LA2001 Tort law

Pre-exam update 2022

The current edition of the module guide was published in 2021.

The following developments should be noted.

CHAPTER 6: PURE ECONOMIC LOSS AND NEGLIGENT

STATEMENTS
6.4 Economic loss cases (iii): performance of a service
Kahn v Meadows [2021] UKSC 21 and Manchester Building Society v Grant Thornton
[2021] UKSC 20
Although the former was a medical case and the latter concerned auditors’ liability, they
were intended to be read together because they both addressed the key question of the
scope of liability and the consequential impact on damages. The claimants were a small
building society that inquired of the defendant accounting firm which style of accounting
could be used, for strategic business purposes, in preparing its accounts. The defendants
gave an answer that was incorrect and correcting the effects of the error cost the claimants
over £32 million.
A seven-strong Supreme Court unanimously upheld the first-instance decision (reversing
that of the Court of Appeal), although damages were reduced on the grounds of 50 per
cent contributory negligence. It played down the practical importance of any distinction
between the giving of advice or information; this is a wide and fluid spectrum. According to
Lord Hodge and Lord Sales, ‘In the case of negligent advice given by a professional
adviser one looks to see what risk the duty was supposed to guard against and then looks
to see whether the loss suffered represented the fruition of that risk’.
Kahn and Manchester provided guideline questions for future courts to assist in the
application of the basic principle laid down in the key case of South Australia Asset
Management Corp v York Montague [1996] 43 All ER 365 (SAAMCO).
The guidelines are as follows:

1. Is the harm (loss, injury and damage), which is the subject matter of the claim,
actionable in negligence?
2. What are the risks of harm to the claimant against which the law imposes on the
defendant a duty to take care?
3. Did the defendant breach their duty by their act or omission?
4. Is the loss for which the claimant seeks damages the consequence of the defendant’s
act or omission?

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LA2001 Tort law pre-exam update 2022

5. Is there a sufficient nexus between a particular element of the harm for which the
claimant seeks damages and the subject matter of the defendant's duty of care as
analysed at stage 2 above?
6. Is a particular element of the harm for which the claimant seeks damages
irrecoverable because it is too remote, or because there is a different effective cause
or because the claimant has mitigated their loss or has failed to avoid loss which they
could reasonably have been expected to avoid?

CHAPTER 11: DEFENCES TO NEGLIGENCE

11.3 Ex turpi causa non oritur actio (illegality)
Henderson v Dorset Healthcare University NHS Foundation Trust [2020] UKSC 43
The claimant had been found guilty of the manslaughter of her mother on the grounds of
diminished responsibility. She was suffering from a severe form of mental illness and
therefore was sentenced to detention on a mental health facility. She brought a negligence
action against the health authority, which had been caring for her for a number of years, on
the grounds that their failures had led to her crime. The health authority claimed that her
action was defeated by the defence of illegality.
The Supreme Court upheld the findings of the lower courts that, in accordance with Clunis
v Camden and Islington Heath Authority and Gray v Thames Trains, the defence of illegality
would apply and thereby her action could not proceed. Henderson was referred to the
Supreme Court because it had been argued that the important case of Patel v Mirza
fundamentally changed the law on illegality, meaning that Clunis would be overruled and
Gray would necessarily be departed from. The Court carefully considered Patel and held
that the policy reasoning for the decision in Gray matched those in Patel and therefore the
given that the cases were consistent; the defence of illegality would apply. Further, the
claimant’s lack of personal responsibility for her act, due to mental illness, did not negate
the applicability of the defence.

CHAPTER 15: DEFECTIVE PREMISES: OCCUPIERS’ LIABILITY

15.2.4 The nature of the duty
White Lion Hotel v James [2021] EWCA Civ 31
A hotel guest had attended a wedding where he had consumed alcohol. In the early hours
of the night he sat on the sill of his hotel room’s open window, which was lower than
regulation height and had a faulty sash. He fell nine metres to the ground and died from his
injuries. The court of first instance found that had been no formal risk assessment by the
defendants and the cost of preventative measures would have been negligible; window
restrictors for the window would have cost £6 or £7. A breach of the common duty of care
under the 1957 Occupiers’ Liability Act was found but with 60 per cent contributory
negligence.
This was confirmed by the Court of Appeal. The judgment provides a helpful illustration of
the way courts apply the provisions of the 1957 Act, emphasising that occupiers’ liability
cases tend to be very fact-specific and that there is a range of factors that must be balanced
by the courts. The cases of Tomlinson v Congleton BC and Edwards v Sutton LBC were
applied. The judge considered the defence of volenti but concluded that the claimant could
not be expected to have foreseen a danger that the occupiers themselves had not foreseen.

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