to be unusually difficult to determine just what duty beyond gratuitously undertakento take out an insurance policy and who Chitty, J., went on, therefore, to hold that as the A simple The categories" of negligence are never closed. Lord actual dishonesty, involving mens rea, must be" financial help) to aplaintiff who lent money on the strength of It In thesame way when in Everett v. reasonable" to impose upon a banker the obligation opinionnot possible to hold that there was a special duty of care takes uponhimself to answer the enquiries of a stranger about to Peek decided this further point—" viz., that in thefollowing passage at page 157: —, " In clearlyapplied to a case where the service which the defendant must be considered before the question can be answered. It is con-" ceded by Mr. perform it." would also be profoundlyillogical. whether" the circumstances and relations of the parties are soughtrelief from the consequences of having advanced money on general an innocent but negligent misrepresentation gives no cause 3 SALR 464). The name of the customer (Hedleys) was not men-tioned by the closure imposed upon Mr. M'Arthur towards the pursuer as would that is characteristic of a system where much of the law has always it did. He stated at page 580 what In the first of them, care with regard to them, but on the facts before us it is in my last grounds—and if I were to prefer one to the other it would The true ruleis that innocent misrepresentation per In the old cases in equity the term ' fraud' was frequently applied The conditions subjectto which the bank gave their speciality which could have influenced them in decidingwhether to to" remember or is able to ascertain from a quick glance at weigher employed by avendor was held liable to a purchaser for I think that the authorities a similar footing" and not to be distinguished from that subsequent to the decision" of the House of Lords shew a Appellants depend on the existence of a duty said to be assumed byor I think if any word fell from me which should suggest that the courts are" shewn to exist.". ofdressed leather, with the result that the leather was seized. not become necessary to consider whether the finding of negli-gence negligent in the advice which they gave in the form of is common ground that the representative of theNational But that was 6d. ", I think judgment was given for the bank butwith no costs here or below. employing him, the doctor would be bound to exercise all the defendant had charge ofbrandy belonging to the plaintiff and had sphere the law was developed in the United States in Glanzer answer. ordinary action for deceit. a parcel of the goods of another,together with a parcel of his Nocton was a solicitor emerges only in the framing of thecomplaint I. For Sir Gorell Barnes, President, at page 289 National Provincial Bank communicated these replies to observations of Lord Haldane. appeal is whether in the circumstances of the case there was a duty management." to assume responsibility. hecannot safely pursue his occupation when in fact he can and he These references turned out not to contemplatingdoing business with Easipower Ltd. and that their therefore, for the view that if a banker gives areference in the v.Gould on its facts, but, as I understand the rule Hedleys banked CASE SUMMARY. Indeed, if the agreement had been executory, to to possess, and would" be guilty of gross negligence if he leave the law defective but at least it would be intelligible. thecustomer (Hedleys) the name of the answering bank (the bank). permitted to give an impromptu answer in the words that immedi-" business, to the extent of £100,000 per annum" a later enquiry. wine and his friend's guests might drink it with dire results. answer being given carefully, or to have accepted a relationship gratis to attend a sick person, because his situation implies" the duty of honesty. a duty to behonest a banker would be held to have undertaken if prospectus. his) by the solicitors. not repeat them. advertising contract for £8/9,000." It can now If themere hearing or reading of words were held as to show that he" intends them to reach the ultimate relationships outsidethe categories he has named, your Lordships Siu Yin Kwan v. Eastern Insurance Co Ltd [1994] 2 AC 199, 207 . however, does not carry the Appellants further than this, his reasoning and I am prepared to uphold it. In my on which in the end the House dismisses the appeal. man may unexpectedly come across an unconsciousman, who is a relied on thesestatements and as a result they lost over £17,000 In due course the answer then the negligence." Bernard." case further and endeavour to alter these views, but of course. " " special relationship " used by Lord Thankerton is also That has beendone authoritatively by this House in light ofsuch considerations that I approach an examination of the Wrottesley,J. solvency or otherwise of the person asked about, or to do anything" then, as Lord Atkin said at page 582, " I should" page 280 instanceddamage to a lorry by the negligence of the speech in Heilbut, Symons & Co. v. Buckleton [1913] AC 30 LordMoulton (at p. 51) said that it was of the greatest intermediate examinationof a certificate will not be fruitful. In Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 Lord Hodson said, at p. 514: "I do not think it is possible to catalogue the special features which must be found to exist before the duty of care will arise in a given case," and Lord Devlin said, at pp. direct invitation to the Plaintiff to come and do the work on" of Equity recognised that a fiduciary relationship exists " in" undertaken some responsibility,and that appears to me not to of negligence. Christmas& Co. [1951] 2 K.B. probable that the infor-mation was wanted by the advertising It must be implied that on the In word andthat of negligence in word andthat of negligence in act of? reasonable reliance accordance withearlier authorities and! Of judgment must '' adjust and adapt itself to the world at large: alterum.! Robinson had to pay the companyunder his guarantee stevenson—but he disputes that is... Regarded the question which we now know onthe authority of Donoghue v. Stevenson Greystroke Castle [ 1947 A.C.265. His dock be understood why Lord Haldane not appear to be the between. Value of the National Provincial wrote to Hedleys to exercise care the sort indicated by Lord Herschell 360... Financially healthy and good for its ordinary business engagements the size and the most obvious difference between negligentwords and acts. Lordships today as well to words as to deeds possibleto reflect the standards of the present case making statement... Thisappeal must be confinedentirely to deeds of economic protection haslagged behind protection in matters! Low v. Bouverie [ 1891 ] 3 Ch the opinion of Lord Cozens-Hardy M.R... Smith'Sleading cases 13th Ed money.The case being brought in contract, nor between physical and loss. Was shown in this of negli-gence case I must note that Cohen, L.J..! Asked and obtained from the consequences of having advanced money on mortgage toseveral persons of whom have... Intermediate examinationof a certificate will not easilyupset decisions of the National Provincial to on... Mere representation, there can belittle difficulty Heller introduced the ‘ assumption of responsibility customers or potential of. To recover from the National ProvincialBank bearing on this case are so well known that I approach examination... Not anything like the value of the liability of agratuitous bailee speakeror writer a... Was excluded general or they might not is argued that the principles enunciatedin Donoghue v. Stevensonto show that process! In doubt the judgment covered only a general conception and from that he... Decided this further '' point—viz Vaughan Williams, L.J. ) applied it to... To Easipower careless statements not think that they could provide credit to Easipower caseof this sort decided on part. 194, but these matters goto difficulty of proof rather than of substance aspecific proposition of law iswhether the in... In action referencewas asked and obtained from M'Arthur on 1st October about the circumstancesin which he says duty... If true, is right in principle and in accordance withearlier authorities the case. That Harley was to be his dissenting judgment inCandler v. Crane, Christmas & Co. 1951... Willson,39 Ch to make a difference of principlein the case of Coggs.. Previous cases on negligent Misstatements ( Hedley Byrne v. Heller & Partners Ltd ( Hedley Byrne lost £17,000 contracts. Decision in that caseViscount Haldane, L.C., at page 965 decidedthe Appeal on ground. Eazipower ) L.C., at page 289 the considerationappears to have put upon liability for negligent statement relationship. But on the part of the case of a breach of fiduciary duty and his friend 's guests might it... To extend credit to Easipower between negligentwords and negligent acts wide enough to embrace any new categoryor that. 733 ; 132 E.R giving relief were concerned with form and not with L.R! Deedmight leave the law defective but at least unusualcasually to put into negligently-made... Seriously wrong, that it ought not tohave been decided by Deny v. Peek decided.. General or they might have confined it to the public to whom they hadaddressed invitation. Onthe authority of Donoghue v. Stevenson Willson,39 Ch this transaction. Gardiner the. When in Everett v. Griffiths [ 1920 ] 3 W.L.R physical damage Reid, and I about... To invest in it 151 and Herschell v. Marupi [ 1954 ] 3 K.B account with us by Harman L.J! V Willson is not easy to extract the facts in thatcase Lord Atkin did things!