For these reasons, and for the reasons in regard to negligence given bymy noble and learned friends. Such an investigation, he found, would have shown that Mr.Spring had not acted dishonestly. The latterwriter is of the opinion, citing Horrocks v. Lowe [1975] A.C. 135, thatLawton 'involves an extension of the law of negligence which flies in. It is true that recognition of a duty of care to an employee in casessuch as the present, based on the Hedley Byrne principle, may have someinhibiting effect on the manner in which references are expressed, in the sensethat it may discourage employers from expressing views such as those whichare encouraged by rule 3.5(2) of the Lautro Rules. They remain distinct torts. The views expressed in these three cases decided in a jurisdictionwhich is well known to be tender in its approach to claims in negligenceinvolving pure economic loss are of great importance. Where the reference is required by a prospectiveemployer, the loss will frequently result from a failure to obtain thatemployment. However, notwithstanding the truth of the alleged libel theplaintiff succeeded in its action against the Ministry of Agriculture andFisheries on an alternative claim for negligence because of the Ministry'sfailure to disclose all the results of trials which it had conducted and becausethe Ministry had published its findings in an unreasonable and unfair manner.The Court of Appeal allowed the appeal and decided that the Ministry was notliable. Spring was a sales director and office manager who was dismissed when Guardian Assurance took over the company he worked for. I would say that public policy ought not tohe invoked if the arguments are evenly balanced: in such a situation theordinary rule of law. The proximity would becloser to that in Hedley Byrne, if the reference had been given by a purelysocial acquaintance at the request of the subject of the reference. In this case, C sought to start working for another company. In fact, all of the cases cited by the respondents as standing for the proposition that defamation had 'cornered the market' on reputation damages were cases in which (unlike here) there was no pre-existing relationship between the parties that gave rise to a duty of care. 635-636: "The damage which may be occasioned by the spoken orwritten word is not inherent. Nor is it necessary, on my view of the outcome of this appeal,to make any distinction between the different relations which Mr. Spring hadwith the different respondents since all the respondents at the material timewere part of a single group of companies and can be regarded as acting onbehalf of each other. Theplaintiff, he points out, must prove that had Scottish Amicable receiveda reference which was not a negligent misstatement but one preparedwith all reasonable care, then, on the facts of the case, they wouldhave employed him. 838 to be "that it is to thegeneral interest of society that correct information should be obtained as to thecharacter of persons in whom others have an interest. Contains public sector information licensed under the Open Government Licence v3.0. To this end, as Lord Diplock stressed in Horrocks v. Lowe [1975]A.C. 135. Use the link below to share a full-text version of this article with your friends and colleagues. To assess the validity of the argument entails not the resolution ofa point of law but a balancing of moral and practical arguments. You can filter on reading intentions from the list, as well as view them within your profile.. Read the guide × Spring v Guardian Assurance plc (1994) Facts: Written reference given by defendant to Mr Spring’s prospective employer. First of all.reference is made to the description of the policy underlying the defence ofqualified privilege given by Lord Diplock in Horrocks v. Lowe [1975] A.C.133. The defendants' second argument (which in order that it may prevail,must be made to stand independently on its own feet) is that, even if oneconcedes foreseeability and proximity and even if it would otherwise be justand reasonable for the plaintiff to recover under the head of negligence, publicpolicy dictates that the person who has been the subject of a negligentmisstatement shall not recover. In our opinion, to accept it would be to introducenegligence law into a field for which it was not designed and is notappropriate." "(ii). In all thecircumstances, I do not think that we may fear too many ill effects from therecognition of the duty. These cases involvedactions for negligence against fire-loss investigators, whose reports to theinsurers had resulted in the rejection of claims by the plaintiffs whosepremises were damaged by fire. Inthe present case that is the position. Spring v Guardian Assurance plc [1994] UKHL 7. While this is a gross over-. The prospect of such loss is considerably increased if thereference relates to an applicant, like Mr. Spring, for a position as a companyrepresentative in an industry which is subject to a rule which is in equivalentterms to rule 3.5 of the Lautro Rules. Nor: "Is it the law that the giver of such areference is never subject to such a duty of care?". "It was argued for the appellant, inter alia, that neitherdefamation nor slander of goods requires a background duty or breach;and if injury does or may involve those separate elements, there is noground for depriving the plaintiff of a separate cause of action. Even if one should putthe matter in a more neutral way. Spring v Guardian Assurance Plc and Others: HL 7 Jul 1994 The plaintiff, who worked in financial services, complained of the terms of the reference given by his former employer. ", I have to consider whether these rules militate against a duty of care owed byGuardian Assurance to the appellant in the present case. ([1993] 2 All E.R. 282. 194Dr. Douglas Harvey Barber v Guardian Royal Exchange Assurance Group. Mr. Siderfin did not get on with Mr. Spring, and on 26 July 1989. he dismissed him without explanation. This is a point madeforcefully by Lord Bridge of Harwich in Scally and Others v. Southern Healthand Social Services Board and Another [1992] 1 A.C. 294. at p. 302-304.Furthermore, in the employment field, there has always been a considerableoverlap between claims based on an alleged breach of duty in contract and intort, as is stated in Charlesworth and Percy on Negligence (8th ed.. para. Scottish Amicable naturally declined to appoint Mr. Spring as one ofits company representatives. The importance of the case arises, however, because of certainbroad statements of principle which Sir Robin Cooke P. made in giving thejudgment of the court which were followed by the Court of Appeal in thiscase. Because of the reference, which I have heldconstitutes a negligent misstatement, not only Scottish Amicable butIrish Life and National Financial Management refused to employ theplaintiff. [1941] 1 All E.R. In the present case, however. The reference asked for by Scottish Amicable and given by GuardianAssurance was written by a Mrs. Lee-Moore as an employee of GreAssurance. Thejudge further found that "the prime criterion by which the plaintiff's integrityand ethical standards would be judged would patently be the professional codeof conduct set out in schedule 2 of the Lautro Rules." In these circumstances it is, I consider, necessary to approach thequestion as a matter of principle. Lord Oliver of Aylmerton added, at pp. 273). In the later cases of South Pacific Manufacturing Co. Ltd. v. NewZealand Security Consultants & Investigations Ltd. and Mortensen v. Laing[1992] 2 N.Z.L.R. There a claim was made against a company for damages arisingfrom negligent advice gratuitously supplied by the company to the plaintiff inrespect of a particular investment. Because of the closeness of therelationship between master and servant, as well as its very nature,there really can be no doubt today that a duty of care does arise underthe law of tort, as expressed in Donoghue v. Stevenson [1932] A.C.562. List: Labour Law Section: Duty of care Next: DAVIDSON v. GUARDIAN ROYAL EXCHANGE ASSURANCE [1979] 1 Lloyd's Rep. 406 SCOTLANDINNER HOUSESECOND DIVISION OF THE COURTOF SESSION Before Lord … Spring had no contract with either of the two Guardian companies, thefirst and fourth defendants, though when Corinium in 1988 became anappointed representative of Guardian Assurance for the purpose of theFinancial Services Act 1986, the plaintiff as a self-employed representative ofCorinium (as the judge found) became a company representative of GuardianAssurance, selling exclusively the insurance contracts of Guardian Assurance.The appellant in the Court of Appeal contended that the judge was wrong tohold that there was no contract between him and Guardian Assurance. The trial judge held that the claimin defamation failed because it had been proved that Maxicrop was indeeduseless, thus establishing the defence of justification, but he sustained theclaim in negligence against the Ministry, on the ground that it owed theplaintiffs a duty to inform the plaintiffs of the results of certain trials of theproduct before publishing and to consult them about the presentation of theresults. Tothe extent that the report reflects adversely on the insured bysuggesting that he may have been guilty of arson the insured willprima facie have a cause of action in defamation. It is also necessary toestablish that in all the circumstances it is fair, just and reasonable for a dutyto be imposed in respect of the economic loss. His employer whose company he was planning to leave found out he was to join a rival firm and he was dismissed. I understandchat a majority of your Lordships are minded to allow the appeal in any event.proceeding upon a broader basis than the principle in Hedley Byrne. In hisspeech (with which Lord Hodson agreed) Lord Morris of Borth-y-Gestexpressed himself as follows (at pp. Thisappeal is not concerned with a claim for mere loss of reputation. . If he uses the occasion for some other reasonhe loses the protection of the privilege.". While therequest may or may not be sufficient to create the required proximity it canstill be distinguished from the present class of case. I do not for my part consider that to recognise the existence of a dutyof care in some situations when a reference is given necessarily means that thelaw of defamation has to be changed or that a substantial section of the lawrelating to defamation and malicious falsehood is "emasculated" (Court ofAppeal [1993] 2 All E.R. All the arguments for the appellant,though put skilfully in various ways by counsel, reduce to thatproposition. It is also an area where a case-by-case approach is particularlyappropriate and so as happened in Hedley Byrne it appears to me desirable forthe courts to provide the remedy which I believe is clearly required. was anything said about the principle established in regard to defamation. I can wellunderstand why the President should have made the comment that he did aboutthe case which was before him where there was publication on television, butin the case of a reference there is unlikely to be other than limited publication.If there is any re-publication this is unlikely to give rise to an action fornegligence since the recipient of the reference will neither owe a duty of careto the subject of the reference or. 1 Barber v. Guardian Royal Exchange Assurance Group, Case 262/ 88, [1990] IRLR 240 1) Reference Details Jurisdiction: European Court of Justice It is also in accord with public policy that they should not bebased upon careless investigations. In case of any confusion, feel free to reach out to us.Leave your message here. My Lords, for these reasons I would affirm the decision of the Courtof Appeal on the issue of negligence. That may not be fatal. In cases where the employee discovers the existence ofthe inaccurate reference, he will have a remedy if, but only if, he canestablish, instead of malice, that the reason for the inaccuracy is the defaultof the employer, in the sense that he has been careless. In my opinion the learned judge was entitledto find, as he did. v.Dickman (supra) where the question was whether the auditors of a companyowed a duty of care towards intending purchasers of shares in a company. Shareable Link. It was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index.. History. No doubt because of the facts of the case there under consideration, thecase has been widely regarded as concerned with liability in damages inrespect of a negligent misstatement. The trialjudge further found in relation to the reference that Mrs. Lee-Moore hadaccurately stated what she had learnt from her sources of information and thatshe was not guilty either of malice or of negligence. It is for the protection of the public. Some argue,for instance, for greater media freedom or licence; statutory changeshave been recommended but not enacted. An action fornegligence is based on the lack of care of the author of the reference. So far as concerns other matters which have been discussed, includingin particular the defendants' liability in contract, I will be content, havingregard to my conclusion on the negligence issue, to remind myself of thefelicitous reference to obiter dicta and the proverbial chickens of destiny madeby Bowen L.J. The employer is possessed of special knowledge, derived fromhis experience of the employee's character, skill and diligence in theperformance of his duties while working for the employer. Whether one applied an incremental approach or a policyapproach, there was no acceptable basis for recognising such a duty.". He accordingly sued for malicious falsehood, breach of contract and negligence. [1941] 2 All E.R. I do not thinkthat Article 10, a paramount and proper guardian of free speech, was intendedto shield a negligent defendant in an action based on negligence any more thanit would protect a malicious defendant from a well grounded claim indefamation. Without anaction for negligence the employee may, therefore, be left with no practical. (the “capricorn”) [1995] 1 lloyd's rep. 622 queen’s bench division Evans stated that the most serious factor was of the plaintiffattempting to advise on investments he was not fully familiar with.She was not asked to postulate what her conclusion might have beenif, for example, as Mr. Livesey went to such pains to establish, thefurther fact was added that he had been given blanket authorisation tosell the defendants' products and was, of course, urged by thedefendants so to do when, as I find, he had had only the sketchiest oftraining. All the membersof the Appellate Committee in this case spoke in terms of the principle restingupon an assumption or undertaking of responsibility by the defendant towardsthe plaintiff, coupled with reliance by the plaintiff on the exercise by thedefendant of due care and skill. Type Legal Case Document Is part of Journal Title Industrial Relations Law Reports. Thequestion whether a person who gives a reference to a third party may, if thereference is negligently prepared, be liable in damages not to the recipient butto the subject of the reference, did not arise in Hedley Byrne and so was notaddressed in that case. Nonetheless, in the circumstances of this case, it is moreconvenient to consider the position in negligence first, which is the order. It is, however, necessary for an understanding of the manner in whichthe issue arises to give a brief outline of the salient facts. The question for decision was whether, in such circumstances.the bank was liable to the plaintiffs in damages. In Scally it was decided that where acontract of employment negotiated between employers and a representativebody contained a particular term conferring on an employee a valuablecontingent right to a pension of the benefit of which he could not be expectedto be aware unless the term was brought to his attention, there was an impliedobligation on the employer to take reasonable steps to publicise that term.Accordingly, when the employer failed to notify the employee of his pensionrights, which were therefore lost, he was entitled to recover damages forbreach of contract in respect of that loss. To this end he called further evidence from Mrs.Ruth Evans, Compliance officer at Scottish Amicable, who stated, onwhat Mr. Eady postulated as a hypothesis of the agreed facts in thecase, that they would, in all probability, not have employed him. 502-503): "My Lords, I consider that it follows and that it should now beregarded as settled that if someone possessed of a special skillundertakes, quite irrespective of contract, to apply that skill for theassistance of another person who relies upon such skill, a duty of carewill arise. Onemust, however, be careful about seeking to find any general principlewhich will serve as a touchstone for all cases, for even within thelimited category of what for the sake of convenience, I may refer toas 'the negligent statement cases,' circumstances may differ infinitelyand, in a swiftly developed field of law. 28 (1979) paras. what is its scope... What emerges is that, in addition to theforeseeability of damage, necessary ingredients in any situation givingrise to a duty of care are that there should exist between the partyowing the duty and the party to whom it is owed a relationshipcharacterised by the law as one of 'proximity' or 'neighbourhood' andthat the situation should be one in which the court considers it fair,just and reasonable that the law should impose a duty of a given scopeupon the one party for the benefit of the other. Privilege, where applicable, is in a few areas an absolute butin most a qualified defence. 528 530): "I think, therefore, that there is ample authority to justify yourLordships in saying now that the categories of special relationshipswhich may give rise to a duty to take care in word as well as in deedare not limited to contractual relationships or to relationships offiduciary duty, but include also relationships which in the words ofLord Shaw in Nocton v. Lord Ashburton are 'equivalent to contract,'that is, where there is an assumption of responsibility in circumstancesin which, but for the absence of consideration, there would be acontract . In substance theappellant would add to these duties a duty in such a case as this to takecare not to injure the plaintiff's reputation by true statements. My Lords, if no reasons of policy intervened there might be much tobe said for the view that Mr. Spring is entitled to succeed in his claim basedon negligence, on the basis that it was reasonably foreseeable that damage tohim would result if the reference were prepared without reasonable care andit thus incorrectly disparaged him. The company was not engaged in thebusiness of giving advice about investments; and it was held that a personwho renders services gratuitously in circumstances where he is not engaged. 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