Business, Legal & Accounting Glossary
n. a requirement that a person act toward others and the public with the watchfulness, attention, caution and prudence that a reasonable person in the circumstances would use. If a person’s actions do not meet this standard of care, then the acts are considered negligent, and any damages resulting may be claimed in a lawsuit for negligence.
It is clear that the law of Negligence cannot make every individual responsible for harm that befalls any other individual, even where there is some causal relationship between the acts of one person and the injury or loss to another. If, for example, I book the last seat on a flight from A to B, with the effect that you cannot get to B to close a lucrative business deal, then in a very real sense I am the cause of your losses. Without my actions, perhaps, you would have secured the deal and made a mint. It is unlikely, I think, that many people would hold me responsible for your misfortunes, even if I foresaw that they were likely. There is, after all, only a limited number of seats on an aeroplane, and why should you get one, and not me? On the other hand, suppose I take the last seat on a flight that you need to get urgent medical treatment only available in another country; and suppose that I ought to have known that you are in this position, and are likely to suffer personal injury as a result. In such a case I suspect that many more would be willing to hold me responsible for your misfortunes. However, it is unlikely that I will be liable in law. Somewhere the law has to distinguish between acceptable careless acts that cause loss or injury to another, and unacceptable careless acts. The notion of ‘duty of care’ is used in English law to fulfil the purpose of making such a distinction. In general, I can be as careless as I like, providing I am under no duty to take care.
There is a huge volume of case law on the duty of care, starting most conspicuously with Donoghue v Stevenson (1932) and going up to the present day. Although lawyers since Donoghue have agreed in principle that there is such a thing as ‘duty of care’, it is not easy to define. Only recently have legal writers started to acknowledge what should have been obvious from the very beginning: there is really no such thing as a duty of care. To say that person A owes person B a duty of care is to say no more than that the courts, for whatever reason, are willing to hold A liable for harm to B that results from something that A did. There are many reasons why the courts decide the duty of care question one way or another. Most obviously, some wrongs cry out for redress. If I run you down in my car because I am reading a book when I should have been watching the road, clearly I should be held liable. To say that one road user has a ‘duty of care’ to another is merely to put this ethical statement into legal terms. On the other hand, the courts may be aware that some wrongs can only be righted at the expense of creating more wrongs later. This thinking is clearly at work in decisions like Murphy v Brentwood DC (1990). In that case, if the inadequate discharge of the local authority’s inspection duties had led to an actual injury, rather than ‘merely’ an economic loss, the authority would almost certainly have been held liable. There is no reason in logic to distinguish a case in which careless exercise of my professional duties leads to your house falling down, from one where my carelessness leads to your spending money to prevent the house falling down. That the local authority in Murphy was not held liable by the House of Lords does not reflect that court’s belief that the Authority acted properly; it merely reflects the inadvisability of making it a general rule that one person can be held liable for the economic misfortunes of another, simply on the grounds that such misfortunes are foreseeable.
Whether there is, in an absolute sense, a real meaning to ‘duty of care’, or it simply encompasses a mixed bag of ethical and policy considerations, the fact remains that the language of duty of care is widely used. If you wish to succeed in a claim for negligence, your first step has to be to show that you were owed a duty of care. Since the term is more-or-less incapable of clear definition, the only way to do that is to show that your situation is similar to one where a duty of care already existed, or show that a principle accepted in another case can be extended to meet your situation. You may also have to show that your case does not fall into a category where a duty of care is not normally found.
At present, the most authoritative guide to establishing a duty of care is probably the House of Lords ruling in Caparo v Dickman 1990. Essentially, to establish that a duty of care is owed, the claimant must show that:
‘Proximity’ in this case means legal, not physical, proximity. The claimant and the defendant are in proximity if there is some sort of relationship, interaction, or dependency between them. Many writers have pointed out that the criteria in Caparo do overlap somewhat.
Of course, there are many situations where a duty of care may be assumed to exist, and it won’t be necessary to invoke the Caparo test. For example, no-one would dispute that road users owe a duty of care to other road users. Moreover, there are situations where the duty of care is imposed by statute; see, for example, the occupier’s liability act (1957). At the same time, there are situations where the courts have been extremely reluctant to impose a duty of care. These situations include those where
The cases of Donoghue v Stevenson , Anns v Merton London Borough Council and Caparo Industries plc v Dickman  were important cases in the development of the test for establishing a duty of care.
Lord Atkin in Donoghue v Stevenson , attempts to set down a test for when duties of care arises. Lord Atkin in his judgment spoke of the neighbour principle:
:”You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, 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 my contemplation as being so affected when I am directing my mind to the acts or omissions which are called into questions.” (per Lord Atkin  AC 562 at p 580)
The neighbour principle means that reasonable care should be taken to avoid harming others whom it is reasonably foreseeable would be directly affected by your actions.
In Anns v Merton London Borough Council, Lord Wilberforce classified the loss suffered by the claimants as ‘material physical’ damage, on which a duty can be owed, rather than pure economic loss, where no duty of care exists. Lord Wilberforce reiterated the neighbour principle in Donoghue v Stevenson , where a duty of care will arise wherever it is reasonably foreseeable that others may be harmed by your carelessness. Lord Wilberforce also set down the rule that duty of care only exists so long as there are no policy reasons to deny or restrict such a duty.
Two main points exist here; that of ‘reasonable foreseeability’ and ‘policy’.
All foreseeable risk might not be reasonably foreseeable. A reasonable person in the defendant’s position has to be able to reasonably foresee the risk; an asteroid strike is not reasonably foreseeable, for instance. Reasonable foreseeability also does not require the exact identity of the claimant to be foreseeable. In Haley v London Electricity Board , a blind man falling into a trench dug up by the Electricity Board is reasonably foreseeable. The Electricity Board need to foresee the exact identity of the blind man to reasonably foresee that a blind man might come along and fall into the trench due to inadequate cordoning of the area of work.
A duty of care may be held not to exist if it contradicts with wider policy issues. In Hill v Chief Constable of West Yorkshire , it was held that no duty of care is owed as inter alia may lead police officers to act in a “detrimentally defensive” manner. It is made clear in the House of lords that such cause of action is not functions of tort. This policy has been further affirmed by Brooks v C of Police for Metropolis  and Smith v the Chief Constable of Sussex Police .
Note that Anns have been overruled by Murphy v Brentwood DC .
Both ==Donoghue v Stevenson , and Anns v Merton LBC  were rejected in Caparo Industries plc v Dickman . Caparo concerns the claimants having bought shares into a firm on the defendant’s inaccurate accounts. It was held that the report was prepared with shareholders in mind, not for takeover bids, and that Caparo’s reliance on Dickman’s report was unreasonable. Most importantly, in this case, a more comprehensive test has emerged.
The Caparo test consists of two tests. The first is an expansion of the two-stage Anns test into a new three-stage test:
The second part of the test is the “incremental and by analogy approach”, where duties are based on previous decisions in cases of analogous situations.
The tests set down in Caparo is ambiguous and its ambiguity is recognised by Lord Roskill in the judgment. However, in practice, the majority of cases have a clear, relevant precedent which can be followed and do not require the Caparo test to establish a duty of care. The Caparo test is only required in novel duty situations, like in Marc Rich & Co AG v Bishop Rock Marine Co Ltd.
In practice, the law is generally more ready and willing to prohibit acts rather than omissions, as in Sutradhar v. Natural Environment Research Council, where the defendant can only be held liable for the things they have done, not for things they have not done. The law also looks into the nature of the harm to determine if it is sufficiently serious to merit legal redress. Mere anxiety is insufficient to ground a claim (Rothwell v Chemical & Insulating Co. Ltd. & Anor). The same argument is also sometimes used to support the law’s restrictive attitude to claims made in respect of pure economic loss (Macfarlane and Another v. Tayside Health Board (Scotland)).
A duty of care may also be denied if it is considered that liability would have an undesirable impact on the defendant or others in his position. In Hill v Chief Constable of West Yorkshire, duty of care is denied for fear that police officers may act overcautiously in their duties. It is not in the public’s best interest for them to act overcautiously. The law also protects the defendant from excessive and crushing liability, where compensation would be overwhelming. Duties in such areas are usually denied in psychiatric injury cases.
Duties may also be denied if liability may cause an undesirable effect on society, as in The Nicholas H  and public authorities cases like Hill v Chief Constable of West Yorkshire, Brooks v C of Police for Metropolis  and Smith v the Chief Constable of Sussex Police  Cases where the court considers itself to be outside its competence will also be denied duty, most commonly where public authorities have acted within their authority.
In general, there are three approaches to establishing duty. The first is for there to be a precedent case. The second is to employ tests specific to the case and the third is to use the Caparo test and principles.
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This glossary post was last updated: 27th April, 2020 | 13 Views.