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Hedley Byrne & Co Ltd v Heller &Partners Ltd

Abiola Cunningham

Camica Wallen

Garvin Granger Hutson St John

Kerlysse Hilare

Onika Blandin

Nigel

Svetlann Jackson


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Lord Hodosn,

Lord Devlin

Lord Pearce

Key WordsNegligent misrepresentation Assumption of responsibility

Hedley Byrne & Co Ltd v Heller & Partners Ltd

Court House of LordsDecided 28 May 1963

Judge(s) sitting

Lord ReidLord Morris of Borth-Y-Gest,


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CASE SUMMARY

Hedley Byrne was a firm of advertising agents. Their client, EasipowerLtd, put in a large order. Hedley Byrne wanted to check their financialposition, and credit-worthiness, and subsequently asked their bank,National Provincial Bank, to get a report from Easipowersbank, Heller& Partners Ltd., who replied in a letter that was headed, "without

responsibility on the part of this bank"It said that Easipower was, "considered good for its ordinary businessengagements".

The letter was sent for free. Easipower went into liquidation andHedley Byrne lost 17,000 on contracts. Hedley Byrne sued Heller &Partners for negligence, claiming that the information was given

negligently and was misleading. Heller & Partners argued there was noduty of care owed regarding the statements. There was an expressdisclaimer of responsibility and there can therefore be no liability. Thiscase established the doctrine of negligent misrepresentation, but inthis case the disclaimer effectively barred the claim.


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FACTS

Plaintiff (Hedley Bryne) was an advertisement agency,working for a company called Easipower.

The Defendant ( Heller) was the Banker of Easipower

The Plaintiff was concerned about the financialposition of Easipower, and sought help through theirbankers, who obtained information through theDefendant.

The Defendant, through statements and documentsmarked without responsibility on the part of this bank,replied that Easipower is in good a financial position.This was done a couple of times.


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FACTS

Plaintiff relied on this when making investments and

later Easipower went bankrupt, causing the plaintiff

financial loses.

Hedley Byrne lost 17,000 on contracts.

Hedley Byrne sued Heller & Partners for negligence,

claiming that the information was given negligently

and was misleading.


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ISSUES

I. Did Heller, who was not in a contractual or fiduciary

relationship with Hedley, owe a duty of care to

Hedley to not give negligent advice?

II. Did the statement by Heller that the reference was

given without responsibility exclude Heller from

being liable for negligence?


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Negligent Statements

Special relationship?Pure Economic loss?

Duty to care?

Breach of duty?


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JUDGEMENTS

LORD REID: I am therefore of opinion that it is clear that the respondents never

undertook any duty to exercise care in giving their replies. The

appellants cannot succeed unless there was such a duty and

therefore in my judgment this appeal must be dismissed.

LORD DEVLIN:

A man cannot be said voluntarily to be undertaking a responsibility

if at the very moment when he is said to be accepting it he declares

that in fact he is not. The problem of reconciling words ofexemption with the existence of a duty arises only when a party is

claiming exemption from a responsibility which he has already

undertaken or which he is contracting to undertake. For this reason

alone, I would dismiss the appeal.


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PRINCIPLES ESTABLISHED

Lord Oliver developed the Hedley Byrne principles thus: themaking of a statement will give rise to a duty where

advice is sought in circumstances where the adviser is

aware, "actually or inferentially," of the purpose for which the advice is sought;

the adviser is aware that the information will becommunicated to the other party;

the adviser is aware that the recipient will act on that

advice; and the recipient so acts to his detriment.


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CONCLUSION


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Hedley Byrne v Heller (1964)

no need to establish a contractual or fiduciary

relationship

person giving the information must be of special skill(or hold themselves out as having such skill)

assumption of responsibility by the speaker

reasonable reliance by plaintiff

no disclaimer of responsibility


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THANK YOU

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