Hi,
I am trying to get my head around professional negligence, in particular the relevant cases. Can you tell me if I am correct in the following, or offer guidance to put me on the right path?
Hedley Byrne & Co Ltd v Heller and Partners Ltd 1963
Here it was decided (as obiter dicta) that a duty of care to avoid financial loss as a result of negligent misstatement can exist even though there is no contractual or fiduciary relationship. This was then extended by:
JEB Fasteners Ltd v Marks, Bloom & Co 1982
Where again it was decided as obiter dicta that the defendants did owe a duty of care to all persons whom they could reasonably foresee would rely on the accounts.
Here is where I am a little confused. From the above case, did the courts then move away from this idea - that a duty is owed to all those who would foreseeably rely on the accounts? Because in:
Caparo Industries Plc v Dickman and Others 1990
It was decided that auditors do not owe a duty of care to the public at large or to shareholders increasing their stakes. It seems to me that either of these groups could foreseeably rely on audited accounts, which then leads me to think that the JEB case is no longer relevant?
In the Caparo case as with JEB, the accounts were in general circulation and there was no indication that either party would rely on them when contemplating a transaction. So, my ultimate question is:
Is it the situation that the obiter dicta decision in the JEB case was ignored in the Caparo case, and the Caparo now has set the binding precedent? So that the JEB case is just a stepping stone to the current situation?
Any help would be greatly appreciated.
I am trying to get my head around professional negligence, in particular the relevant cases. Can you tell me if I am correct in the following, or offer guidance to put me on the right path?
Hedley Byrne & Co Ltd v Heller and Partners Ltd 1963
Here it was decided (as obiter dicta) that a duty of care to avoid financial loss as a result of negligent misstatement can exist even though there is no contractual or fiduciary relationship. This was then extended by:
JEB Fasteners Ltd v Marks, Bloom & Co 1982
Where again it was decided as obiter dicta that the defendants did owe a duty of care to all persons whom they could reasonably foresee would rely on the accounts.
Here is where I am a little confused. From the above case, did the courts then move away from this idea - that a duty is owed to all those who would foreseeably rely on the accounts? Because in:
Caparo Industries Plc v Dickman and Others 1990
It was decided that auditors do not owe a duty of care to the public at large or to shareholders increasing their stakes. It seems to me that either of these groups could foreseeably rely on audited accounts, which then leads me to think that the JEB case is no longer relevant?
In the Caparo case as with JEB, the accounts were in general circulation and there was no indication that either party would rely on them when contemplating a transaction. So, my ultimate question is:
Is it the situation that the obiter dicta decision in the JEB case was ignored in the Caparo case, and the Caparo now has set the binding precedent? So that the JEB case is just a stepping stone to the current situation?
Any help would be greatly appreciated.
