Today our UK solicitors discuss negligent misstatementnegligent misstatement: a type of negligence action that can....
A claim for negligent misstatementnegligent misstatement: a type of negligence action that can... is a type of legal claim used to recover financial losses caused to a person who has relied upon advice or a statement – either written or verbal – that is negligent.
A successful claim for negligent misstatementnegligent misstatement: a type of negligence action that can... does not require the claimant to prove that he or she had a contractual relationship with whoever is alleged to have given or made the advice or statement. Parties who have been induced to enter into a contract by a negligent misrepresentationnegligent misrepresentation: a false statement made where th... will have separate and distinct statutory claims and remedies under the Misrepresentation Act 1967.
Hedley Byrne v Heller
Prior to the 1964 House of Lords decision in Hedley Byrne v Heller, suing for negligent statements in the absence of a contractual relationship was problematic. Hedley Byrne v Heller established the possibility of and the legal criteria for claims to recover losses flowing from negligent statements.
Essentially the case was about a credit reference given by a bank that was careless and negligent. The claimant relied on the bank’s reference in extending credit terms to a customer. It later transpired that the reference was inaccurate. The customer’s financial position was distinctly worse than the bank had represented and it went into liquidation without paying the claimant’s fees, thus leaving the claimant out of pocket. The court decided that the claimant, in spite of not having a direct contractual relationship with the bank, could in theory recover its losses from the bank because:
- a relationship of sufficient proximity existed between the claimant and the bank and it was reasonable for the bank to appreciate that the claimant would rely on the advice provided; and
- the claimant’s reliance on the advice was itself reasonable and caused loss.
In the same vein, claims for negligent misstatementnegligent misstatement: a type of negligence action that can... have also been successfully brought against valuers providing negligent valuations to mortgagor banks, and against employees giving negligent references about their former employees.
Caparo Industries PLC v Dickman
Since Hedley Byrne v Heller was handed down in 1964, the legal test for negligent misstatementnegligent misstatement: a type of negligence action that can... has been refined somewhat and the test to be applied is set out in the 1990 case of Caparo Industries v Dickman, as follows:
- Harm to the claimant must be as a result of the defendant’s conduct and must have been reasonably foreseeable.
- The parties must be in a relationship of proximity.
- It must be fair, just and reasonable to impose liability
It is to be remembered that, where the party alleged to have made a negligent misstatementnegligent misstatement: a type of negligence action that can... also gives a disclaimerdisclaimer: a formal statement intended to deny or limit leg..., then depending upon the wording of the disclaimerdisclaimer: a formal statement intended to deny or limit leg... and the overall circumstances of the case, the claimant’s case will become harder to prove.
Our litigationlitigation: the bringing of a lawsuit or legal claim in cour... and negligent misstatementnegligent misstatement: a type of negligence action that can... solicitors have regularly advised on claims for negligent misstatementnegligent misstatement: a type of negligence action that can.... You can contact us for a confidential discussion about any of the content you see on this website.