The Duty of Care in the Tort of Negligence

The issue is to determine whether Martin had a duty of care towards Simon.

The tort of negligence depends majorly upon the fact that whether there is an existence of duty of care by the defendant towards the claimant. Recognising one’s legal duty of care is an obligation on the part of the defendant who must adhere to the reasonable standard of care for avoiding any possible injury to the claimant as held in Donoghue v Stevenson [1932] UKHL 100. In the case of Perre v Apand [1991] HCA 36, the High Court of Australia laid down that it deviates from its British counterpart and strives to determine that the case in question whether fits within the established category of duty of care. A person holds a duty of care for another who has some kind of responsibility towards such person and the person having the duty of care must be held liable for negligence (Luntz 2017).

Here, Simon opted for a financial advice involving a substantial transaction of money from Martin who was under the legal obligation and duty of care to provide the correct information to Simon. Being an Investment expert, it was Martin’s duty to provide accurate advice to his client, for he shared an expert-client relationship with Simon, and this relationship of trust creates a duty of care between them.

The issue is to determine whether Martin breached the duty of Care that he had towards Simon.

The determination of a breach of duty of care would be ascertained on the basis of the evaluation of the standard of care which can be assumed in a particular circumstance. The standard of care can be determined by assuming the course of action that a reasonable person would take in the same situation. When there is an unreasonable action by the defendant which failed to attain the usual standard of care, a breach of duty of care is said to have taken place (Spamann 2016).  The breach of duty of care is the base to establish the next element of the tort of negligence which is the damage.

In this case, Simon trusted in Martin for investing substantial amount of money for Martin being an expert in the field of investment, which put a duty of care on him towards Simon. Martin insisted Simon to invest in shares that did not work well, for there would have been lack of judgement pertaining to the type of share, on his part. He should have been extremely certain about the shares which he advised Simon to invest in. However, the wrong analysis about the investment clearly leads to the breach of duty on Martin’s part. The negligent misstatement made by Martin in respect of the investments of Simon leads to the breach of duty of care.

Breach of Duty of Care in Investment Misadvisement

The issue is to determine whether the breach of duty caused any damage to Simon.

It is needed to be proved that the breach of duty caused by tortfeasor has led to claimant’s loss. This is known as the causation of damage where it is important to prove that the particular breach of duty by the tortfeasor has resulted to the specific loss of Claimant, and nothing else is responsible for it as discussed in the case of Barnett v Chelsea and Kensington Management Committee [1956] AC 613. The ‘But for’ test as discussed in Cork v Kirby MacLean Ltd [1952] 2 All ER 402 best describes the connection between the wrongful act of the tortfeasor and the damage caused to the claimant. Here, the rule was immaculately explained by the help of a sentence: “if the damage would not have happened but for a particular fault, then the fault is the cause of the damage”

In this case Simon trusted on Martin’s expertise in the field of investment, but his hopes, along with his invested money drowned. On investing a total sum of $950,000 Simon only got back $475000 which is a huge financial loss for Simon which is mostly due to the wrong advice of Martin. It is clear that the breach of duty of care by Martin has lead to the loss suffered by Simon, for Martin being an investment expert had the duty of care to provide Simon with accurate information.

Therefore, it can be concluded that the breach of duty by Martin has cost serious injury to Simon

Under the tort of negligence, the House of Lords of England and that about from the duty of care and the breach of such duty, the factors of foreseeability and proximity  between the parties is important to determine the degree of negligence of the defendant towards the claimant. It was held that the damage cost to the claimant by the defendant should not be so remote that it was not possible for the defendant to foresee and understand it. To determine whether the injury was foreseeable by the defendant the factor of the proximity of relationship between the defendant and the claimant must be evaluated as well. Only when the parties are in close proximity, there is a higher chance of foreseeing the possible injury by the defendant (Worth 2017).

In this case Simon employed Martin for investing his money on certain companies. Simon trusted Martin with a substantial amount of money which gives a clear picture of the close proximity between them. This close proximity between Simon and Martin helps to ascertain that there was a scope to foresee the damage that is caused to Simon due to the negligent misstatement laid down by Martin.

Causation of Damage and Foreseeability

The issue is to determine whether Simon himself could voluntarily assume the risk of injury.

Under the common law of tort one cannot be held liable responsible for the injuries which a person has sustained understanding the gravity of damage that can cost to him. This is referred to as voluntary assumption of risk which acts as a defence to the tort of negligence. In addition the defendant may also cite the defence of contributory negligence which refers to the contribution of the claimant for the same injury for which he is suing the defendant (Goudkamp and Murphy 2015). These are the different defences against the charge of negligence which the defendants resort to.

Martin can present an argument on the fact that investment in Share and Stock market is subject to financial risk. Therefore, he can establish the fact that Simon had the scope to voluntarily assume the risk of loss in investment.

Therefore, it can be held that Simon could be held liable for contributory negligence and voluntary assumption of risk of injury.

The issue is to determine whether Simon had contribution to the negligence resulting to the loss that he suffered.

The rule of contributory negligence states that the claimant who claims damages from the tortfeasor has a share of his own negligence that resulted to the loss. The claimant has contributed to the negligence of the tortfeasor, which has aggravated the margin of loss or injury. The burden of proof to establish the presence of contributory negligence lies on the tortfeasor which either eliminates or reduces the defendant/ tortfeasor’s liability to pay damages to the claimant as held in Pennington v Norris [1956] HCA 26.

In this case Simon had insisted on investing on two companies, the ones he studied about for several months. He wanted to invest in these two companies along with the three others which were suggested by Martin. However, if Martin had not confirmed and suggested Simon to invest on them, Simon would have refrained himself from investing, for he would have trusted Martin for his expert opinion. Therefore Martin cannot defend himself by stating that Simon had brought the trouble upon himself by investing in those two companies. It cannot be established that Simon had contributed the negligence of Martin, pertaining to the wrong confirmation of the companies in which Simon wanted to invest initially.

Therefore, it can be concluded that Simon had no contribution to the negligence that result to the loss that he suffered due to Martin’s breach of duty of care.

Reference

Barnett v Chelsea and Kensington Management Committee [1956] AC 613

Cork v Kirby MacLean Ltd [1952] 2 All ER 402

Donoghue v Stevenson [1932] UKHL 100

Goudkamp, J. and Murphy, J., 2015. The failure of universal theories of tort law. Legal Theory, 21(2), pp.47-85.

Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G. and Harder, S., 2017. Torts: cases and commentary. LexisNexis Butterworths.

Pennington v Norris [1956] HCA 26.

Perre v Apand [1991] HCA 36

Spamann, H., 2016. Monetary Liability for Breach of the Duty of Care?. Journal of Legal Analysis, 8(2), pp.337-373.

Worth, G., 2017. Reasonable foreseeability: When does it not mean’reasonable foreseeability’?. Precedent (Sydney, NSW), (138), p.9.