Liability Claim House

Liability Claim House

Question One

In order to determine whether Hermione will be successful in a claim against Harry, the law of tort is examined. A tort may be defined as the breach of a legal duty owed, independent of contract by one person to another, for which a common law action for unliquidated damages may be brought. If we take into consideration the Hedley Byrne v Heller (1964) case where the claimants were an advertising agency, who had been asked by a firm called Easipower Ltd to buy substantial amounts of advertising space on their behalf. To make sure their clients were creditworthy, Hedley Byrne asked their own bank, the National Provincial, to check on them. National Provincial twice contacted Heller, who were Easipower’s bankers and were backing them financially, to inquire about Easipower’s creditworthiness. Heller gave favourable references on both occasions, but in each time included a disclaimer – ‘without responsibility on the part of this Bank or its officials’. The second inquiry asked whether Easipower was ‘trustworthy, in the way of business, to the extent of £100,000 per annum’, and Heller answered that Easipower was a respectably constituted company, considered good for its ordinary business engagement. This message was conveyed to Hedley Byrne, and , relying on that advice, they entered into a contract with Easipower Ltd. Easipower later went into liquidation, leaving Hedley Byrne to pay the £ 17,000 due to companies from whom they had bought advertising space. Hedley Byrne claimed this amount from Heller. In view of the words disclaiming liability, the House of Lords held that no duty of care was accepted by Heller, and none arose, so the claim failed. However, the House also considered what their conclusion would have been if no words of disclaimer had been used, and this is where the importance of the case lies. Their Lordships stated obiter that in appropriate circumstances, there could be a duty of care to give careful advice, and that breach of that duty could give rise to liability for negligence. The greatest impact of Hedley Byrne v Heller has undoubtedly been in the sphere of professional work, because it is here that one person’s reliance on advice from another is most likely to be regarded as reasonable. In fact, the principle has been extended to situations in which there is no apparent ‘advice’ at all, but where the professional adviser can be said to have assumed responsibility for the service which he provides, hence the Hedley Byrne principals. The House of Lords laid down a number of requirements which claimants would need to satisfy in order to establish a duty of care under Hedley Byrne. There must be a ‘special relationship’ between the parties; a voluntary assumption of responsibility by the party giving the advice; reliance by the other party on that advice or information; and such reliance must be reasonable. Lord Reid made it plain that the ‘special relationship’ requirement meant that Hedley Byrne only covers situations where advice is given in a business context. Advice given off-the-cuff in a social setting will therefore not, as a rule, give rise to a duty of care. In some cases it has been suggested that even in a business context, the required relationship will only exist where the defendants are in the business of providing the actual type of advice that the claimants sought. This was held in Mutual Life and Citizens Assurance v Evatt (1971), where an insurance company had carelessly given false information about a company in which the claimant had invested. The Privy Council held that there was no duty of care; the defendants were in the business of providing insurance, not providing investment advice, and could not be liable for such advice. A majority of the court held that Hedley Byrne should be restricted to cases involving people whose profession centres around giving of advice, such as accountants, solicitors and surveyors. In Smith v Eric S Bush (1990), the claimants were the purchasers of a house which had been negligently surveyed by the defendants, and was worth much less than they had paid for it. The survey had been commissioned by the building society from which the claimants had sought a mortgage, as part of its standard practice of ensuring that the property was worth at least the money that was being lent. However, such surveys were routinely relied upon by purchasers as well, and in fact purchasers actually paid the building society to have the survey done, although the surveyors’ contract was always with the building society. The House of Lords held that in such situations surveyors assumed a duty of care to house purchasers; even though the surveys were not done for the purpose of advising home buyers, surveyors would be well aware that buyers were likely to rely on their valuation, and the surveyors only had the work in the first place because buyers were willing to pay their fees. However it should be noted that this did not impose a particularly wide liability: the extent of the surveyors’ liability was limited to compensating the buyer of the house for up to the value of the house. Therefore, based on the above cases and principals, it is apparent that the surveyor was negligent and that Hermione will definitely be successful in a claim against Harry.

Question two

An employer will only be responsible for torts committed by their employees is those torts are committed in the course of the employment, rather than, as the courts have put it, when the employee is on a ‘frolic of his own’ (Hilton v Thomas Burton (Rhodes) Ltd (1961) ). The tort will have been committed in the course of employment if the act which comprises the tort is one which has been authorised by the employer, even if the employee performs the act in a manner which was not authorised by the employer. An employer may also be liable for acts done by employees (but not independent to contractors) where their behaviour has not been authorised, but is sufficiently connected with authorised acts that it can be regarded as merely an improper way of committing the authorised acts. In the past this has allowed for a wide interpretation of the phase ‘in the course of their employment’. In Century Insurance v Northern Ireland Road Transport (1942), the defendants’ employee, a petrol tanker driver, was unloading petrol from his tanker to underground storage in the claimant’s garage, when he struck a match to light a cigarette and then dropped the lighted match on to the ground. This caused an explosion, damaging the claimant’s property. The defendants were found to be vicariously liable for his negligence, on the basis that what he doing at the time was part of his job, even if he was doing it in a negligent way. It was agreed that the match was struck for his own purposes, not those of the employer, but nevertheless, in the circumstances in which it was done it was still the course of his employment. In the case of Storey v Ashton (1869), some employees had finished delivering wine for their employer and were on their way back after their official work hours were over. They decided to take a detour to visit a relation of one of the employees. On the way there they negligently ran over the claimant. His attempt to sue their employer failed as they were treated as being on a ‘new and independent journey’ from their work trip at the time of the accident. An employer who expressly prohibits an act will not be liable if an employee commits that act. However, the employer may be liable if the prohibition can be regarded as applying to the way in which the job is done, rather than to the scope of the job itself. In Limpus v London General Omnibus Co (1862) a bus driver had been given written instructions not to race with or obstruct other buses. He disobeyed this order, and while racing another bus, he caused a collision with the claimant’s bus, which damaged it. The court held that he was doing an act which he was authorised to do that is driving the bus in such a way as to promote the defendants’ business. This meant that he was within the course of his employment, even though the way he was doing the job was quite improper and had been prohibited. The defendants were vicariously liable. In the cases of criminal acts alleged to be done in the course of employment, tend to take the form of either violent assaults or property offences such as theft. In the case of assaults, the courts are very unlikely to find that the employee acted in the course of employment. Because vicarious liability makes the employer and employee joint tortfeasors, each fully liable to the claimant, an employee who is sued on the basis of vicarious liability is entitled to sue the employee in turn, and recover some or all of the damages paid for the employee’s tort. This is called an indemnity, and the employer’s entitlement to sue may derive either from the provisions of the Civil Liability (Contribution) Act 1978, or in common law under the principle in Lister v Romford Ice and Cold Storage (1957). Vicarious liability obviously conflicts with the basic principle of tort, that wrongdoers should be liable for their own actions. It has been pointed out that the employer is in control of the conduct of employees, and therefore should be responsible for their acts. While this may have persuasive in the past, in modern industrial society, with its increasingly sophisticated division of labour, it is very difficult to believe. This therefore contributes to the reasons why vicarious liability is imposed. The other reasons include the benefit of work done by employees to employers, prevents negligent recruitment, promotion of care by employers to employees if imposition of liability is on employers and an employer will be in the best financial position to meet a claim, either because its resources are greater than those of an individual employee, or, more often because it has relevant insurance cover. Therefore based on the above an employer is always liable for torts committed by the people that he employs to carry out work, unless as in the case of Storey v Ashton mentioned above.

Question Three

The tort of nuisance sets out to protect the right to use and enjoy land, without interference from others. There are actually three types of nuisance, private, public and statutory. The tort of private nuisance essentially arises from the fact that, whether we are out in the countryside or in the middle of a city, we all have neighbours and the way they behave on their land may affect us on ours. The essence of liability for private nuisance is an unreasonable interference with another’s use or enjoyment of land, and in assessing what is reasonable, the courts will try to balance each party’s right to use the land as they wish. In Murdoch v Glacier Co Ltd (1998) the claimant lived near to the defendant’s factory. She complained that a low droning noise which came from the factory at night was preventing her from sleeping. Her evidence included a report from the World Health Organisation stating that this type of noise had been proved to disturb sleep if it went above a particular level, and the noise from the factory was measured and found to be at or above this level. The Court of Appeal held that the trial judge was right in holding that this did not constitute an actionable nuisance considering the area in which the claimant’s house was situated, which was among other things close to a busy bypass, and considering that fact that no other local residents had complained about the noise. Based on the above principal, the locality of the Black’s house would impact on the decision made by the court, the Black’s purchased the house knowing the location, therefore Mr and Mrs Black will be unsuccessful in a claim for damages or loss of enjoyment of the land against the owners of the factory, but may be successful in attaining an injunction. An injunction is the main remedy for nuisance and it makes the defendant stop the activity which is causing the nuisance for a specific time period. The degree of the injunction will depend entirely upon the decision taken by the court of law. In St Helens Smelting Co v Tipping (1865), where the fumes from the copper-smelting works actually damaged trees and shrubs, this is enough grounds for Mr Black to claim against the owners of the factory for damages to the paint of his house. As it should be noted that, where physical damage is caused to the claimants property, the locality is irrelevant. This brings us to the advise for Sirius, in Hunter v Canary Wharf Ltd (1997), the House of Lords emphasised that private nuisance is a tort to land, rather than to those who own or occupy it. This means that no-one, not even the occupier, can recover damages in private nuisance for personal injury. It seems that damage to an occupiers goods is regarded as consequential on the damage to the land, so that damages can be recovered for this. However, public nuisance covers an even wider area than private nuisance, partly because it is not limited to interference with land. Public nuisance falls into two fairly broad categories, the interference with the exercise of public rights and the kind of interference such as noise and smoke, which is commonly a private nuisance, will also become a public nuisance if it affects a sufficiently substantial neighbourhood or section of the public. Whether or not this is so is a question of fact as in the case of A-G v PYA Quarries Ltd (1957), thus as in R v Lloyd (1802), where only three people complained of the noise, the defendant was held not guilty of public nuisance. The fact that a person is inconvenienced by a public nuisance does not of itself entitle him to recover damages in respect of it – Winterbottom v Lord Derby (1867). In order to claim damages Sirius must show that he has suffered some ‘special’ or ‘particular’ damage, over and above what is sustained by the public inn general. This requirement is satisfied due to his deterioration of health. As for Mr Black’s car, the damage to the paintwork, as in the case of Halsey v Esso Petroleum Co Ltd (1961), Mr Black is entitled to complain of the damage that is caused by the smuts from the factory. He would thus be able to recover the costs incurred for the repair of the paintwork to the car.

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