Precis (521) Plc v William M Mercer Ltd: CA 15 Feb 2005

Purchasers of a company sought to claim in negligence against the respondent actuaries in respect of a valuation of the company’s pension funds.
Held: There was a paucity of authority as to when a duty of care was assumed. The words used and the subjective view of the information provider were not determinative, but in this case the defendants could not be taken to have assumed responsibility to the claimants.
Arden LJ said: ‘it is now well established that in finding the true meaning of the exchanges between the parties the court will apply not the dictionary meaning of the words used but the meaning which the parties may reasonably be supposed to have given those words in context’, and there was no list of guiding principles to help the court determine when an assumption of responsibility can be said to arise: ‘The courts have, therefore, to look at all the relevant circumstances and (following their approach to the duty of care generally . .) determine whether the circumstances fall within the situations in which an assumption of liability has previously been held to exist or whether the circumstances are closely analogous to and consistent with the situations in which liability has been imposed in previous cases.’


Lord Justice Laws, Lord Justice Kennedy Lady Justice Arden


[2005] EWCA Civ 114, Times 24-Feb-2005, [2005] PNLR 511




England and Wales


CitedHedley Byrne and Co Ltd v Heller and Partners Ltd HL 28-May-1963
Banker’s Liability for Negligent Reference
The appellants were advertising agents. They were liable themselves for advertising space taken for a client, and had sought a financial reference from the defendant bankers to the client. The reference was negligent, but the bankers denied any . .
CitedCandler v Crane Christmas and Co CA 15-Dec-1950
Though the accounts of the company in which the plaintiff had invested had been carelessly prepared and gave a wholly misleading picture of the state of the company, the plaintiff could not recover damages. A false statement, carelessly, as . .
CitedWilliams and Another v Natural Life Health Foods Ltd and Another HL 30-Apr-1998
A company director was not personally reliable in negligence for bad advice given by him as director unless it could clearly be shown that he had willingly accepted such personal responsibility. A special relationship involving an assumption of . .
CitedCaparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .
CitedMidland Bank Trust Co Ltd v Hett Stubbs and Kemp (a firm) ChD 1978
A solicitor had failed to register an option as a land charge over property. The court was asked what steps should have been taken by a solicitor in the conduct of a claim: ‘Mr Harman [leading counsel for the plaintiff] sought to rely upon the fact . .
CitedInvestors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
CitedHenderson v Merrett Syndicates Ltd HL 25-Jul-1994
Lloyds Agents Owe Care Duty to Member; no Contract
Managing agents conducted the financial affairs of the Lloyds Names belonging to the syndicates under their charge. It was alleged that they managed these affairs with a lack of due careleading to enormous losses.
Held: The assumption of . .
CitedLeigh and Sillavan Ltd v Aliakmon Shipping Co Ltd (The Aliakmon) HL 24-Apr-1985
The plaintiff contracted to buy a cargo to be shipped on the defendant’s vessel. Because of poor stowage, the cargo was damaged. At the time of the damage the claimant was neither the owner nor possessor of the cargo, but under the terms of the . .
CitedBank of Credit and Commerce International (Overseas) Limited (In Liquidation); BCCI Holdings (Luxembourg) SA (In Liquidation); Bank of Credit and Commerce International SA (In Liquidation) v Price Waterhouse CA 13-Feb-1998
The special relationship between an auditor and a bank, meant that a duty of care could extend even to a second bank with its own auditors. In determining whether there had been an assumption of responsibility, the the relevant factors would include . .
CitedPacific Associates v Baxter CA 1990
A clause excluding responsibility of one party to a third party should be taken into account where the contract in question was the basis for the creation of the duty of care. . .
CitedAssicurazioni Generali Spa v Arab Insurance Group (BSC) CA 13-Nov-2002
Rehearing/Review – Little Difference on Appeal
The appellant asked the Court to reverse a decision on the facts reached in the lower court.
Held: The appeal failed (Majority decision). The court’s approach should be the same whether the case was dealt with as a rehearing or as a review. . .

Cited by:

CitedPatchett and Another v Swimming Pool and Allied Trades Association Ltd CA 15-Jul-2009
The claimant suffered damages when the contractor he engaged to construct his swimming pool went into liquidation. Before employing him, he had consulted the defendant’s web-site which suggested that its members were checked for solvency on becoming . .
Lists of cited by and citing cases may be incomplete.

Professional Negligence

Updated: 29 June 2022; Ref: scu.222698