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ADVICE IAN OF ANY ACTION HE MAY TAKE AGAINST WHO TRADES WINS PLC AND MARCUS. ADVICE HIM OF HIS LIABILITY TO PEGGY AND ANY DEFENCES HE MAY USE AGAINST BEN WHO WAS INJURED IN THE CRASH.
There can not be a negligence claim without loss or damage. Ian, who invested his money in a unit trust package, on the advice of Bradley, a financial advisor, lost his investment as the company collapsed. Ian, being aware that there had been negative press surrounding the investments in the company, claiming that it is a "far too speculative package for a novice investor", still encouraged Ian to invest. Therefore, causing a financial loss to Ian.
Negligence is broken down into four components, one of which is that the 'claimant is owed a duty of care'. Duty only exists where the defendant possesses skill in an area of advice given MUTUAL LIFE & CITIZENS ASSURANCE CO V EVATT .
This initially concerns the relationship between both the claimant and the defendant, which must be such, that there must be an obligation upon the defendant to take proper care to avoid causing injury to the claimant.
Duty of care is established in two ways, one where the Neighbour principle ('persons who are closely or directly affected by my act that I ought reasonably to have them in my contemplation as being affected so when I am directing my mind to the acts or omissions in question') is applied, when there are no 'special relationships' which was formulated by Lord Atkins in DONOGHUE V STEVENSON .
In a more recent case, CAPARO INDUSTRIES PLC V DICKMAN where the case involved the liability of an auditor for financial loss suffered by investors, this ultimately led to the three legal principals that need to be considered in order to establish whether a duty of care exists.
The second method applies to Ian and Who Trades Wins Plc (WTW). This is when there is a special relationship between the claimant and the defendant, which in this case is that Bradley's job concerns him giving advice, owing a duty of care, to his customers just like solicitors owe a duty of care to their clients and a manufacturer to there customers.
It has later been suggested that any business or professional relationship has the potential to be a special relationship, HOWARD MARINE & DREDGING CO LTD V OGDEN & SONS LTD .
To establish if a duty of care is owed three elements need to be satisfied: was there reasonable foresight of harm? It is evident that the risk was visible as there had been sufficient negative press urging investors to stay clear from the company, therefore making the danger foreseeable.
Was there sufficient proximity of relationship? Considering that Bradley is a professional financial advisor and his job is one of a specialist, clearly establishes a lawful relationship.
Was it fair, just and reasonable to impose a duty? It can be said that it is fair to impose a duty as WTW was aware that Ian was reliant upon his advice there it is just to impose a duty of acre.
The second element of negligence is to establish whether the 'defendant is in breach of the duty of care', this identifies whether the defendant had not come up to the standard identified by law and if so the defendant is held liable.
The standard of care was defined in BLYTH V BIRMINGHAM WATERWORKS where it was held, by Alderson that negligence is ''the omission to do something which a reasonable man guided upon those considerations...would do''
In the case of HALL V BROOKLANDS AUTO RACING CLUB , Greer LJ described a reasonable man as 'the man on the street' or 'the man who takes the magazines at home, and in the evening pushes the lawn mower in his shirt sleeves'.
However, in this scenario the courts would apply a different standard of care from that of a reasonable person, since the defendant has a special skill which a 'reasonable' person would not possess.
In this situation the standard of care is applied to professionals, who carry the same skills as expertise, as suggested in the 'Bolam Test' .
In BOLAM V FIRERN HOSPITAL MANAGEMENT COMMITTEE , it was held that, other professionals in the medical field would have acted in the same way; as a result the doctor treating the claimant had acted in accordance with the body of medical opinion and was not held negligent.
However, Bradley was alert of the financial situation the company BT was in, yet failed to mention the risk involved to Ian, any other lawful advisor ''reasonable person '' in the same field would not have allowed the transaction to continue. Therefore Bradley fell below the required standard of care that was needed to safeguard Ian's investment.
Along with what a reasonable person would do, the magnitude of the risk needs to be accounted for. This is determined by the likelihood of it occurring and the seriousness of the injury, BOLTON V STONE . The likelihood of this happening to Ian was essentially foreseeable, and the injury again was that of a drastic nature as Ian's Life savings have been lost.
Initially, Bradley can be held liable for his negligent actions, however, WTW is responsible for the damage caused by putting 'enormous pressure to earn high commission for the company through the selling of high risk but highly lucrative investments'.
This is outlined under vicarious liability where three essential components need to be satisfied. They are, the person committing the tort must be an employee as opposed to an independent contractor, the employee must have committed the tort and the tort must be committed in the course of employment. It can be seen that Bradley did commit the offence whilst at work due to the pressure the WTW organisation had put upon him and fellow employees. All three have been satisfied and therefore vicarious liability has been established.
The third element is that chain of causation. The breach must be a factual cause of the damage and the 'but for' test is implemented. This asks the question of, "but for the defendant's breach of duty, would the loss or damage have occurred"? Using this, if Bradley and his organisation didn't push for Ian to make his investment with BT, then the damage would clearly not have occurred.
The final element in establishing negligence is, for how much of the claimant's loss should the defendant be responsible for? i.e remoteness. In other words to what extent of the damage suffered by the claimant, should be attributed by the defendant.
Bradley's advise to Ian can also be characterised under negligent misstatement. It was not before the case of HEDLEY BYRNE V HELLER AND PARTNERS LTD where it was held that liability in tort can be founded upon negligent misstatement.
In the case of CANDLER V CRANE CHRISTMAS & CO where investors relied upon negligently prepared accounts, lost there investments and failed to bring a successful negligence claim.
However in HEDLEY BYRNE V HELLER AND PARTNERS LTD , it was held by the House of Lords that, 'there were circumstances in which a person could be liable in tort for losses caused by a statement which he made if he did not take sufficient care to ensure that his statement was accurate or if he did not make it clear that he had taken no steps to ensure its accuracy'.
This establishes that Bradley did not ensure that he had done everything in his power to inform Ian of the danger of investing in BT. WTW did inflict enormous pressure upon Bradley which resulted in this financial disaster.
The relationship between them is visible, Bradley had exercised his skill and judgement and Ian had acted upon that judgement, establishing that's Ian has lost his investment upon the recommendation of Bradley and WTW.
Marcus Dodgeman failed to type up Ian's ex wife Mel's will. She had sent a letter to Ian informing him that all her valuables will be left to him when she dies. However, his negligence has resulted in Ian potentially losing his ex wife Mel's inheritance.
Nevertheless, in WHITE V JONES where a solicitor failed to draw up a will before the testator's death and the intended beneficiaries lost out on their inheritance. Although the contractual relationship was with the dead client, it was held that a duty of care was owed.
In comparison to Ian, it can be argued that he has the right to his ex wife's inheritance because not only did she acknowledge him by sending him a letter but also informing her solicitor to proceed with the Will.
It was reasonably foreseeable that if the lawyer didn't type the will up, once her death occurs this problem wills arise. There is a sufficient proximity of relationship between Mel and Marcus and it is fair to impose a duty of care as the lawyer had failed to reach the standard required by a professional to his client.
As psychiatric injury is a different form of negligence the same principals apply. The defendant owes a duty to care to the claimant, the defendant breached the duty, the claimant suffered damage and the damage was not too remote.
Ian was speeding (40 mph) on a road were the speed limit was only 30 mph and an accident occurred with 12 year old Ben.
Psychiatric injury suffered must be a 'medically recognised condition' and must be caused by a 'sudden event'.
Before the case of DULIEU V WHITE , it was hard, merely impossible for any one other than the people with injuries, or people within the range of physical impact to bring forward a successful claim as liability was based on the Kennedy test.
It was later extended to the secondary victims, these are the individuals who are not at risk of injury but saw or caused the accident which caused the shock, HAMBROOK V STOKES .
It is clear that there is a duty owed by Ian to Ben, as all drivers owe a duty of care to other drivers and civilians. Furthermore Ian was driving recklessly down a residential area adjacent to a primary school where he should have been more alert as he could foresee the potential danger of his driving.
Firstly, it needs to be established whether Ben was the primary or the secondary victim. As Ben was the one who was immediately involved in the accident and is injured, Ben is the primary victim. The primary victim is the person who would foreseeably suffer physical injuries. A duty of care is owed if the claimant is a reasonably foreseeable person; in this case Ian knew that he could potentially cause an accident
The case of Alcock v Chief Constable of South Yorkshire established the test to establish whether a secondary victim could claim. Here 95 people were killed when an area in a football game was allowed to be crowded which resulted in 95 people being crushed to death.
Claims were made by close family and friends and other members of public who viewed this on national television. However it was held by the House of Lords that 'only people with close ties and love and affection with the victim'. Therefore family members that have a close tie with the claimant, extending to a grandmother that might have brought up the claimant.
Using this it can be stated that, although Peggy is a secondary victim to the crash, she still has grounds upon she can pursue a claim. It states that she is the sole carer for Ben whilst the long periods Ben's father spends in Jail.
Peggy has suffered from post traumatic stress disorder. It is essential that proximity in time and space is established to make a successful claim. The claimant needs to be at the accident when it happens or visits it immediately during the aftermath. Viewing this on a television screen will make the claim insufficient as the full extent of damage cannot be viewed.
As Peggy witnessed the accident first hand, and there is clearly a bond of affection and love between her and her grandchild, as the carer, having established the proximity in time and space Peggy may be able to bring a successful psychiatric injury claim.
However, Ben did run on to the road contributing to the accident. Nonetheless, Ben cannot be held responsible as he is a child, aged twelve. Using this argument, Peggy can be held liable as she is the carer for Ben. Ian has to establish that it was this factor that was a contributory factor to the accident.
Had Ian not been driving negligently, this incident could have been avoided. A similar case to this is Oliver v Birmingham and Midland Motor Omnibus Co Ltd (1933).
In this case the claimant recovered in full for the damages that was caused to the grandfather who was responsible for the claimant and the claimant himself. This like in the case of Peggy involved a careless driving.
This case will however rule against the possibility of using contributory negligence as a defence even though it can be argued that Peggy was a contributory factor.
To conclude, as Bradley wasn't an independent contractor the ultimate liability lies with WTW, as Bradley committed the tort in the course of employment and there is a duty of care owed to Ian. Therefore WTW is responsible for the economic loss suffered by Ian. Ian could recover in full from Marcus for the loss of inheritance as there is a duty of care owed to him. Peggy can recover damages as a secondary victim as she was present at the accident and has a close bond with the claimant Ben. The defence that could be used by Ian was contributory negligence but that is limited as he cannot rely on that due to his careless driving.
Alcock v Chief Constable of South Yorkshire (1992) 4 ALL ER 907
BOLAM V FIRERN HOSPITAL MANAGEMENT COMMITTEE (1957) 2 ALL ER 118
BOLTON V STONE (1951) AC 850
BLYTH V BIRMINGHAM WATERWORKS (1856) 11 EXCH 781
CAPARO INDUSTRIES PLC V DICKMAN (1990) 2 AC 605
CANDLER V CRANE CHRISTMAS & CO (1951) 2 KB 164
DONOGHUE V STEVENSON (1932)AC 562
DULIEU V WHITE (1901) 2 KB 669
HALL V BROOKLANDS AUTO RACING CLUB (1933) 1 KB 205 12
HAMBROOK V STOKES (1925) 1 KB 141
HEDLEY BYRNE V HELLER AND PARTNERS LTD (1964) AC 465
HOWARD MARINE & DREDGING CO LTD V OGDEN & SONS LTD (1978)
MUTUAL LIFE & CITIZENS ASSURANCE CO V EVATT (1971) AC 793
Oliver v Birmingham and Midland Motor Omnibus Co Ltd (1933).
WHITE V JONES (1995) 1 ALL ER 691
STRRETS ON TORTS MURPHY 11TH EDITION
CASE BOOK ON TORTS, RICHARD KINDER, 9TH EDITION
LAW OF TORT, JOHN COOKE