DUTY AND ITS SCOPE: DUTY IN RELATION TO CATEGORIES OF HARM 207 52.3 Pure economic loss 5.2.3.1 What is pure economic loss? It is important to learn to distinguish between pure economic loss on the one hand, and physical damage and economic loss consequent on physical damage, on the other. It is comparatively easy to prove a duty of care in respect of physical damage and economic loss ‘consequent on physical damage, which for duty purposes is treated as physical damage. Pure economic loss means a purely financial loss, independent from and not consequent upon any physical damage to the plaintiff or the plaintiff's property. A classic exposition of the distinction comes from the case of Spartan Steel é& Alloys Ltd v Martin & Co (Contractors) Ltd [1973] QB 27. The plaintiff manufactured stainless steel alloys at its factory. Continuous power was required to maintain the temperature in its furnaces used to ‘manufacture the steel alloys. The defendant's employees were engaged in excavation work nearby, and through their negligence in the operation of an excavating shovel, damaged the main, publicly owned cable supplying power to the plaintiff's factory. The plaintiff's operations were shut down for fourteen hours while the cable was repaired. The plaintiff sued the defendant in the tort of negligence, claiming damages (£368) for damage to a “melt” that ‘was in the process of manufacture at the time of the power shutdown, for profits that would have been made had the melt not been damaged (£400), and for profits on another four melts that would have been put into the furnace but for the power shutdown (£1,767). For purposes of the duty determination, the damage ote melt wns cently physical damage attacting a duty.of care on ordinary Donoghue v Sievenson principles. So too the profits that would have been made from that melt, because these were clearly an economic loss consequent on the damage to the melts. As for the profits on the four melts that were not produced during the fourteen-hour power shutdown, on close examination, the loss was purely economic, in no way consequent on physical damage to the plaintiff's property. The plaintiff would have suffered this loss even if it had suffered no damage to the melt in production. One area of controversy occurs where the plaintiff complains of damage to property that on a strict legal interpretation does not belong to him. This commonly occurs in international sale of goods transactions that are subject to a bill of lading. A claim for goods damaged in ‘rans-shipment or lost at sea can normally only be brought by the party who was the owner of the property at the time of loss (as in Mare Rich & Co v Bishop Rock Marine Co Lid (5.1.3 above)), an issue that is governed by the bill of lading and the international law of sales. Risk ‘may not coincide with property in the goods. Ifthe plaintiff, for instance the seller, was at risk but did not have property in the goods at the time the damage occurred, any claim he may bring for loss or mishandling of the goods will be treated as one for pure economic loss (Melissa (HK) Ltd v P&O Nedlloyd (HK) Ltd (1999] 3 HKLRD 674, applying Leigh and Sillivan Lid v Aliakmon Shipping Co Ltd (The Aliakmon) [1986] AC 785). A further problem arises where the plaintiff has purchased property that was negligently constructed and subsequently proved to be defective. However much the property is in need of physical repair, the action will be treated as one for pure economic loss and not for physical damage (see 5.2.3.4 below). The traditional position in negligence law has been that no duty of care is owed for pure economic loss, even where the loss is reasonably foresecable. The position is supported by a number of universally acknowledged policy considerations. In Spartan Steel & Alloys Lid v Martin & Co (Contractors) Ltd, Lord Denning identified those that were pertinent in the case of purely financial losses consequent on a negligently caused power failure: the concern about indeterminate liability and the opening of the floodgates of litigation, the reality that Scanned with CamScanner208 purvor cane lei lureisavisk wall nan shoad be prepared to seco tat tis bet hat sch ese be bore bythe whale community arth bythe sap perpetrator, who fin y vent unialy to be able compenst foal sueh aims tha might sie fom i tof Inadvenons en the vw ht aol loses are nota worthy ofthe I’ protection iyi damage {5232 Pare econo ss and nent ttements Ives fit of every iin HongKong hat pesos sue purely financial losses du tthe corset of oes. Horses a ily narowly defined cass of eases in which ‘eplgnce lav wil permit ener of hse ses. Negligence law has history besa ‘ays eget lees oming win the Scope ofthe ty of areca ‘er he acelin reese, Tis poion canbe explined interme he pal consisted by Lord Deming in Sprtan Stoel & doy Lid Mann & (Co (Canacors Lit—sace tse lasses oc 50 Fequent the cours would be to bsy nding al ofthese acions (he “odes of tigation” would be opened. Fut, ‘bese is ony ass of money hat =u, 5 opposed to propery damage operat injury the court may fe al th ccunsanes ae lee deserving ofa remedy in tt ax. Moreover inthe ease of aeligentsaersens, by theirnture words can spread ikl st ‘be repeated to an ens uber of people, enusng futher floodgates concems. ‘Tradtonaly the eu ve ake he iw tht eeovery To pure econom os shouldbe emit trough otal reeds ony But whats to heppen, then, othe paint wha ase contac? saint context of ssn (eprsentions tht nepligety caused pure ccoonie los sir engin as sng sore noon-contactil context, tht ine ot selene, Mee Bye & Co Ly Heller & Partners Lid aaeslacass The apps sought svice fm is bank rearing the eeitworthines of «potent ‘asm The bank consled the esponen, the bank of the potential customer, fri ‘opnon. The respondent replied on a “widet responsibilty” basis, and provided «| favour pinion ofthe customer on which the ppllns ried. The respondent’ opin rove income, a result of which the appellants sured nancial ls. The pels ved te espondent in nelpence for reovery of that loss. The tial judge fad the repondets negligent but sd hat no dt fete was owed. The Court of Appel ako found no uy of ex ved. The Hous of Lars dismiss the appeal onthe basis that he respondent ad efeivly ered its ait forth opinion, Nonetheless, themermerof the House of Lords wot extensive judpments explaining the circumstances in which ty ofa can rie, assuming no dscaimer as made, Lord Ri, ‘The mast vious difference between negligent words and negligent acts sth. Quite careful people fen express definite opinions on social or informal occasions even ‘when hey se that ber ae iey tobe nfueced by them, and they often do tht ito aking tat care wich they would tkeif asked fr her opinion professionally DUTY ANDITSSCOPE: DUTY INRELATIONTO CATEGORIES OF HARM 209 crinsbasiness connection. The appelu gress tha thr canbe no duty of er on ‘achovasions, and we wee refered to American and South Afian autores whee ‘isresgied bough hi aw pease have gone mach faker han ous as etme, Bat i teat unusual esa opt no eesaon negligent made ‘cs wic ar dangerous. Aman might give aren a neligealy-prepared bole fiumenade wie and is ends pests might dink it with ie ess, Bat itisby 1 meus clear tat those guess would have no acon against the negligent rreubcwrr Anaber obvons ffernc sth negligently made ant wil only eae one sie and so itis not very dict fad the nsesary degre of proximity or ‘pheuhod betwen th naligent manafcturer andthe pron njured. Bu word canbe road wih without the consent th foresight ofthe speaker or writer. veld bons thing to ay hath speaker ones duty tamed eas, batt would ‘going ey fart sy that he ones duty to every limo ansumee" who aon tne wordso his detent I would be ous 1 that speaker or wer eves a fay cn dsl responsibilty ihe wants to, He ithe manuf, could ‘leit of contra that hei otto be ible fr bi npligeoe: bt that contact ‘aot protest im na question with thd party a et thei party was tee ofi ‘Shtszas to me thal there is good sense behind ou preset a that in gener ince! but negligent misrepreseatation gives no case of acon. There mast be ‘soe moe tan he mere missttemen. (hcg cater utores ineadngs slatement by Lord Haldane in Robinson v uk Seta 1916 SC (HL) 154) eral forge ntti nd can solo storing pls fal snip weit pry ekg information oie wstsngeolero eee schadae of exe ast ewan ied ‘ects forhin odo tit nd whee te ther ave efron ‘tron eer ogt ecw tb grr eying on i ‘Aral mn ovine wa lg ste oth hil nd samt sng on won hin thes ois ope hn He bl ep Serna get aoa ovis ogi ere col gh nate sic uienn hat espe osprey fr or en ‘it teen orig whh nf anwar would meg: ud “imiyererwihout ay sch qufeton Ihe hors ot iene be ‘ot i be eld tov acre some eponliy o hianve being rn ‘af ort ie cpl tion wi ingen ‘ach ee she eons ei oe planta, wo were te ont mang te inn, om by sig ht “hy wat fo oo in confnes ad wot pension ot Feats oth pot respotit Sol emoseehw te psn ‘ih teed tt nd nin at he eapndens dierent ‘ten Taher opinion tis cle it te espndets er tn ny ‘ayaa ingingteirps Tc aps cam: end ts he ‘sche day nd hee amy aden sage mse aed Scanned with CamScannerLoe Moris. My Lone, 1 comer ttt sold now be regarded as sted that if someone passed ofa spei sil undrakes qi espetive of onc, opp tat, {betessiance of enatberpein who eis upon such kl, a ty ore wll The fit tat he series be piven by means of or bythe insrumeniality of weds cannakero difeeace Furtemar, fina spec in which personisso placed it ers cold reasonably rey ope is judgment ors sl or upon his bit tomake ‘arf nguiy, pson kes it wpon Rinse wo give information or advice ocr tows is iafomation oradvice te passed on 1, another person who, as be ows soak, il place ele pon then a duty of eae wil aris Ineedaor hone sekto del farther wih hisaspetof be matter, which camot be covered by my semen of poral application, because, in my judges, ‘het nth prset casey te words which they employed eectvelydischined say ssumpion of duty ofc. LoriDei.. {ny opin, appelansin er anpumet edo press Donoghue vSterensonton ‘aT asked weer te principe of pony should not apply aswel owes sto dec I inkitshaldbtas tis only 2 general conception it does ot ther. ‘er fa The try ke the speci propsitn nid dwn by Danoghue ySieen sd tpl lnenly oa eet ora banker’ erence. That wil at oft ‘snr ceospion canotbe applied topes of ape nthe sme way soars ‘ofeonece ero wren th same ay a8 o manafetirer.. | hin tf, thers empl airy to jus your Lordships ia sng ‘int th eagoss of sei reaionsips which may give rise toa duty othe car in word sel a in ded are not limited to contractual relationships ro slonsis of Fury day, but icude als eaioships which nthe words of ‘Lor Shaw ia Macon v Lad Ashburton [1914] AC 932, 972 are “equalet cornet’ tas, whr the san assumption of respons ih bat fort absence of oasieation thr would bea contact. Where thee an expres nderaking, an express waranty as distinct ffom mere represen, ‘here caneline icy. The ical aries in discerning those cases in which dealing i © be impli In his respect the absence of consideration i 5 ‘leva. Payment fr infrmation or vice i very good evidence ta it beg ‘eid pon and tt te iafooer or adviser knows Dat ti. Where tere i 8 censideraton itwl be necessary to exercise rete cae in distinguishing bewed social and posal elon nd beween those which are ofa eartac characte ad thse which ae sol. I may ofen be material to consider waether sviseris acting purely oa of ood nature or wheter he is geting his revard insane inet fom, Theservic tat aback pefors in giving arefrene isnot one sily cat of dese toast comer. I would discourage the customers of te bakit ideas l dough because he bank ad vefsed to testy to thee reat when vas good. regards proposition san pplication ofthe general conception of posit ‘Cees may riz inh ature in which ew and wider proposition, quit independ of any oto of extra, wil be nede.. DUTY ANDITSSCOFE: DUTY IN RELATION TO CATEGORIES OF HARM. 2 ‘the fe ofthe preset css coun forthe espondet.sbi, ie, tit vght st be nfred hatte respondents knew Ut the Nata! Provincial Bask ‘et sci forthe refrence forthe ur ofa usiomer, Ifthe epost id kaw ‘tthe counsel submits that they di not tnd that he referees se shou be commuted 1 the customer; It was intended ely 8 materi upon which the ‘lomerbak oad adv th exstmer ont or responsi seal consder itmesay to examine these contentions were tnt fr the gore! dimer of ‘sponsibility which appears tome in ary eveto be conclusive Lage eniely wih thetesoning an conclusion on thi pont of my able and leamed end, Led Red ‘Ama aot be sd volun 1 be underaking a responsiblity if athe very tnonent went snd tabe acceptin fic hes The problem ‘frconsing worésof exemption withthe eins ofa dt aries ony wbenapary ischinig exemption fioma responsibly which has aledyunderakenor which ‘lsconteing to underake. Forlisreson alone, I would dismis the appeal Apel dosed ‘eet emerge oma cesding ofthe jdgmens asa wholes comprising he reesary ‘only inl defendant who possesesa speci! sll he ing ofadvie win te ‘geo tpi sil, noedge or impued knowledge at things isikly trey ‘atu ave, seal liane by te ingireron tht adie in ccunstncs where liane ‘sareonable anda esultng deimeat sufeed bythe ingiteraisig omit imceumcy ‘fev or isforaton. Of couse, mst be shown that in giving accu adie ‘rinoration te defendsn acted negligently in tate fade sus the sand ofare ‘nized of im inthe circumstances (ce Chap 3 above) Lard Devin described such a rebontip a¢ “eqalent 10 const”. Low Raid spoke of an “assumption of repens” owe an amped formulation he Hedley Byrne isp rans the dng hit ‘sn tally itis evntally board te mislead Althooph the poesbilyof extension of he ile beyond Hele Benes fit ial, slime Easing éeisoaskve shown ‘tte Hedley Byrne principle wil, on the one hand be cireamspety interpreted sal spled where appropriate so at otto opel the mama expecaon of business land he dealings of erdnary peopl on rosin eecasoes, nd onthe oe han be ‘aura with some Nexibilty soa o extend ator remedy in reamsances in which jtesppeorequrea remedy batdonatonth eof sais Hedley Byrne ‘ies Mochi depend onthe crcmstancesinwhichthe advice was ian he ‘esilandlnowedge ofthe pares. However michtberemay have beena special il, niet advice and detrimental reliance, the court wl consider wheter the spe of| ‘ty ion in which the coor should impos ea obiaions. As wil be ee om he aig cases, his resulisinleratvel sue, and exile nterpretions, vena by ly onions hat ae aot ava len arcu ‘Ncauious and inementl approach was ineeed by te Hose of Lord in Cstons Ere Conmisones» Barclays Bank ple (2007 | AC 18 (5233 below, a case conn bank’ fle to implement an injntion obtained by the ima cede atte accounts oft f the bank's cstomes. Though anita erortbenk led ‘wfee te accouns in acordace withthe cout ore, ad pemited te eutomes ‘ikaw lf thee depois, The cout found mo dy of er orth pare econo, Scanned with CamScanneran puTvorcane rating tak Caprese Ply Dihman (5.1.5 above) in entonng tt ee sno aleouhstone oft, and hat assumption of remponnblity wasnota woke testinal se, Apne bes. avin otempingoudernd whether a given fet staton ais the dyer fr nelieny esd pr esr ois to vey the sibel lac ny ofeareas en fd determine whether by analogy to those decisions, say of aecanteesblishedin the ease under coniderton In tis area of thee no han ny fh, reece previous eae lv, nd pune by analogy, ae ese in dining te exces uy oe. In Caparo Indes PlevDickman (15 sore, an action by sharcoldes ang nis fore xononic ss sing ot of ele prepared nancial statement he House of Lod decane Hey Byrne & Co Lid v Haller & Porn Lid Lad ig si hata dof exe fr nelget statement is owed whee: v= thf ing acer nformation wae fly svare ofthe tere of th ‘iascion wich the pli hd in contemplation, knew thatthe advice oe ‘nfrton would be onan dtl o inet and newt was very yt be pai oud eyo tat advice or information nding whether et sotto engaein he tscon in esatemplin, (Copa Inari Pl Dcino agsby fina the Hedley Byrne principle, inc arate etd Hedy Byrne Co dv Hele & Parers Lid knew ihe teat ie ote pif er he pif’ prise purpose for seeking tbe infermation. Ye Xu Finance Co La Delote Haskins and Sells (1986) KL 137 ‘The defend acon bd ben appointed 0 porform special ud fo cris ‘empmis Aver compas he pati, hd eat money to those companies 4 in raliane ote al, ich mas fivoursble to those companies, decided not ones each igh denan repayment. The companies eventually proved tobe une ‘yp sot pi seth acount alepng ta the audit wesegigely conic. Te defend eceutant ple tthe cur to have the action srk ont csingoo resonable case of etna (argig that mo ty of care was recognised byw). Alta te apleson used nthe pi sation was struck out, onthe bass lackot posit. Cheng Je htt vasa euemen fora duty of eae tha the defend! ae intend that he plist ely onesie fr the partcala tansstion. The aif sepa Lion 2. CObviosiy if he defends hud actly itended—and can be shown to ne Ineadetat the pani shold place reliance on ter statement, his wold be almst arcs inexubloing prxiniy, But there sno such requirement in, thd wrong thes cole, ‘Whats plesded ints case hat the defendants new or shoud have koa he pli woald ely on heir steests: para 16 of he statement of eli. Tit, ual senough vaso necesary oo onto aver atthe defendants so itende DDUTYAND ITS SCOPE: DUTY INRELATIONTO CATEGORIES OF MARAE 213 _abjeiveatetion ofthis ature would be imps prove and ean frm pat tbe legal requiement. It doet et appear ia Lord Brie fomulaton of the pacilein Caparo Inds v Dickman as have quoted eri nods eatin [ed Olver speech at pp 638-9. 1 here is any valid distinction between knowledge apr of the defendants and otro, the ie clea om proper reading ofthe Jlpnens in Donoghue v Stevenson that where the House of Lords sefened 10 ‘tin ter Lordships meant intention ata or infeed Pin, fromthe fects as aden th utement of aim, tention ean be infer in his case pst liowed. MypIA std P Chan J aged with Lito VP andthe mater was eid fo i silbseen fom he cates at 52.33, Lord Rid sconep ofessmplionof responsibilty tse play prominent ol in determining the question fury ofeae As pote aut ty Bkdry 2 in Yu Chowne Let Chow Wi Lam (2005) 8 HKCEAR 592, “not ses o sow that party B bas knowingly or deiberelyasumed sch espnstliy, Totstlortheisenc of sucha uty isan objecive oe: Whteritean esomblbe tb has by his conduct accepted responsi” (onthe fc, m0 assumption of tepunbily ould be infeed frm the willgnes ofthe defendant salios wo ansver ‘steesaboutthe loan agresmet ona gratitousbais posed lenders who were nother as). Toa sila fe, ee jcombe Imesmant Ld v Ean Leon Su Hang (CCL. (40, (2005) IKEC 1101. Ala example ofthe application of Hedy Byrne assumption of responsi canbe Sain Zhang Songping v Cuban (ang Kong) Led (DCCS 167201, [2013] CHREC {90 Te psn repesedly soup advice overthe course of wo days rm he dada, ‘nlsono the caeelion of fund asf (USSS0,000) fom her bank acount withthe Duan beach ofthe Bak of China, tan account el by thd party wih he defendant ‘ak Having explained that she was dfauded ino making the tana, eho sought fects the procedure fo its cancelsion, and ingued ato whet tbe sum ha teen ried tothe faster acount Conary tothe fs, he was ase by the ‘adn atte money had not ben credited but eden rene bythe defendant an ‘tte find wold be made one received refund nate fom te Ben of China. In rane on the asrance frm the defendat tn the sum wold be efinded, he di ot ‘ect erin oder ofthe raiser account when sh ubsequety reported th Fd ‘hepa. A weak ater she eared rom the defen tain et thepoper procedure ‘rfid ered th consent from te acount olde eth esters, and) tbe ‘untainfetbee ered to, and wir rome ander account Her negligence Snap the defendant bank was sucess Havng examined the phone omeratons Seen te two partes, the court found that te defendant assumed responsibly by lun sastering the plans questions wihout ey guliieaion 8 1 respoashiiy, ‘ailadcnal nowedge ofthe paint’ reliance nits profesional nowledge. The cout fd hat sae lines was nt unreasonable inthe ceamstnes, the defendant having ined ia numerous phone conersaons hati had made igus Ww the enitanee “pumnt before advising the pint. Scanned with CamScanner216 DuTYor ARE Isuesand Questions (1) Avintresing qusion tes in te conten ofepignt statements: cana mere fare spk give ret ay of cre and nity under the principe in Heit yr & Co Li ler & Partners i! a Bangue Fnanelere dela Cie ‘Sty Mgte ane Coad 991} 2AC 28, the defendant's flare toaie ‘cleat fhe shonesy oe party was ot considered a statement fer tbe paposs of Hedy Byrne labiliy. Howeves, in circumstances where the ‘fed hs pve dvi the pli, has el itself out as compatet 9 ‘dvs tpinovng tat be wold rely on th advice andthen negligently ‘mis ocaretba svc tht ister exon believe i incre, dy ‘arma In Barr Harford Fire Insrance Co (1988) | HKLRD Ai ‘whew thecefendtinancebraer fala correct previously sipped aves ‘onthe aid of iin poi, Sengrost Jin the Court of ist Instance elt datos ened Comer a duty af care was denied wheean ‘ama conpay rent ied advise the claimant tht the borin ch Be os receng ements fot a recognised hospital under th Insure pay e lala Aia Ld Wot King Lok (CSA. 462004, [2s] REC 65}. (2) Lita Welding ine i nae Co Lid vDeloteHastins and Salo the fle at for dy feo ri at cesar ha he defendant have mended plait rely on he utr tbe partclaransction, and hai ‘eect tte defendant year ofthe ature of the ranscton hal be inf coteplsing nd ht the defendant ne or ought te have kaon ‘hte pli weal eyo he au sot without controversy FC ses sche A, util at wl elon for acorn purpose, is itright iC ‘ome andra dy Bt ak sonable exe? This would appear to be te tfesof Lito PS alpen. (9) Fesraerampleofs ae wher Cas beld to ome a duty 0B even thoughthe slenet was made oA sx Srthv Evie § Buh (1990) L AC #31. Hee the eit propery vas eandaled a survey forthe bonafi of is let, £ ‘ening sion Te pititbome buyer esiveda copy of the survey inthe ual couse of evens rele on iin desing to bay the house nd fimase the purse by vy of ea fon he lendig aston. Asi happened the survey vanity prepare nd the hoe was not worth what the pani pd Theplinifecnreislsesbecanse nthe view ofthe House of Lads ‘hea cued in ede Byone Co Ld Heller & Partners Lid were ade ‘nAsa mit fidasty pci te defendant values must be ake ove Tora tt be prchser wuld the sry and ely ont in deciding wheter ‘roa to buy. Ine under the arangement withthe leading instion, ‘te pon was in fit eused apy the sary fee. However, the posiin my be difrent whee th puchase is for lavestnent ether than foe th sn esiece. I Sl v Bont of Scand ple (2011) 1 WLR 3212, DUTYAND ITS SCOPE: DUTY INRELATION TO CATECORIESOF ARM. 215 the gl Cour Appel foand no doy ovedbeeus reine onthe vey, vthout secking a independent assessment was ot easonaly foreseeable fr am imestor no wuld it bjs and equitable tat iii be impose (@ Real tat Yan Kn Ye vAtorney-Ceerl 1987) HKLR. 1154 (ics at 51.2 abore) concer a claim for purl finan oss This fe was an imorant determinant in that ease, contbating othe dein tat 0 duty of tare ws oved by the Commissioner for Depositaking. Companies. The sgpelans did make an argument othe eff that Hedley Byrne lationship se, but this was rete. The oun fund no evidence ofan assmpion of repensibility bythe Commissioner tothe appli for the airs of the company (6 listncoatroversal hata doctor owes Guy feat the ptot but wat shout ‘oa profesional football eub tht arranges medial extent fr player, in cicsaneswherthe chub lames inne le suing fom hears he lye Inet Bronk Albion Footbal Cb Lid v Sey (207]PIQR P, "ReEngish Court of Appeal eld tha 0 duy was one forthe policy reason a toimpose cut woud creat conc of ier (ie doctor owes yt te ‘tata regard hishealth, ad shold not el pressured ny dy tech Toren he player tosction), and hatin uch ceumstances no assumption of bythe doctor the cub could ais. (6 Asa petal ule, slictors donot owe a duty of eae to nn-les in egal ‘tasaton se Ya Chow Leung v Chow Wai Lam abe), Lx Chis Pu Wa» ‘Chan Soi Wing (HCA. 330/201, [2002] HKEC 979, solicitors who merely ‘winesed the signature ona conveyancing document were found not © have sssumel responsibil to explain the terms ofthe docuent (68 ao Law Wan ‘ary W-Buld Development Co Ld (1988) 2 UKLR 43). las eters in Iineraional Trading Co Lid» Lot Kam Man (2008) 2 HKLRD 937. Slcitors ‘ere fund to hive assumed responsibly to pares contacting with the ‘obtor’ ley in cicamstances where the contesting parties pa someof he sob legal fe. (The Hedley Bye principle has aly intervened in non-commercial comets, Chaudry» Prabhakr {1985} 1 WLR 29 isan exception. The plait assed 'y te defendant, 2 soeal acquaintance, inthe selection and purchase ofa scot hod ca, car that proved tobe defective, was found to be ovedady of cary the defendant. (0 Thetor of esse was previously the emedy into for damages ari fom the aking fils sstements. thas survived the inoduction ofregligees iabiliy far fue statements despite its mare onerovs requirement he speaker made tbe satement owing ito be fle A possible reason fri survival may bes ore favourable emetenes rule (ee Cane (2000), (0) The Seuts and Futures Ordinance (Cap 571 108 provides for x statuary «nue of action in aon oat unde the Hedley Bynoprinspe I provides a aye of aaion for damage arising out of misepeseraions, iacoing smglgent misepesettions, inducing a secures wansction. Negge lrepesenttion is dfined ins 10K} as inching “any statement wc, Scanned with CamScannerste sine wie iti mas is file mileading or deceptive andismade wih, resoeable cr hvig been keno ensues aecaaey” (10) Nota whee te aeglient semen cases dives physieal damage rate than ae eone et, of sot based on he Hedley Byrne eer. a itis sd on he nigh rail rom Donoghue» Stevenson ae Cayton Rona So Bers) Led [1962] 2 QB 533, and Part» Colle {1995 2 Leys Rep 255, (11) Foran amiss of how he basi Maley Bye principle has evolved oe te ‘ends ee Ki Buber ele), The Law of Mitremert: 50 years on fon eal Byrne» Heler (Oster Hat Polishing, 2015. 5233 Pare economic ss and mien as or services Heh By & Co Lid Hele & Parnes Ld for many years thought tobe esc vworglgealy made stenens. nee ouside of te anomalous case of lor Boks Lar eet Co id (1983 | AC 520, tte was tom story of the Hadley Byrne eta being api ousde of he context of negligent stalements. The position now apps» ‘ve change.Inpproptcaes, te Hee Byrne priniplecan be aplid where ep ‘eonoisos ws caused yogis conc spose dt words. Indlendoson et Sets Lif(1995]2AC 145 the plait were Leydsaner (e lasrane underesimesies) and were membres of syodicates, in some ease ‘managed by te defends and in others managed through the defendants agra The pli bose peeing sn the defendant for Financial ose, alleging at te ‘etn ind een elie tin tesa and management of the plan’ syns. ‘Aermfenngothrpescberof Lore Mosca Devinn Hedley Byrne & Cod ir (& Pome, Led Gal si: Frm hse sateen ad font optician Hadley Bye, we can deriv sane understanding ofthe rent ofthe principle underlying the case. We can see tat it ‘est upona elon beter the paris, which maybe general or pif tte uation ad which my or may ot be contractual in ature Alf i ‘asi spoke in ems fon pary having assed or undertaken a responsilty ovate the On his poet, Lad Devin spoke in particularly clear vers in ah sg om isspech which have quoted above. Futer, Lord Mons spoke of “pry being posse of "special kl" wich e oder to “app fr he assstune of aoe ho relesupon sich sil”. Bu thefts of ede Byrnes, stich as concerned wth ibility ofabankcr othe recipient fr negligence ate provsionfareeeoepatosl supp, show tat tbe concept ofa speci sil” mst be undrsood bond cerialy broadly eoough to include special knowledge. ‘Asi, hgh Heda Byrne ws concer wih the provision of infomation a die th example give by Lod Devi ofthe relinshipbeteen slctor and cle, ard his and Lord Moris’ stamens of picipl, show thatthe pine ‘eeods beyond the provision of nfrmation an vie wo incode the pefornanceot ‘ter services I fll, of couse, tht albough, inthe case ofthe provision of Infrmaioe aad aves, riage upon it by the cter party wil be necessary 1 a” DUTY AND ITS SCOPE: DUTY IN RELATION TO CATEGORIES OP HARM. 217 sasha cue of ction (because otherwise the neglignce wl ae no caste tfc), severe tore may be ther ceurstanens in which thee wil be the recs ineto givers to the application he prieiple n para asses ‘oecered wil slit and cient demons, whee th pall enue the ‘ent withthe conde of his fr, ger ocinparicl, be maybe elo tne mle oo he defendant fo cxreze dsl and cate in tc cand. Insubsuent eases concerned wih bility under he Hele Bene pipe in pec of glint miztterens, the question hs feu alen whether the if ils win the eaeporyof persons to whom the maker of he statemet oes day fear. In sckng to contin tht category of pesos win reasonable bounds, tho hasbeen some tendency on the pat of he cours to esse the ene af “ssunpionof responsibil” being "unlly tobe elf erealsitsia mast se (ee Sith Erie Bush 1990} | ACS 86-865, pr Led Geis, nde te Cipro Indies Pl v Dick [1990] 2 AC 605, 628, pr Leed Res). However atest in cates sucha the present, in which he same problem does ot ate seams tobe no reason why recourse shoul ated tothe coop hich sppesaferalio ave been adopted none frm or artes, by al of ic Lordips ‘alee Byrne (ep, Lord Rod at pp. AB, 486 and 47; Lod Mors (vith whem Lad Hon agreed), at p454; Lord Dev si. temo, especialy in a context concerted with ibility which may aise ra contacto ina sinaton “equivalent econ’ it mst be expected th a8 lj es wil be aplied when aking the qeesion whet, ina paicular ese, repoailiy shouldbe elo have ben sesmed by he defndat oe pli ‘28 ipa Industries Plev Dickow {1990} 2 AC 60,637, per Loxd Or of ‘xlneton. nado, the concept provides is ewe explanation why ther isso olen in eases of ths kind abou labiliy for pure econ se; fri person {sume esponiiityt smother in eapet of erin serves, thei reas why hesbold not be inl in damages for tht ther in respec of ecnami loss ich ‘ows fom te negligent perfomance of thse series. ellos tha, one thease ‘seid a fling within he Healy Byrne rile, there shald be no nee io nck pon any Further enquiry wheter is “i, jst and reasonable to inpose Tabi fr eoaomiclss—a pat which i consider, of some importance inthe esa. The concept indicate oo that in some cement, forerampe where ‘Geundenatingto fish the relevent serie give ona informal oan thee my be no assumption of respensibiliy; and Iewise tht an assumption of ‘josiiy may be neguved by an appropriste dilimer. 1 wish toad ia utah as Olver eagisdin Mond Bonk Trax Co Ld He, Sub & Kayp [1979] C384, 416F-G cate conceroed with capers billy falco inter and contact, to which Iwill have to refer ina ames) an assumption of sponsibility by for example, professional man ay gv rise bility in espet sfmglzat omissions as muchas negliget as of eommsion, afer example Wen saltor assumes responsi fo basoss on behalf his client and iso ke erase, such as the srvze of document, which al within the esponsibility ‘oassmedy hie. Inde same yn in Spring » Guardian Aszronce Pe 1995] 2 AC 296, the pan an ‘race lesan, decided to leave his employment wih he defiant an join anther Scanned with CamScanner‘he (Sots. tok up en appinnen with Seas subject oa sasfcorychrtr ‘efrane tobe bined em be fondant, Both te defendant and Satish nr sect ‘de Laur Rae, wich put thos sujet 1 the regi under an ligt oon arc reece wien hing » new conpany represent ad fo provide sk ‘efeecsin ete former mployesieqused Pursuant these rues Scosh sot {nd obasd ome eeodan a reece nvespecf te lll. Theeeenc ast ‘vorblesndso Sesh dsmised he pli Te plage hat the feces as insite and that tthe case of lil by Scie, sd ase the enn (iver ai) epigrce. Aa epi secesded ia neglgenes, bu this ison mas ‘evenedinhe Cou of ppl The pint ppaldto the House of Lords. Lord Got ‘The wide sep ofthe nile cgi in Hd Byrne ie eft in he band suemens of prec whieh Thae quod, All the membes of the Appelle Commie a thes spl ia asf te prt resting yp an ssumpton at snderalieg of rapeniy bythe defendant award the pit, couleé with ‘lane by the pi oa he exer byte defendant of de eae and sl. Lark Deva, in parca, sessed hat the picinl rested upon an assumption of rsposiiy when si atp. 31, ht ‘the esenes of the matie inte presenta ‘nia berate same pete aecepance of esponsbliy” For the pupae of theese ow before your Lréshps i, onside, gitmat to proceed on the sae ash Furbo, alboagh por il as coacured with te provision of {nfrmaton an dvi ts ear at teppei the ese sno 0 Lined and ‘tro ia the performs of thesis, afr example the professions} ‘sre rendered by sslcor wo bis een se, in parelar, Lord Dein at p509-50, Accord wher tbe plintfTenrssthe defendant wth thecondotat is fis, n general or in pacar, the defendnt may be held to have asad pes ote pai, ad the pls oh eled on the defends to aise desl and ear, inept osu conduct. Tarpsent proses witha refer the tr ofthe “epi kl!” o wich Latheoisrfred ints stent of pics is, Lenser clea rom thefts fede Bye isl at te xpsion ‘pei sls to be understood ina brood fee, ceil bod eaeph to embrace special Inowledge. Furlermore Lard Mois himel, when sekig of the provision of a sttement in the form of Infra or adie, fred athe defenn’jogment or kl or ability to ake flinch taper thathe eeil myspply in a ase in bch "he font as acs a ifomatn ad flo execs eae (and sl the ‘nea taisis leas) indeving oo hat souce of infomation forthe pupassot comunicingttosnote. Spring» Gurdon dssmonce Pe stsusomfobly wth thea of defamation (Caper ‘low, Fale slemens abouts pre madetosanherareypzlly deal with byte eh ‘eimatin, which temps sk a aans beeen protein of repttion and ne spechlangel tough he aby of feos such as oad piilege (ee Cpe 2 belo) The plain Spring etl caved the quae privilege defer ‘hntsrelywoaldaveen salto the defend, by persuading th cout that aduy of «car in neigece was owed, Notice ast Springs chim for alos chance—in tise ‘los hans of employment In sich ease danoge wl be awarded a the basis ‘eartsasenent of he lined of sucess af te job appli, asin Chap His DUTY AND FS SCOPE: DUTY IN RELATION TO CATEGORIES OF [91]2K5 796 clase brat apliedy Lord Bg Hoton Ez BershieHesth [ner 1987] AC 750 and by Lord Hote in Gree» Set [2005] 2 AC 176 (431 ‘oe Dy ferthemest ramatietrsion oft Madey ye rile took place te cnet cf octrs poesia ngine i alan othe Seelcares of 2 ttamenary ison in the ae tat flo Pi» fone lis35}24¢207 ‘Tetsu, who had quale wth the plain, histo cite, executed wl uting temo of tise He inter recone with i cide, and woe tthe defndat ‘sors, ving introns forthe preparation of revised wil include gis obs {iden Te solstors id nt respond immed, aod fer some mon doting 0 fava new wl and aang for ls exec, The esate before a ae wl was ‘ear op Th pls sod th slits in eligsce At il te judge Bl hat the ‘ns dd mot oe # dy of er othe plas. The Cou of Appeal loved he ‘hi spel and te slr appealed the Howse of Lords. {doen Wakson age oar Lordships sbouldhod hat the defendant scons wer under adit fea ete lit asing fom an extersion ofthe principle of asumptin of ‘apni explored in Healy Byrne & Co Ld Haller & Parner L964) AC ‘6. lany vim alltough the reset eas ist ely coeedby be decided cass, Silent extend the nwt the ied exten popaced wing theneremenal pathy way of aalgy verted in Cepar Inder ple v Delman 1990) Has. Ate dating Notion v Lard Asbarton (1914) AC 952, a ease eancaing a salie's rmntadiein which duty ofeare was inosed onthe asst fduiyreiaonsip, {Browne Wikinso ideatiedWocronas he peasisef he asunpson of espcsilty comp ne usualy asocated with Hadley Byrne» Hel. Lord Browoe-Wiknson one. ‘tum tien to conser Hee Byrne» Hel nth case ths Hous had conser ‘eciunstnces in which there coulé be lib or aegliget misstatement inthe shes of eile a cocrct ora fduiryretiontip between the pares. The Hse was seeking to define further special reaonstp in akon 1, oot sito fe, daca relionships. Sine this House was concemed with eases of aeligeat missaemen! ot avi it asinvibl that ny et id down egied both that he init sbold el onthe {tenet or advice and that th defendant coal sony forsee that he weld do ‘2-Inthe case of clams based on neligent sateen (as opposed o orgie ‘sou he pli wl have no aus of acto atl uss ean show damage ard ‘ecaoaly have sured damageithht eid onthe elign sateen. No wil ‘fend be Showa to have ete the requirement hat be shoud fren arias Scanned with CamScannertobe pulse ireses such liane by the pia to ve rie oe ‘age Terefralboughrclney the plinTsan essential ingredient nace tasedon zien nissatenent or aie it doesnot elo that inal easesbase oa seglignt scion rinaon bythe dena it is necessary in ode to demorste ‘peal relacashp hate plain otreiedon the defendant othe defeat Is Frsen sichaiance insicha ce enrless conduct ean be foreseen a ity tocaaseand doen foteansedarmeto the pant hat shouldbe suiciemttfmnd Iii. liseleardathebasson wich (par fromthe disclaimer the majority wouldhne ‘lth bk ible for nels ivng he reference was that, were int fr dc the bank woud hve assured esponsility fr such ference lous tee psig inthe specs whieh my pon the other way the ressoning ofthe jy omy juemeat pons lerly the it that the crucial clement as, ‘hooting ose thing th ba ad assured to act, and thereby reed the ‘speci easy o which te necesary duty of ear was Founded... ‘sas inh case of dca dts, th assumption of responsibly refered is the defends astmpion of sponsiliy forthe tsk, not the assumption of ea aly Even in cas of ot resins, it isthe underaking to ansme te ‘quson posed whch cress te reionsip IF the responsibility for the wk is ‘Seumol by th efendat he ery cetera special relationship etwoen hime ‘sndtepaiifinreaono which tha (ot the defendan) attaches dy cary ‘cu cally he st sued, sb he ight view it does much tally he ‘oa boat ety of he eanep of sumption of responsbliy.hey posed ale fang tat he pas asumpon of espansibliy” refers to the deine. bavng sumed loa eponsbiy. 1 doubt wae the sme els woul ve teen dicted tbe seth words had ben understood 31 think they shoal, ing t enscioes ssonpion of respenibility fore task rather than 2 concession ofl bility tthe pif fo its earefl performance. Inderdeson Mere Syndicates Lid{1994)3 WLR 761, your Lordships rcey ‘plied the concept of ssurpion of ibility wo cases where the defendants (ie mang gent) hd part oa conta with thd party (the member ge08) ‘nderatnthe mangement oft uderritng ais of plait. Frthe preset pups be eis import foro esos. ist, it shows iit was previously in ‘rs tht the pice of «speci eaonhip arising from the aesumpdon of ‘espansiby ses ppliaeos eas of eigen ats giving rise to pur eananic los os itis ngigent statement. Second it demonstrates tat the fat tha he een ssned a he pli airs prsant to contract wih td ‘ry isnt neces nampa with the Fnding that, by s acting, the deendat lsoenerinoa sei latonship withthe plaitif with wham had no contac (sod tht are wih my ob and learoed fiend Lord Musil that his factor shoul acted the cccsoa hata dt fear will necessarily be foudo cis even uber isa contact cain of obligations designed by the pares» rite tides). Lenn skein oar hes various strands so fr as is necessary forthe pos of isa: am not pupaig to gv any comprehensive statement of i ‘Spt ofthe The of Egle dss ot impose any general duty ofeaeta vad ‘glen mistteents oro aid casing pre economic loss even if econ amag othe pins frieze, However, sucha duty fare wil as ite DUTY AND TS SCOPE: DUTY IN RELATION TO CATEGORIES OF HARM 231 lens raoaship betwen th ates. Although the ete of ac in which shaspecial elatoashipcan bebildoexstareratclosed as yetoly wocsepres tetown dentin) where thre a fdeiary elon an 2) whee the ‘eo as volta answered a question orto sid adie o serves in ‘eamitsnce where knows or oughta low nant pin wil rye Iiaener oe avis. Inboth these stegoies the spec eltinship cree the eta volar assuming to act in he mate by involving hse inthe his airsorby choosing lo speak Ifbedoessoxsumeto actors essa toh ssmmed responsibility for carving hough the mater as eseed pn In sewed Lard Rei in Hee Byrne ler [1968] AC 46, 46 he bas “scmted a mlaioutip..hieh requires him to eerie such crea the citeamsinces ‘ei’ alhogh the exe of the day wl vary fom etgory to category, some ay of ae ass from the epi! restionship. Sch elatoship can are even ‘ph th cefendant has ated inthe pai ais psa to' coat wih 2 sada. ra then to apply those consideration tothe cae ofa clic reied by 2 teterto da wil in fevour of an etended beeficiny. Ara mar of ants, 3 scaroves dt toh xaos proper kil inte preparation ndeezaen fie willand oa wit doe speed. Butte speech of Lord Gof deronsrates, tat ‘snc eblignton soit wily, Breach yiesolistorofsucconracl ay esis ono damage sued bythe testator er his esate; unde ar exiting aw oF ‘one th intended benefisiary, who assured the damage, bs no canseof action satiecoara hte inlended beneficiary a cause of action based on beach of «day of are enedby be rolctorto he beneficiary? The answer tha qusionis epenenrupen ‘de thee is a special relationship between the solicitor and the inended ‘ezefinytowhich he nw ataehes duty of are. Inmy judgment the az oes ae falvitiniter ofthe we extgories of special enantio far recognised Thee isto fiduciary day ved bythe soliitr tothe intended beneficiary. ltough the ‘nciorhaassumedtoactina mateloseytoachng the economi wel bingo iene beneficiary the itended beneficiary wil fen be ignorant ofthat feta aoatberfre ve lid pon te slic. Hover, isle tht the ain ths ares has ot sified .la Cope indies, ev Diconan (1990) 2. AC 605, 618, Lord Bridge, quoting fom Brean J in ‘Siand Shire Counell v Heyman & vnother (1985) 157 CLR 424, 43-4, ews that the law wll develop novel eatgoriesofreligece incremental 2d ‘by amlogy with esbished categories” In my judgment this is eas whee sch