Duty of Care:

This is the first requirement that needs to be proven/established by the claimant.

A person isn’t always liable for his carelessness/negligence. There is always a legal device of
controlling when and where someone should be made liable and this is the requirement of
“duty of care”( core ingredient of the tort). A person will only be liable in negligence if he is
under a legal duty to take care.

Definition: legal obligation to take reasonable care not to harm or cause damage to another.

Two Questions : 1). the tortfeasor owed the claimant a duty of care

2). What is the scope of the duty which exists ( which means to spell out that
the duty of care is as follows.) Even if the D owed a duty of care to some people, C has to
establish that he was within the scope of that duty on the particular facts.

Functions of DOC:

 A general principle to develop law

Concept by means of which tort of negligence has evolved. Provides an
overall framework for the huge variety of situations in which law may impose
liability. Legal device used to determine whether there should be liability for a
particular activity within society.

 Control device/mechanism (limitation):

Primary control device used by the courts to keep liability for negligence
within what they regard as acceptable limits. Used to expand or contract the scope of
negligence. It determines When should a person be held responsible for the
consequences of his negligence and when should he be safeguarded against liability
in respect of those consequences.

Involves policy judgments and possesses a moral character because courts are judging
the seriousness of an activity according to the standards of behaviour in society at the
time
1. HISTORICAL DEVELOPMENT:

How do we determine whether for a particular situation, duty of care exists or not:

The scope of the duty of care and in turn the ambit of negligence as a whole has been
developed over the years (because new situations come up before the courts which didn’t
exist before.)

The notion that liability in negligence was based on the existence of a duty owed by C to D
was slow to take hold, but … early 19th century cases:
Ansell v Waterhouse:
Damages could be sought for “the negligent or willful conduct of the party sued, in doing or
omitting something contrary to the duty which the law casts on him in the particular case.”

However, it was not clear when such a duty would be imposed. There was only a list of factual
situations where a duty had been held to exist.

Winterbottom v Wright [1842:

The plaintiff Winterbottom had been contracted by the Postmaster-General to drive a mail coach
supplied by the Postmaster. The defendant Wright had been contracted by the Postmaster to
maintain the coach in a safe state. The coach collapsed while Winterbottom was driving and he
was injured. He claimed that Wright had "negligently conducted himself, and so utterly
disregarded his aforesaid contract and so wholly and negligently failed to perform his duty in this
behalf."[1]
In Winterbottom v. Wright, the court held that the plaintiff had no redress. It held that since the
defendant had a duty of care in contract it could not also have a duty of care in tort.
P could claim under contract to which he was party only and could not rely on an obligation
arising under contract to which he was not a party.
In 1842, the law’s only recognition of "negligence" was in respect of a breach of contract. As the
plaintiff was not in a contract with the defendant the court ruled in favour of the defendant on the
basis of the doctrine of privity of contract.
The principle of Winterbottom meant that consumers who were injured by defective products in
the 19th century had no action against the defective product's manufacturer

“The only safe rule is to confine the right to recover to those who enter into the contract; if we go
one step beyond that, there is no reason why we should not go fifty …” --floodgates argument
The case was also possibly influenced by public policy. If the plaintiff were able to sue “there
would be unlimited actions”
Until about the mid- 19th Century, liability for negligence was only reserved for certain
particular circumstances and was not a principle of general application. Law had laid down a
number of specific situations where the courts would find duty of care. It was an easy procedure
but did not cater to new situations or new set of facts (would lead to law of torts becoming
stagnat) . A general principle/rule was lacking of which the various cases were illustrations. In a
novel situation, there was no general test to guide as to the existence of DOC.

Heaven v Pender [1883]:

Courts acknowledged and emphasized for the first time that for a case to succeed in
negligence there must be a duty of care.
This was the first attempt to rationalize the situations in which a duty may be imposed.
Brett MR/ Lord Esher: duty arises when everyone of “ordinary sense” recognizes that a
person can cause harm to another or his property if he doesn’t exercise “ordinary care and
skill” in his own conduct.
This attempt to form a general principle was rejected by other judges.

Donoghue V Stevenson[1932]:

Until this landmark decision, there was no general test for determination of duty of care in a novel
situation. Courts would look at previously laid down precedents for guidance. If the courts would
hold that no duty exists unless an earlier precedent established such a duty, the law of torts would
remain frozen and static.

In this case, the most important generalization was made by Lord Atkin. His judgment is
considered to be laying down the foundation of modern law of negligence. An attempt was made
for the first time to formulate a general rule for existence of duty of care.

Facts:
The defendants were manufacturers of ginger beer and the plaintiff purchased, through a friend, a
bottle of their ginger beer. After drinking some of the contents of the ginger beer the plaintiff
poured out the contents of the ginger beer and found a decomposed snail in it. She claimed to
have suffered severe shock and became ill as a result of this incident. Since she did not have any
contract with the manufacturers she decided to sue them for the tort of negligence.

Courts found in favour of the claimant and held that the manufacturer owe a duty to the ultimate
consumer
Two important Aspects
i. Narrow rule: duty of care owed to ultimate consumer.
Exposed ‘privity of contract’ fallacy i.e. existence of a contract b/w D and 3rd party
didn’t prevent D from owing a duty to P in tort in relation to performance of contract.

Contract fallacy is an idea according to which if A and B are in a contractual

relationship, A cannot owe a duty of care in tort to a 3rd party who is not privy to the
contract and who is injured by the negligent performance of the contract.(Reason:the
3rd party is seeking to take advantage of a contract to which he is not privy.) the
fallacy lies in the fact that the 3rd party\s claim is in tort , not contract and there is no
reason why a contractual relationship between A and B should preclude a tortuous
duty of care owed to C in performance of the contract. Winterbottom v Wright was
distinguished.

ii. Wider rule: neighbor principle.

Lord Atkin emphasized the need to lay down a test to determine duty of care in
future novel situations which covers past situations as well “There must be some
general concept of relations giving rise to a duty of care and particular cases where
liability has been found are merely instances which fall into that general concept”.

“The rule that you are to love your neighbour becomes in law, you must not injure
your neighbour … 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
contemplation as being so affected when I am directing my mind to the acts or
omissions which are called in question.”

Importance: (1) it finally set at rest any possible doubts about whether the tort of
negligence was capable of further expansion. (2) Emphasises that question of duty is
one of law not fact, that is why general principle can cover variety of situations.

Lord Atkin’s broad moral principle should be contrasted with Lord Macmillan’s more
pragmatic approach.
 Lord MacMillion: “…conception of legal responsibility may develop in adaptation to
altering social conditions and standards. The criterion of judgment must adjust and
adapt itself to the changing circumstances of life. The categories of negligence are
never closed.”
This is a more pragmatic approach but gives little practical guidance on when duty of
care should be owed and leaves issue to be decided on each specific factual matrix …
uncertainty.this approach is similar to modern Caparo approach.

Lord Buckmaster (dissenting): floodgates argument

Criticism:
 Too wide: although the neighbour principle provides a unifying thread for
those relations in which liability for negligent conduct is imposed and it isa
general principle which can be applied to new situations, , it is very wide.
 The principle caused much judicial reluctance as to it application to other
areas of activity nor did it have any impact on the areas where duty has not
been imposed previously.

Note: before one falls back on a general test, one must ascertain whether on similar
facts the courts have already recognized a duty. Examples include, makers or
repairers of goods owe a duty to those who use those goods. Those carrying out
activities on a highway owing a duty to other highway users etc.

Although, the “neighbour principle” provided a unifying structure for the tort of negligence and a
general principle which can be applied to new situations, not falling within the traditional
categories…However, some of the judiciary was reluctant to accept that the principle set out by
Lord Atkin had the effect of forming a new principle which was applicable to new situations,
therefore initial reaction to Lord Atkin’s principle was not positive.

Ultramares Corp v Touche, Niven & Co:

Cardozo J: major concern was that recognition of DOC would result in “liability in an
indeterminate amount for an indeterminate time to an indeterminate class”

Candler v Crane Christmas & Co [1951]:

For the first time a claim was brought for compensation for loss suffered due to negligent
advice/misstatement. The Court was unwilling to extend liability for negligent misstatement
causing economic loss. Refused to adopt Lord Atkins’ approach because it was too liberal …
but recognized that: “in accordance with changing social needs and standards new classes of
persons legally bound or entitled to the exercise of care may from time to time emerge”.

Hedley Byrne v Heller [1964]:

It was finally in 1964 in Hedley Byrne& Co. v Heller & Partners that the HoL did extend
liability for economic loss caused by negligent misstatement, however, even then, they did not
apply the ordinary neighbourhood principle for fear that it would lead to too great an ambit of
liability and open the floodgates. However, Hedley Byrne is important because it showed the
willingness of the Courts to expand the scope of liability in negligence in appropriate cases.

Over the next several decades after Lord Atkin’s formulation of the ‘neighbour principle’, new
duty situations were readily recognized by the courts.

Carmarthenshire County Council v Lewis [1955]:

Children from a nursery ran onto the road and lorry driver swerved the lorry to avoid injuring
them. Lorry struck a telegraph pole and driver died. Held: nursery owed DOC to the driver to
exercise reasonable supervision over the children so as to prevent them from endangering his
safety on the road.

Buckland v Guildford Gas Light and Coke Co [1949]:

An electricity authority that had high-voltage wires near a climbable tree was held liable to the
personal representatives of a child who trespassed off a nearby footpath, climbed the tree, and
was killed.

Home Office v Dorset Yacht:

Lord Reid gave explicit recognition to Atkin’s principle  called Donoghue a “milestone”… lets
adopt a principle through which we can expand and develop the law. The time had come to
regard the neighbour principle as applicable to all cases where there was no justification or valid
explanation for its exclusion. However neighbor principle is not a statutory definition and subject
to qualification.
Lord Reid stated:
“Donoghue may be regarded as a milestone and Lord Atkin’s speech should be regarded as a
statement of principle…however it is not a statutory definition and will require qualification in
new circumstances…”

Anns V Merton London Borough Council [1978]:

Took the Donoghue approach further by formulating two stage test. Lord Wilberforce took the
development of a general principle which could be applied to all cases a step further…
He stated very clearly that because of the decisions of Donoghue, Hedley Byrne & Home
Office v Dorset, it was now accepted that in order to establish a duty of care arose in a particular
situation it was not necessary to bring the facts of that case within previous situations. Instead of
fitting the facts at hand within previous situations a two-stage approach had to be taken.

Lord Wilberforce: 2 stage approach

i). Proximity/Neighborhood: the judge must ask as to whether b/w the tortfeasor and the victim
there exists a sufficient r/ship of proximity or neighborhood such that in the reasonable
contemplation of the former carelessness on his part may be likely to cause damage to the other,
in which case a duty of care prima facie arises.

ii). Policy considerations: the judge must ask whether there are any considerations
which ought to negative or to reduce or limit the scope of the duty or the class of persons to
whom it is owed or the damages to which a breach of it may give rise.

The first question asked by the courts is that was the harm to the claimant forseeable. If yes, it
raises a presumption of existence of duty. Then the second question asked is that is there any
valid policy reason based on which existence of duty can be denied to the claimant. If yes, then
the presumption is rebutted.

This two-tier approach was the most liberal the judiciary ever got in developing the tort of
negligence and its effect was to considerably expand the scope of liability for certain situations.

Ashton v Turner [1981]:

Example of application of Anns test: court refused to give a remedy to C who was a
criminal. He was injured by the negligence of his drunken companion while driving their
getaway car. Injury to C was readily foreseeable but as a matter of policy no duty was
recognised as owed by one participant of a crime to another.

Governors of Peabody v Sir Lindsay Parkinson [1785]:

Lord Keith said that Lord Wilberforce’s judgment in Anns should not be considered as if
it was of a authoritative or definitive character( he warned against the danger of treating
these statements as definitive). According to Lord Keith, the proper procedure was to
determine whether the particular defendant owed the plaintiff a duty of care within the
scope contended. He emphasized that although a relationship of proximity as Lord Atkins
suggested must exist, it is important not just to recognize whether there is a duty of care
 but to determine the scope of that duty. Scope is determined by looking at all the
circumstances pertaining to the given relationship. While looking at all the circumstances
it must be seen whether it would be just and reasonable to impose a duty of care on the
particular defendant.-----(uncertainty)

Leigh & Sillivan v The Aliakmon Shipping [1985]:

Lord Wilberforce’s judgement was also criticized by Lord . He said that Lord
Wilberforce’s test was not some new & revolutionary test and would not by logical
application enable the courts to decide in every case whether or not a duty of care existed.
He also expressed reservations about allowing the courts to have a free hand/discretion at
determining for itself when there should be liability for negligence.

The first stage of Wilberforce’s two-stage test is too broad and will almost always be
satisfied so it leaves too much dependent on the second stage. At the second stage, the
judge will embark on his journey to discover whether there is any consideration that limits
the scope of the duty. One judge’s perception will differ from another---(uncertainty,
inconsistency and judicial lawmaking and defeats the very purpose of a general principle.)

Lord Brandon remarked that the two stage test has been given in a novel situation and thus
does not cater to and is completely unsuitable for situations where there was a precedent to
follow. Therefore for him it was not a ‘universally applicable test’ for determination of
duty of care.

The line of reasoning and reference to previous authority in this judgment seemed to take
the development of the duty of care back to the pre-Donoghue stage where a duty of care
only existed where it fell in the circumstances of previous cases.

Other Criticisms:

 The first stage corresponds to Lord Atkin’s neighbour principle as it emhpasises on

proximity and forseeability while the second stage has been met with a lot of criticism. It
gives too much discretion to the judges and would always be left to their perception. The
first stage would almost always be satisfied while the second stage would be left to the
discretion/perception of the courts. Therefore the test is too expansive, liberal and
subjective
 The test is also illogical in the sense that it widens the ambit at the 1 st stage only to
narrow it down at the second
 Produced too much enthusiasm in the judges who used it to attack previously well
entrenched principles on non liability. Gave the courts a license to overturn long-
established authorities denying existence of duty (e.g. for pure economic loss … Junior
Books v Veitchi). Therefore sudden expansion of scope of negligence which was not
really desirable.
  Recognizes presumption of liability in every case where injury to P is reasonably
foreseeable, and put on D onus of identifying reasons of public policy which mitigate
imposition of duty. “Foreseeability of likely harm is not in itself a sufficient test of
liability in negligence. Some further ingredient is invariably needed to establish the
requisite proximity of relationship b/w claimant and defendant…” ~ Lord Keith in Hill v
Chief Constable of West Yorkshire [1988]

Yeun Kun Yeu v AG of Hong Kong [1988]:

An investing company making false statements about its accounts was registered by the
government. The company eventually went into liquidation. The Claimant who was an investor
and had lost his money sued the government because it had failed to check falsified documents.

After a number of cases which cast doubt on Anns, this was the decisive case which caused
“counter revolution” and Anns was subjected to reinterpretation.
Lord Keith made a second attack on Lord Wilberforce’s two-stage Anns test. He stated that the
two stage test has been elevated to a level of importance greater than its merits and even greater
than the intention of the author. According to him, in light of the developments and case-law
following the Ann’s decision it should be recognised for the future that the two-stage test is not
to be regarded as in all circumstances a suitable test for determining when a duty of care arises
and it should be abandoned and disregarded completely.

GENERAL PRINCIPLE v. REASON BY ANALOGY (Incremental Approach)

Murphy v Brentwood District Council [1991]:

Lord Keith: instead of attempting to formulate a general test by which a duty of care can be
discovered (rather than starting from a prima facie assumption that where a defendant’s
carelessness causes forseeable damage Doc will exist subject to policy considerations which may
negative such a duty), it would be preferable to adopt the incremental approach discussed by
Justice Brennan in the case of Council of Sutherland v Heyman [1985] (Australian case) (in
this case Brennan J came up with a new approach i.e incremental approach and Lord Keith
pointed out that this is the correct approach)

Incremental Approach: rather than looking for a general principle and a massive extension of
DOC, the law should develop novel categories of negligence incrementally and by analogy with
previously established categories. We should expand and gradually develop the scope of duty of
care through reasoning by analogy (give examples)

Advantages of incremental approach: the 2 stage test gave too much discretion to the judges. By
following the incremental approach, the courts do not have to place reliance on considerations of
policy. The law can develop in a rational manner

Disadvantage: once the law has taken a wrong turn, incrementalism cannot provide an answer,

Caparo Industries v Dickman Plc [1990]:

An auditor was sued by the investors for the financial loss that they suffered due to his
negligence (facts in detail later)

 In this case, the incremental approach was approved and supported by Lord Bridge.he
recognized the wisdom of Brennan J .

 Lord Bridge in this case compared three different stages/ eras. He traced development of
general principle from Donoghue to Anns.

- Pre-Donoghue: this can be summarized as a traditional/conservative approach where

the duty of care was only found in a few specific situations (in order to decide that
duty of care arises in a particular situation, it was necessary to bring the facts of the
present situation within the facts of previously decided situations in which duty of
care has been held to exist.)
- Donoghue: new modern approach was introduced  develop and formulate a general
principle which was common to previous cases and could be used in future novel
situations. A general principle must be formulated which can be applied in all
circumstances to determine the existence of a duty of care
- Post Donoghue: Anns: Wilberforce tried to set down a precise comprehensive test,
which failed. Why? Many decisions since Anns, most notably judgments delivered by
Lord Keith ,have emphasised inability of a single general principle to provide a
practical test which can be applied to every situation to determine whether a duty of
care is owed and if so, what is its scope. The concept of negligence is too fluid to be
contained in a single general principle.

Lord Bridge: “It is never sufficient to ask simply whether A owes B a duty of care. It
is always necessary to determine the scope of the duty by reference to the kind of
damage from which A must take care to save B”
 Lord Oliver: “… to search for any single formula which will serve as a general test of
liability is to pursue a will-o-the wisp.”

 The highlight of the case was the three stage test laid down by Lord Bridge in
order to establish duty of care---current test

Whenever a situation comes before the courts, they should:

-Either look for a precedent: if there is a previous case in which liability was found the Courts
will be quite inclined to finding liability in a similarly placed situation and vice versa the courts
will be reluctant to find liability where there is a previous authority in which it was not found
UNLESS the courts held that the previous authority is not directly relevant or that it would still
be just and reasonable to extend liability

OR

If a completely novel situation comes before them, in which there is no previous authority which
inclines the Court either way, the courts will reason by analogy in absence of precedent (the law
should develop novel categories of negligence incrementally and by analogy with established
categories) and will employ Lord Bridge’s three stage test.

Three Stage Test:

A duty of care will now be imposed if three requirements are satisfied:

i. Reasonable foreseeability of damage to the claimant (the loss must be

reasonably forseeable)
ii. R/ship of proximity b/w C and D
iii. Fair, just and reasonable in the circumstances for a DOC to be imposed.

(all three elements must be established by the Claimant before a DOC will be imposed)

i. Forseeability:
it’s a necessary requirement, but not sufficient by itself so even if it was reasonably
foreseeable but it is not fair and just to impose liability then the DOC will not be imposed.

Law Society v KPMG Marwick [2000]:

Lord Woolf adopted Lord Bridge’s judgment in Caparo.
An objective test: it is the foresight of the reasonable man standing in the shoes of the
defendant (i.e. faced with the same circumstances) which is used to determine whether or
 not there should be liability (subject to other conditions being fulfilled) and not the
foresight of the particular defendant.

Claimant must be able to establish that the Defendant could reasonably forsee both C as an
individual (or member of a class) and injury of the kind that occurred.

C as an individual (or member of the class) must be reasonably forseeable:

The plaintiff must be able to show that it could be reasonably foreseen that he would
suffer loss as a result of the negligence, as opposed to simply showing that it was
reasonably foreseeable that some person would suffer a loss

Bourhill v Young (1943) :

The plaintiff had witnessed an accident, caused by the negligence of the defendant, by
hearing the crash and then seeing the aftermath later when arriving at the scene. As a result
she suffered nervous shock and her child was born stillborn. The Court held that liability
would not extend to her because she was so far from the accident that it was not reasonably
foreseeable that she would suffer loss at such a distance. The fact that it was reasonably
foreseeable that others at the immediate scene of the crime might suffer nervous shock was
irrelevant because she could not base her case on a wrong which was reasonably
foreseeable to others.

Haley v London Electricity Board [1965]:

D dug trench in street and left hammer on the ground. They took measures to help ensure
safety of passers-by but they were only adequate to the needs of passers-by with decent
eyesight. The claimant, who was blind and alone, suffered serious injury when he tripped
over the hammer. HOL: it was incumbent on D to take reasonable care for the safety of all
persons using the highway, including the blind and the infirm. Just because blind persons
constitute only small percentage of the population does not make them unforeseeable.

The injury of the kind that occurred must also be reasonably forseeable:

The Claimant must be able to show that the particular kind of damage that he suffered was
reasonably forseeable . while a defendant may be under a duty to protect a C from personal
injury, he may not under the duty to protect him in respect of economic loss.

Roe v Minister of Health (1954)

ii. Relationship of Proximity:

Proximity=closeness/nearness in space, time or relationship. A person who will be closely and
directly affected by my actions will have a proximate relationship with me. A close relationship
between the parties.

There must be a relationship of proximity between the tortfeasor and the victim. Proximity must
exist together with the other two elements. It’s not sufficient alone.

This requirement is a bit vague such that its meaning is not clear. The meaning of the phrase of
“proximate relationship” was considered at length by Lord Keith in Yeun Kun Yeu.

Yeun Kun Yeu v AG of Hong Kong

Lord Keith stated there that there were 2 separate interpretations of this phrase

a. the first was that it simply means foreseeability of harm. Proximity was
considered synonymous with foreseeability. Whoever you can foresee as being
harmed as a result of your actions is someone with whom you are proximate. ( the
pedestrian was in proximity to the car and therefore it was foreseeable that he
should be injured or one can readily foresee that careless driving by X may cause
harm to Y if Y is in X’s vicinity). This was the interpretation adopted by Lord
Atkin in Donoghue and Lord Wilberforce in Anns 2 stage test.
b. The recent trend is to view proximity as a composite test looking at all the
circumstances of a given r/ship. Now it’s the whole concept of necessary
relationship between the plaintiff and the defendant. So it means that now
elements other than foreseeability will be looked at to establish proximity,
however no indication has been given as to what are the other ingredients of the
necessary relationship. It is now considered as a conceptually distinct
requirement.

Hill v Chief Constable of West Yorkshire (1989):

The courts must look for some further ingredient in addition to foreseeability of harm to
establish a proximate relationship and the courts must carefully analyse and consider all the
circumstances of the case to discover any such ingredient. This necessary ingredient may
vary from case to case

Goodwill v British Pregnancy Advisory Service [1996]:

D performed a vasectomy on a man who three years later became C’s lover. Knowing that
he had had a vasectomy, the couple did not use contraception. But C became pregnant and
gave birth to a child. The vasectomy had, as a tiny number of such procedures do,
 spontaneously reversed. C claimed that D owed her a duty and was negligent in failing to
warn her lover of the possibility that he might regain his fertility. Her claim was struck out.
Obiter: if C’s lover had been her husband or partner, and if the doctor had known that the
vasectomy was intended to be as much for her benefit as the patient’s, a duty might have
been owed to C. the relationship between the C and D was insufficiently proximate for a
duty to be imposed on D.

Sutradhar v NERC [2006]:

NERC failed to identify the presence of arsenic in a potential Bangladeshi water supply
upon testing the water. It was held that it didn’t owe a DOC given that the testing had been
commissioned by a 3rd party. There was no ‘directness and immediacy b/w D’s role in
events and C’s injuries … the essential touchstones of proximity are missing’. “The fact
that one has expert knowledge does not in itself create a duty to the whole world to apply
that knowledge in solving its problems.”

Relationship of proximity with the 3rd requirement

Stovin v Wise:
Lord Nicholls: “Proximity is a convenient shorthand for a r/ship b/w 2 parties which makes
it fair and reasonable that one should owe the other a DOC. This is only another way of
saying that when assessing the requirements of fairness and reasonableness regard must be
had to the r/ship of parties.”

Some commentators have rejected the argument that proximity is only a particular way of
looking at policy considerations.

Witting: function of proximity test is to identify those persons most appropriately placed to
take care to avoid damage to P, whom he defines as those whose act or omission most
closely and directly affected P(can be used as definition) … but concedes that policy plays
a role.

 The requirement of proximity will vary based on the kind of damage in question.
Where the D has directly caused physical harm to the Claimant or his property by his
actions, duty will readily be established by showing foreseeability and nothing else. where
a plaintiff suffers physical injury due to the negligence, the courts will assume that there
must have been a proximate relationship which enabled the defendant to inflict injury.
However, when there is economic loss to the plaintiff then the Courts will not assume that
the economic loss in itself is evidence of a proximate relationship and will look for a
 relationship between the parties prior to the infliction of damage. Proximity is given
importance when ecomonic loss is suffered by the C.

So, this seems to suggest that the requirement of a relationship of sufficient proximity is not a
universally applicable one and is used in particular contexts…so much so, that the Courts use it
as a tool for enforcing their own policies…this was admitted by Lord Oliver in Alcock v Chief
Constable of South Yorkshire (1992)...so even in the current procedure there is a certain element
of policy in the second stage…

iii. Fair, Just and Reasonable to impose liability:

Even there is a requisite degree of foreseeability and proximity, a duty may still be denied
if in the court’s view, the imposition of liability would not be fair, just and reasonable.

This is a general repository by virtue of which policy arguments are invoked haphazardly
and in an ad hoc fashion by courts in determining existence of DOC.

This requirement found its origins in the judgement of Lord Keith in Governors of Peabody
v Sir Lindsay and indirectly in the second stage of the Anns test, so one of the good
features of the Anns test was that it clearly recognised that considerations of policy do have
an impact in determining whether or not there is a duty of care

Different considerations of policy:

Floodgates Argument:
the need to keep liability within accepted bounds (control the “floodgates”). the second
requirement of a relationship of proximity reflects this consideration of policy because a
defendant is likely to have a relationship of proximity with a small number of people, as
opposed to having a duty towards people the defendant could reasonably foresee would
suffer loss (which would be a much larger number of people)…
Overburdening the defendant, multiplicity of claims, liability in an indeterminate amount
for an indeterminate time to an indeterminate class—would have detrimental effects on
society as a whole

Overkill Argument:
Imposing duty of care encourage detrimental practice on part of potential Defendants.
Application of the Requirement:

Marc Rich & Co v Bishop Rock Marine [1996]:

Facts: Cs’ cargo had been loaded on D1’s vessel under contract. Mid-voyage, ship put into port
with a crack in her hull. A surveyor employed by D3, a classification society responsible for
checking the safety of ships at sea, inspected the vessel and certified that after some temporary
repairs it should proceed on its voyage. A few days later the ship sank and the cargo worth £6m
was lost. Cs recovered some of that sum from D1, but D1’s liability was limited by statute. Cs
then attempted to recover the balance of the loss from D3. Cs had suffered readily foreseeable
physical damage to property as a result of the society’s negligent inspection of the ship and the
subsequent ‘green light’ the society’s surveyor had given for the ship to carry on with the
voyage.

Held: no DOC. Classification societies are independent, non-profit-making bodies that act in the
public interest to promote the welfare of people and property on the seas. Faced with litigation of
this sort, such societies might act defensively, refusing to carry out urgent or problematic
inspections carrying a high risk of liability. Furthermore, limited resources would be diverted
from the societies’ fundamental work to conduct complex litigation. Therefore it wouldn’t be
fair, just and reasonable to owe a DOC.

White v Jones [1995]:

Facts: D, a solicitor, was instructed by a testator to draw up a new will to replace an earlier one.
Due to D’s negligence, the new will had not been drafted by the time the testator died. Under the
new will, unlike the old one, the testator’s daughters would have been named as beneficiaries.
The testator’s daughters therefore mounted an action in negligence against D alleging that his
negligence had cost them their inheritance.

HOL held by a majority of 3 to 2 that the daughters were owed a DOC. Following considerations
taken into account to justify the creation of a new duty situation:

a. If duty isn’t recognised, the only persons who might have a valid claim (i.e. the testator
and his estate) have suffered no loss, and the only person who has suffered a loss (i.e. the
disappointed beneficiary) has no claim.

b. Importance of legacies in society … right of citizens to leave their assets to whom they
please

c. Importance of role played by solicitors in society … cannot let them get away with it +
reliance of public on professional role of solicitors
Judges have been reluctant since Anns to explicitly recognise or consider policy matters when
determining a duty of care and have expressed concern about this requirement in different cases.

McLoughlin v O’Brian (1983):

Lord Scarman stated that policy issues of when to limit liability did not fall to the judiciary and
was rather a matter of social, economic and financial policy which could not be determined by
the courts (adopted a very conservative approach)

But Lord Edmund-Davies in the same judgement disagreed with him and implied that judges do
take matters of policy into their own hand and apply them in determining whether or not to
extend liability and this is the widely accepted approach (theres no reason for the judges to shy
away from taking policy considerations in to their hands.)

Comparison of W’s 2 stage test and Caparo test:

 Lord W ‘s test started with the presumption of liability in every case where
foreseeability was found unless public policy could negative that liability.
Caparo test starts with a presumption of no DOC and requires policy factors to
be invoked in order to establish DOC.
 Caparo test should not be viewed as a new improved version of 2 stage test.
The 2 stage test invites the courts to disregard previously established
principles. The caparo test on the other hand, adds the crucial qualification
that the law should develop incrementally by analogy with the existing duty
situations so it gives due consideration to precedent.

Concerns about the Caparo Test:

 The three limbs of the test are not watertight compartments but flexible
components. The relationship between them is imprecise rather than
scientific. All of them overlap with each other and are called “facets of the
same thing”
e.g the more foreseeable the harm , the more likely it is for proximity to
exist. Some of the factor which are taken into account for the 3rd
requirement might be equally relevant to establish proximity between the
parties.---uncertainty

 Concepts of proximity and fairness are not susceptible of any such precise
definitions. They are just convenient labels used by the courts to identify
DOC. Lord Roskill called it an artificial test. Everything’s actually decided
based on whats fair, just and reasonable.
  Fair, just and Reasonable Requirement is very similar to the policy stage of
the 2 stage test, so the same criticisms apply to it…discretion to judges.
 These three imprecise concepts are likely to be called in aid less frequently
than might appear. Only become imp in areas where liability for negligence
is disputed. So limited application. Would only be used where law ventures
in to a completely novel area.