Adjusted 2
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Transcript of Adjusted 2
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Hedley Byrne & Co Ltd v Heller &Partners Ltd
Abiola Cunningham
Camica Wallen
Garvin Granger Hutson St John
Kerlysse Hilare
Onika Blandin
Nigel
Svetlann Jackson
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Lord Hodosn,
Lord Devlin
Lord Pearce
Key WordsNegligent misrepresentation Assumption of responsibility
Hedley Byrne & Co Ltd v Heller & Partners Ltd
Court House of LordsDecided 28 May 1963
Judge(s) sitting
Lord ReidLord Morris of Borth-Y-Gest,
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CASE SUMMARY
Hedley Byrne was a firm of advertising agents. Their client, EasipowerLtd, put in a large order. Hedley Byrne wanted to check their financialposition, and credit-worthiness, and subsequently asked their bank,National Provincial Bank, to get a report from Easipowersbank, Heller& Partners Ltd., who replied in a letter that was headed, "without
responsibility on the part of this bank"It said that Easipower was, "considered good for its ordinary businessengagements".
The letter was sent for free. Easipower went into liquidation andHedley Byrne lost 17,000 on contracts. Hedley Byrne sued Heller &Partners for negligence, claiming that the information was given
negligently and was misleading. Heller & Partners argued there was noduty of care owed regarding the statements. There was an expressdisclaimer of responsibility and there can therefore be no liability. Thiscase established the doctrine of negligent misrepresentation, but inthis case the disclaimer effectively barred the claim.
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FACTS
Plaintiff (Hedley Bryne) was an advertisement agency,working for a company called Easipower.
The Defendant ( Heller) was the Banker of Easipower
The Plaintiff was concerned about the financialposition of Easipower, and sought help through theirbankers, who obtained information through theDefendant.
The Defendant, through statements and documentsmarked without responsibility on the part of this bank,replied that Easipower is in good a financial position.This was done a couple of times.
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FACTS
Plaintiff relied on this when making investments and
later Easipower went bankrupt, causing the plaintiff
financial loses.
Hedley Byrne lost 17,000 on contracts.
Hedley Byrne sued Heller & Partners for negligence,
claiming that the information was given negligently
and was misleading.
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ISSUES
I. Did Heller, who was not in a contractual or fiduciary
relationship with Hedley, owe a duty of care to
Hedley to not give negligent advice?
II. Did the statement by Heller that the reference was
given without responsibility exclude Heller from
being liable for negligence?
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Negligent Statements
Special relationship?Pure Economic loss?
Duty to care?
Breach of duty?
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JUDGEMENTS
LORD REID: I am therefore of opinion that it is clear that the respondents never
undertook any duty to exercise care in giving their replies. The
appellants cannot succeed unless there was such a duty and
therefore in my judgment this appeal must be dismissed.
LORD DEVLIN:
A man cannot be said voluntarily to be undertaking a responsibility
if at the very moment when he is said to be accepting it he declares
that in fact he is not. The problem of reconciling words ofexemption with the existence of a duty arises only when a party is
claiming exemption from a responsibility which he has already
undertaken or which he is contracting to undertake. For this reason
alone, I would dismiss the appeal.
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PRINCIPLES ESTABLISHED
Lord Oliver developed the Hedley Byrne principles thus: themaking of a statement will give rise to a duty where
advice is sought in circumstances where the adviser is
aware, "actually or inferentially," of the purpose for which the advice is sought;
the adviser is aware that the information will becommunicated to the other party;
the adviser is aware that the recipient will act on that
advice; and the recipient so acts to his detriment.
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CONCLUSION
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Hedley Byrne v Heller (1964)
no need to establish a contractual or fiduciary
relationship
person giving the information must be of special skill(or hold themselves out as having such skill)
assumption of responsibility by the speaker
reasonable reliance by plaintiff
no disclaimer of responsibility
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