Brief : 106924 Delivery Date : 15/12/2005 Title: LAW: Tortious Liability and Negligence - ENGLISH LAW - (1st Year LLB Law Uni Degree standard) QUESTION Lucky B'Stard wins Â£7,843,000 on the National Lottery. He decides to invest Â£5,000,000 and, in his words, to "Spend, spend, spend" the balance. He solicits the services of Whizzkid, a financial advisor, who has just returned from a three year "get away from it all" stay in a Tibetan monastery. Imbued with Buddhist ideals, Whizzkid decides that, for the foreseeable future, he is not going to charge for any financial advice. On his first day back in the office, Whizzkid advises Lucky to invest Â£2,000,000 in a newly floated e-company. When Whizzkid left for Tibet, shares in e-companies were increasing in value at a phenomenal rate but, about two years ago, there was a sudden downturn in their value and many such companies went into liquidation. Whilst in Tibet, Whizzkid heard nothing of the financial markets. Within six months Lucky's shares are worth only Â£7,500. He loses a further Â£1,500,000 after following the financial tips of Hari Potta, an Indian mystic, who has set up an internet webpage in which investment advice is offered. Chastened by these experiences and somewhat tired of the extravagant lifestyle that he has adopted , Lucky decides to spend Â£1,000,000 on promoting a charity extravaganza to raise money for Aids' victims in the third world. The highlight of the charity event is an attempt by Dan Dangerous to set a new world record for ascending into the air, attached only to helium-filled toy balloons. (The current record stands at 11,000 feet). Dan attaches himself to six hundred balloons and the ascent is going to plan when the cord is severed by a passing jet. The shock of the proximity of the jet causes Dan to pass out and he is unable to activate his parachute and plunges to his death in front of the watching thousands. Dan's former girlfriend, Minnie, who is pregnant, is present and the shock causes her to miscarry. Prodnose, who was in the vicinity of the event, wondered why there was such a large crowd and saw it all through a pair of very powerful binoculars. He suffers a nervous breakdown as does Sam, a fireman, who was on duty at the extravaganza and who was part of a team which tried unsuccessfully to break Dan's fall by holding a tautly stretched fire blanket directly below him as he fell. Having watched the fall on live television, Beryl, Dan's mother, is traumatised. Julius, Dan's father hears the news on his car radio and rushes to the scene and formally identifies Dan's body. Lucky admits that he was negligent in that he failed to check whether the site of the extravaganza was on any flight paths and he pays compensation to Dan's estate. Advise Lucky as to any redress he may have against Whizzkid and Hari Potta and as to his liability in respect of Minnie, Prodnose, Sam, Beryl and Julius. Assessment Criteria In arriving at an assessment particular attention will be paid to the following: i) the student's ability to identify the relevant legal principles ii) the appropriateness of legal authorities iii) application of the law to the facts iv) the clarity and cogency of argument ADVICE For the sake of clarity and brevity, after a breakdown of the applicable legal framework the individual issues in this colourful scenario will be isolated and considered in turn. The brief under analysis concerns, inter alia, tort law and specifically the law of negligence. Lucky Bâ€™Stard can be advised that in order to ground an action in negligence five essential conditions must be satisfied on the balance of probability. First, it is necessary to establish that the claimant is owed a legally recognised duty of care by the defendant. Lord Atkins defined the range of the duty of care in negligence in Donoghue v Stephenson. He stated: "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 affected when I am directing my mind to the acts or omissions which are called in question." Second, we must establish a breach of that specified duty. In Blyth v Birmingham Waterworks it was stated that: â€œNegligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. The defendants might have been liable for negligence, if, unintentionally, they omitted to do that which a reasonable person would have done, or did that which a person taking reasonable precautions would not have done.â€ A calculus of risk analysis can taken employed regarding the possibility of breach of duty in Luckyâ€™s case. This approach weighs the risk or harm (Bolton v Stone) and probable severity of harm (Paris v Stepney Borough Council) that may be suffered against the cost of precautions (Latimer v AEC) and any other factors that might operate to excuse the risk taken (Watt v Hertfordshire County Council). Third, loss or damage must be shown to have been suffered. Fourth, the damage suffered must be sustained as a direct, causal result of the breach identified: Barnett v Chelsea and Kensington Hospital Management Committee sets down useful guidance on this issue. Finally it must be shown that the damage stipulated above was reasonably foreseeable in all the circumstances of the case - ie. not excluded on grounds of being too remote. It should be noted that all the above points must be satisfied before Lucky Bâ€™Stard can be advised that he has a good case for compensation. Each of the parties will be dealt with separately and in turn. Advice re Whizzkid It is necessary to apply the facts to the five-point framework discussed above in order to deliver reliable advice to Lucky as to his dealings with Whizzkid. Moreover, where a negligent statement causes pure financial loss such as in this case an additional legal framework applies. In Hedley Byrne v. Heller the House of Lords recognised the existence of liability for pure economic loss arising from a negligent statement. The court, developed a test for reasonable foreseeability of harm. Lord Reid stated that such liability would only arise where there was a â€œspecial relationshipâ€ between the parties. He explained that a special relationship would exist: â€œwhere it is plain that the party seeking the information or advice was trusting the other to exercise such a degree of care as the circumstances required, where it was reasonable for him to do that, and where the other gave the information or advice when he knew or ought to have known that the enquirer was relying on him.â€ Lucky has attended Whizzkidâ€™s office and it is reasonable for him to seek financial advice in that formal professional context. Furthermore, Lucky cannot be expected to know of Whizzkidâ€™s recent history and his lack of knowledge of current investment strategy. Given the amount of money involved it is plain that Whizzkid should have appreciated the seriousness of the situation and taken more care over his advice. It is therefore submitted that a special relationship exists and that liability is owed to Lucky. Advice re Hari Potta This situation is slightly different, given that this so-called Indian mystic has set up an internet webpage on which investment advice is offered generally and to the world at large. Hedley Byrne was applicable re Whizzkid because Whizzkid was offering specific and individual advice, however in the case of Hari Potta, the case of Caparo Industries v Dickman is of more relevance. In Caparo, information was put into general circulation and was capable of being relied on by strangers, just as in Hari Pottaâ€™s case. The court held that in these circumstances no general duty of care would be owed unless the defendant had particular knowledge of the reliance on and use of the information by the injured party. Unless Hari Potta has the aforementioned knowledge it is unlikely that Lucky has a claim against him. Advice re Minnie Lucky has admitted liability for negligence in causing Danâ€™s death. Minnie has suffered nervous shock and a miscarriage as a result of witnessing the incident. In so-called nervous shock cases it is necessary to distinguish between primary shock victims, who also sustain physical injury or are in some other way directly involved in the accident and secondary shock victims, who are affected either as a consequence of witnessing the accident or out of concern for the safety of another: Alcock et al v Chief Constable of South Yorkshire Police. It is advised that Minnie will be considered a secondary victim on the facts. Mindful of the risk of a flood of claims from this class of potential litigant the courts have imposed rigorous criteria to be met before the existence of a duty of care to prevent psychiatric injury will be acknowledged. In Alcock et al v Chief Constable of South Yorkshire Police, which resulted from the Hillsborough football ground disaster, the House of Lords held that a wrongdoer will owe a duty of care to a secondary victim only if: (a) there is a tie of love and affection between the secondary victim and the primary victim; (b) the secondary victim was present at the accident or in its immediate aftermath; (c) nervous shock was suffered as a consequence of the secondary victimâ€™s perception of the accident with his own unaided senses (that is he personally heard or saw the accident). It is submitted that Minnie fulfils the above criteria and that she will be able to claim for the trauma of the incident. However the so-called egg-shell skull rule is unlikely to be deemed applicable in this context and therefore the miscarriage that she has suffered as a consequence of her state of pregnancy may not be claimable. Advice re Prodnose Prodnose suffered a nervous breakdown after witnessing the event through a pair of powerful binoculars. He will be considered a secondary victim (see above). It is clear that he does not fulfil the Alcock criteria set out above (because inter alia, there is no apparent tie of love and affection) and thus he will be unable to claim against Lucky. Advice re Sam Sam, a fireman, who was on duty at the event tried unsuccessfully to break Dan's fall by holding a tautly stretched fire blanket directly below him as he fell. He suffered a nervous breakdown as a consequence, but will be classed as a rescuer. Alcock provides that the strict 3-point secondary victim test described above does not apply to those participating in a rescue operation connected to the accident. A duty of care is owed to those attempting a rescue merely if it is reasonably foreseeable that nervous shock could be suffered as a result of witnessing the aftermath of the accident. It is submitted this will be easy on the facts! Sam can almost certainly recover damages. Advice re Beryl and Julius On the facts, Julius does not appear to have suffered specified shock or trauma and therefore does not have a claim because he cannot point to specific injury or loss. If he has suffered injury then he may have a claim on the Alcock criteria, given his presence in the immediate aftermath of the incident. Beryl, Danâ€™s mother, was traumatised by watching the incident on live television. Alcock provided that parents and spouses who only saw an incident by viewing it on a simultaneous television broadcast were not entitled to damages and thus it is unlikely that Beryl has a claim. However, she may have a chance to avoid Alcock by distinguishing it on the basis that TV coverage of the aftermath of the football disaster - which involved bodies being laid on the pitch - while tragic and upsetting arguably lacks the real horror and immediate visceral threat of seeing a man plummeting to his death in real time. THE END WORD COUNT: 2118 (this is a global document word count including the long question etc and thus does not represent an overrun) BIBLIOGRAPHY Rogers W.V.H., Winfield and Jolowicz on Tort, (2002) Sweet & Maxwell Keenan D., Smith and Keenanâ€™s English Law, (1998) Pitman Publishing Keenan, D. and Riches S., Business Law, Seventh Ed, (2001) Longman Stephenson G., Sourcebook on Torts, (2000) Cavendish Publishing Kelly D. and Holmes A., Principles of Business Law, (1997) Cavendish Publishing 1
Footnotes  (1932) AC 562.  See for context: Keenan, D. and Riches S., Business Law, Seventh Ed, (2001) Longman.  (1856) 1 Ex 781.   AC 850.   AC 367.   AC 643.   1 WLR 835.   1 QB 428.   2 All E.R. 575.   2 AC 605.   4 All ER 907.