AQA LAW4 Negligent misstatement

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This is liability for negligent advice which is acted upon by C. A `special relationship' is
required for a duty of care to be owed and a claim to succeed (Hedley Byrne v Heller)
The court laid down some guidelines following this case:
1. There must be a special relationship between the parties ­ based on the
special skill possessed by D
2. The person giving the advice must have a special skill relating to the area of
advice given ­ so D knows it's `highly likely' C would rely on the statement
3. C reasonably acted in reliance on the advice
A Special Relationship
This includes any business or professional relationship where C is seeking professional advice
(Howard Marine v Ogden and Sons) but can be a social relationship when
the advice has been sought out from a party with some expertise (Chaudry
v Prabhaker).
A common relationship where a duty is identified includes accountants or
valuers (Yianni v Evans and Sons).
A Special Skill
You can only claim if the party giving the advice is a specialist in the field in which the advice
concerns (Mutual Life and CAO v Evatt)
Reliance on the advice
If there is no reliance there is no liability (JEB v Mark Bloom)
The reliance will not be foreseeable if the claimant belongs to a large group of potential
claimants (Goodwill v British Pregnancy Advisory Service)
A duty could be owed to a 3rd party if it is foreseeable they would rely on the
advice (Smith v Bush)
In Caparo v Dickman, the House of Lords made several observations
regarding the circumstances in which a duty will be owed. Further guidance on
these was made in James McNaughter Paper Group v Hicks Anderson
who said that to establish a duty of care, these factors should be taken into
account:
The purpose for which the statement was made
The purpose for which the statement was communicated
The relationship between the person giving the advice, the person receiving the
advice and any relevant 3rd party
The size of the class the person receiving the advice belonged to
The degree of knowledge of the person giving the advice

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