Caparo Industries Plc v Dickman [1990]

Facts

  • Caparo, a small investor purchased shares in a company, relying on the accounts prepared by Dickman
  • Caparo lost money due to the accounts being negligently prepared

Issue

  • Could Dickman be liable to Caparo for their negligent preparation of relied upon company accounts; given there was no contractual relationship between the two parties

Decision

  • No liability under a test of duty, ‘the Caparo test’, claim failed

Reasoning

  • The Caparo test – foreseeability, buy xanax in the uk proximity and ‘fair, just and reasonable’ was failed due to a lack of proximity
  • Allowing claim would allow¬†“liability in an indeterminate amount for an indeterminate time to an indeterminate class”
  • In claims for economic loss, there must be a common purpose, a proximate relationship, known communication with expected reliance and actual reliance. There was no proximity as the defendant’s knew nothing about Caparo

Citation

[1990] UKHL 2

RELATED CASE  Weld-Blundell v Stephens [1920]

Posted in Tort Law Revision Notes.

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