Topic 4: Carelessly causing harm; Negligence and Negligent Misstatement
Commercial Law
Overview of this topic:
Carelessly causing harm to person or property;
Carelessly causing financial harm
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Learning Outcomes:
When will a person be legally responsible for carelessly harming the person or property of another?
When will a person be legally responsible for carelessly causing financial harm to another person?
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Reading materials
Chapter 6 of Nickolas James’s Business Law (Wiley, 5th ed, 2020):
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Carelessly causing harm to person or property
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Causing harm to
person and property
Financial harm
5
TORT OF NEGLIGENCE
TORT OF NEGLIGENCE
A person commits the tort of negligence if they carelessly cause harm to another person.
Negligence is by far the most common tort.
Most acts that cause harm to other people are the result of carelessness rather than intent.
Since the civil liability reforms following the insurance crisis the law of negligence is now a combination of case law and statutory rules.
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TORT OF NEGLIGENCE Elements
TORT OF NEGLIGENCE:ELEMENTS
A person commits the tort of negligence if:
1. They owe the other person a duty of care; and
2. They breach the duty of care; and
3. Their breach causes the other person to suffer
reasonably foreseeable harm.
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TORT OF NEGLIGENCE: Elements
1.Duty of Care
In most cases the establishment of the existence of a
duty of care will be relatively straightforward, provided
that the relationship between the parties falls within the established categories of duty of care [slide 14].
But Note: These established categories exist because of the principles established in Donoghue v Stevenson (1932) AC 562.
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TORT OF NEGLIGENCE: Elements 1.Duty of care
To discuss liability under any one of the established categories would therefore, firstly require a reference to or discussion of Donoghue v Stevenson.
So the starting point in a discussion on Negligence must begin with Donoghue v Stevenson because it was as a result of what said in that case about the elements of Negligence – and in particular, the Duty of Care – that the established duties of care came to be known as such.
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Donoghue v Stevenson: Facts and Decision
Miss Donoghue consumed a drink in a café in Scotland that had been bought by her friend.
She became violently ill after consuming decomposed snail.
Then, a duty of care was only owed to people harmed by the negligent acts of others in specific and limited circumstances:
contract between parties
Manufacturer making something dangerous
Manufacturer acting fraudulently.
Therefore, as the law stood, Miss Donoghue could not take legal action over the snail in her ginger beer.
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Donoghue sued the manufacturer
She claimed that the
manufacturer was negligent – in
that he supplied contaminated
food.
That food caused her harm.
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TORT OF NEGLIGENCE: Elements 1.Duty of care
Issue:
Whether the manufacturer owed Donoghue a duty of care given that there was no contract between the parties and the manufacturer had not acted fraudulently.
It was held that he did. The court took the view that if a manufacturer sells a product which cannot be examined either by the distributor or the ultimate consumer, then that manufacturer owes a duty of care to ensure that the product is free from any defect likely to cause harm.
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TORT OF NEGLIGENCE: Elements 1.Duty of care
During the course of making its decision, the court (per Lord Atkin) made a statement which sets out the components which must be considered when determining whether a duty of care is owed.
This statement is contained in the next slide.
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13
TORT OF NEGLIGENCE: Elements 1.Duty of care
‘The rule that you are to love your neighbour becomes, in law, you must not injure your neighbour; and the lawyer’s question, ‘who is my neighbour?’ receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, in law, is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.’
[Emphasis added].
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TORT OF NEGLIGENCE: Elements 1.Duty of care
So remember that it is a result of the principles stated
in this decision that the established categories of duty of care came into existence because an examination of any of these established categories will reveal that they are based on what was said in that case.
Therefore, an answer on the issue of Negligence should start with Donoghue v Stevenson and then discuss the relevant established head of duty of care.
These established heads of duty of care are set out in
the following slide.
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TORT OF NEGLIGENCE: Elements 1. Duty of care
Established Categories:
Motorists owe a duty of care to other road users.
Doctors owe a duty of care to their patients.
Manufacturers owe a duty of care to people who use their products.
Occupiers owe a duty of care to people who come onto their premises.
Employers owe a duty of care to their employees.
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TORT OF NEGLIGENCE: Elements 1.Duty of care
Lord Atkin’s statement is referred to as the ‘neighbour’ principle and should be the first factor to be discussed when answering a question on whether a duty of care exists.
As the statement indicates, to discuss the issue of whether an individual is a neighbour at law also requires a discussion as to whether the harm was ‘reasonably foreseeable’:
Bourhill v Young [1943] AC 92
An accident occurred as a result of the motor cyclist’s negligent driving. The plaintiff did not see the accident but only the result of it. She suffered nervous shock and sued the motor cyclist.
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TORT OF NEGLIGENCE Elements 1.Duty of care
Issue:
Whether she was owed a duty of care in the circumstances.
It was held that she was not because it was not reasonably foreseeable that the conduct of the motor cyclist would cause harm to the plaintiff.
Accordingly, she was not owed a duty of care.
See also: Chapman v Hearse 106 (CLR) 112
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TORT OF NEGLIGENCE: Elements 1.Duty of care
Finally, the plaintiff must show that the salient features of the case are consistent with the existence of a duty of care.
The salient features are those factors which the court will take into account when determining whether a duty of care exists.
Sullivan v Moody (2001) 207 CLR 562