Hedley Byrne & Co Ltd v Heller & Partners Ltd
[1964] AC 465
Independent editorial summary โ not the official judgment. Read the full judgment via the source link.
Ratio Decidendi
A duty of care can arise in respect of negligent misstatements causing pure economic loss where there is a 'special relationship' between the parties โ that is, the defendant assumed responsibility for the accuracy of the statement and the claimant reasonably relied on it.
Facts
Hedley Byrne, an advertising agency, asked their bankers to obtain a credit reference on Easipower Ltd from Easipower's bankers, Heller & Partners. Heller gave a favourable reference but added a disclaimer. Easipower went into liquidation and Hedley Byrne suffered financial loss.
Judgment Summary
The House of Lords held that in principle a duty of care could arise for negligent misstatements causing economic loss where there was a special relationship. However, Heller's disclaimer was effective and they were not liable on the facts. The case established the principle of liability for negligent misstatement.
Key Quotes
"Where there is a relationship equivalent to contract, there is a duty of care. The respondents assumed responsibility for their reply and the appellants relied upon it."
โ Lord Morris
"If someone possessed of a special skill undertakes to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise."
โ Lord Morris
Subsequent Treatment
Foundational authority on negligent misstatement liability. Developed by Caparo v Dickman [1990] and applied in Henderson v Merrett Syndicates [1995].
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