Law and Ethics

Session 5

TortConsumer Law

Online Revision Bridging Course

1) Describe a tort and define negligence

2) The four elements of negligence

3) Defences to negligence

4) Remedies for an injured party

5) Professional negligence

Contents

2

Law of Tort

4

• A wrongful act in civil law other than a breach of contract or trust that gives rise to a claim in damages

• Common examples:

• Trespass

• Nuisance

• Defamation

• Negligence

Tort Defined

5

• The unintentional breach by one party of a legal duty of care that cause loss/damage to the injured party

• Must prove:

• Duty of care owed by the defendant

• Breach of the duty of care

• Damage suffered was caused by the breach

• Damage was not too remote

What is Negligence?

6

• Did the defendant owe a duty of care to the injured party?

Donoghue v Stevenson (1932)

• The Neighbour Principle - Persons who are so closely and directly affected by my acts or omissions that I should have them in contemplation when directing my mind towards those acts or omissions

• The Modern Day Test Caparo Industries v Dickman (1990)

• Was it reasonably foreseeable defendant’s action would cause harm?• Is there sufficient proximity between plaintiff and defendant?• Is it fair just and reasonable to impose a duty of care?

Duty of Care

7

• Reasonable Man Test

Blyth v Birmingham Waterworks (1856)

“omission to do something which a reasonable man would do”.

• Probability of causing damage

O’Gorman v Ritz Clonmel (1947)

• Seriousness/Gravity of likely damage

Paris v Stepney Borough Council (1951)

• Cost and practicality of taking precautions

Muldoon v Ireland and Others (1988)

• Social Value of defendants actions

Watt v Hertfordshire County Council (1954)

Breach of Duty

8

• Did the Breach cause the damage suffered by the injured party?

• BUT FOR TEST but for the defendant’s breach would the plaintiff have suffered the damage?

Barnett v Chelsea and Kensington Hospital (1969)

Causation

9

• MATERIAL ELEMENT TEST

• Where there are multiple causes of the injury

McGhee v National Coal Board (1973)

Causation

10

• Reasonable Foreseeability Test - The courts will have to determine the damage cause was too remote, i.e., not reasonably foreseeable

Re: The Wagon Mound (1961)

Remoteness

11

• Volenti non fit Injuria :Voluntary Assumption of Risk (Consent)

Regan v Irish Automobile Club (1990)

• Illegality

Ashton v Turner (1981)

• Contributory Negligence

Froom v Butcher (1976)

DEFENCES

12

• Damages

• Special Damages

• General Damages

• Aggravated Damages

• Exemplary Damages

• Nominal Damages

• Injunctions

• Mandatory/prohibitory

• Interim/permanent

REMEDIES

SAGEN

13

• Must exercise a standard of care that is appropriate to a reasonable member of the profession

• Common practice

What if the practice itself is flawed?

Bolitho v City & Hackney Health Authority (1998)

Professional Duty of Care

14

QUESTION 11 – NEGLIGENCE AND DUTY OF CARE(a) Explain the meaning of the term negligence.

(1 mark)(b) In the context of duty of care in negligence explain how the following TWO tests operate in order todetermine the existence of a duty to take reasonable care:

(i) The neighbour principle(4 marks)

(ii) The modern day test(5 marks)

Total 10 Marks

15

QUESTION 10

Austin recently audited the accounts of Westwall Construction Ltd and provided an unqualified auditor’s

report to the shareholders of the company at its Annual General Meeting (AGM). Subsequent to this

report the company has been investigated by the Office of the Director of Corporate Enforcement (ODCE)for

fraudulent activity. The ODCE has discovered that the financial accounts of the company have been falsified

in terms of sales records, purchases records, stock and the value of its fixed assets (which have not been

depreciated in line with current market value). As Austin had not attended Westwall Construction Ltd’s stock

take in the previous five years he was unaware of the falsified purchases, sales and stock records.

The shareholders of Westwall Construction Ltd have recently appointed new directors to the company.

These directors have contacted Austin to inform him that they plan on suing him for all losses arising in

the company as a consequence of his negligence.

A. Draw a table outlining the FOUR elements of negligence and list the tests applied by the Court to

determine the existence of each of these elements.

8 Marks

B. Assess the potential success or otherwise of Westwall Construction Ltd’s claim against Austin for

negligence.

2 Marks

Total 10 Marks

A. Elements of Negligence TestsDuty of Care:(1) Neighbour Test(2) Modern Day Test:Was it reasonably foreseeable that the defendant’s action would cause harm?Is there sufficient proximity between the plaintiff and defendant?Is it fair, just and reasonable to impose a duty of care on the defendant? (3 marks)

Standard of Care:Reasonable Man Test – taking into consideration:A. The probability of causing damageB. The seriousness/gravity of the likely damageC. Issues of cost and practicalities in taking precautionsD. The social value of the defendant’s actions (2.5 marks)

Causation:A. Single Cause: the “but for” testB. Multiple Causes: whether or not the actions of the defendant materially or substantially contributed to the plaintiff’s injury (1.5 marks)

Remoteness: Reasonable Foreseeability (1 mark)

B. Conclusion that: (1) Austin owed Westwall Construction Ltd’s a duty of care (based on foreseeability and proximity),

(2) he breached the standard of care by not attending WestwallConstruction Ltd’s stock take in the previous five years,

(3) but for the actions of Austin the shareholders of WestwallConstruction Ltd may not have suffered a loss, and Austin’s actions materially and substantially contributed to this loss, and

(4) these losses are reasonably foreseeable– thereby Austin is liable in negligence to Westwall Construction Ltd (2 marks)

The two main remedies in a Tort action are injunctions and damages. In this regard explain the meaning:(a) The meaning of the term “injunction” and the types of injunctions that may be granted by the Court.

(3 marks)(b) The distinction between general damages and special damages.

(4 marks)(c) The meaning of the term “punitive damages”, including an example of a situation where these types ofdamages may be awarded.

(3 marks)Total 10 Marks

A. Injunction: This is an Order of the Court compelling a person to do a specific thing (mandatory

injunction) or preventing a person from doing a specific thing (prohibitory injunction) – an injunction is

classed as an equitable remedy and therefore granting it is at the absolute discretion of the Court – it is

usually awarded when there is a legitimate legal case to answer and where the balance of probabilities lies

in favour of granting it (2 marks) – there are two main types: (1) an interim injunction – granted on a short

term basis pending a full hearing of the legal issues, and (2) a perpetual injunction granted following a full

hearing of the case (1 mark)

B. General and Special Damages: Special damages are awarded for out of pocket expenses incurred as a

result of the defendants actions – they are generally capable of being calculated and are usually divided into

two distinct headings, loss of actual earnings and medical expenses – they can also relate to expenses

arising out of property damage (2 marks), whereas general damages are damages awarded for the civil

wrong committed, but which are not capable of simple calculation – this could include damages arising

from pain and suffering as a consequence of a physical injury or mental distress, as well as future medical

expenses, loss of future earnings, diminution of quality of life etc (2 marks)

C. Punitive Damages: These are damages awarded as an additional measure to the plaintiff in cases where

the Court strongly disapproves of the defendants behaviour, and to punish/make an example of the

defendant – generally, they are only awarded where the actions of the defendant are sufficiently egregious

and where the Court believes that actual loss is not sufficient to sanction this behaviour (2 marks) – an

example of this could arise in a defamation case, where rather than admit they are wrong the defendant

states that they can prove the truth of their statement and then cannot do this when the case goes to hearing

(1 mark)

QUESTION 11 – NEGLIGENCE AND STANDARD OF CARE Summer 2017

Auden operates a coffee shop and confectionary store in Killarney. Last month there was an electricity outage

overnight, which Auden only discovered the next morning. Thankfully, all the fridges and freezers used in the

shop stay cold for 24 hours when closed, even if the electricity has been switched off – therefore, Auden was still

able to use the products stored in these fridges and freezers and didn’t need to dump any of the food.

Unfortunately, Auden failed to realise that the machine for selling soft ice cream cones had also been turned off

overnight and that the ice cream had completely defrosted. Inadvertently, Auden re-froze this defrosted ice

cream and continued to sell it to his customers.

Last week his premises were visited by a representative from the Food Safety Authority, and following an

inspection he was informed that there was a strain of bacteria growing in the food in his soft ice cream machine,

and that they had received complaints from a number of customers who had become seriously ill following

consumption of ice creams from this machine. The medical evidence of the Food Safety Authority indicated that

the bacteria was a direct result of the re-freezing of the defrosted ice cream. Auden was really distressed to hear

this, and was even more anxious when he received a letter from Robbins, a customer who had purchased an ice

cream from his store, suing him in negligence for the cost of his hospital stay, loss of earnings and pain and

suffering as a consequence of a four-day stay in hospital for bacterial poisoning.

Required:

In the context of negligence, explain the various factors that the Court will take into consideration in determining

whether there has been a breach of the standard of care by Auden and assess his potential liability to Robbins

and

the other affected customers in this situation.

Total: 10 Marks

QUESTION 11 – NEGLIGENCE, DAMAGES AND DEFENCES Summer 2016

Rooney is a baggage handler employed by the Waterford Airport Authority. He was recently involved in

an accident when the brakes on the baggage cart and trailer that he was driving failed, and caused him

to collide with a stationary transport bus. At the time of the collision Rooney was not wearing his seat

belt, as required by the company rules. Rooney has decided to sue the Waterford Airport Authority in

negligence for his injuries, but has been advised that the Waterford Airport Authority intends to raise a

defence of contributory negligence.

Rooney has contacted you for advice regarding these matters.

Required:

A. Define the meaning of the term negligence.

(1 mark)

B. Discuss the distinction between an award of general damages and an award of special damages in

the context of a negligence action. (4 marks)

C. Explain the meaning of the term contributory negligence, using case law to support your answer. In

light of this explanation determine the impact of a successful claim of contributory negligence by the

Waterford Airport Authority in relation to Rooney’s proposed action.

(5 marks)

Total 10 Marks

Consumer Law

23

• Key elements in a contract for the sale of goods

• Must have as its objective the transfer of property in goods

• Must be for a sale

• Goods sold must be given a price

Sale of Goods and Supply of Services Act 1980

24

• Section 12 Title of Goods

• Seller must have the right to sell the goods

Rowland v Divall (1923)

IMPLIED TERMS

25

• Section 13 Description

• The goods sold must correspond to the description

Beale v Taylor (1967)

Varley v Whipp (1900)

IMPLIED TERMS

26

• Section 14 Merchantable Quality

• Goods sold ‘in the course of a business’ must be of merchantable quality

• i.e. goods reach the standard that a reasonable person would regard as of merchantable quality

Wilson v Rickett Cockerell & Co Ltd (1954)

IMPLIED TERMS

27

• Section 14 Merchantable Quality

• Cannot rely on the implied term if

• Seller brought defect to the buyer’s attention before the contract was completed or

• Buyer examined the product and ought to have noticed the matter of unsatisfactory quality or

• Buyer examined a sample of the goods and ought to have noticed the defect

Grant v Australian Knitting Mills (1936)

IMPLIED TERMS

28

• Section 14 Fitness for Purpose• Where buyer expressly makes known to the seller the purpose

for which the goods are required, then the seller must provided goods fit for that purpose.

• Seller can avoid liability by proving that the buyer did not rely on the sellers knowledge/skill/judgement.

Baldry v Marshall (1925)

Priest v Last (1903)

Griffiths v Peter Conway Ltd (1939)Tweed product caused a rash but buyer had abnormally sensitive skin

IMPLIED TERMS

29

• Section 15 Sale by Sample

• The goods must correspond with the sample in terms of quality and be free of defects

• The buyer should be given a reasonable opportunity to compare the sample with the bulk of the goods

• Godley v Perry (1960)

IMPLIED TERMS

30

• Supplier of the service must

• Have the necessary skill

• Supply the service with reasonable skill, care and diligence

• Use materials which are sound and reasonably fit for the

purpose

• Supply goods that are of satisfactory quality

• Supply the service within a reasonable time and at a reasonable price (if no time or price has been agreed)

Supply of Services - implied terms

31

• Repudiation/Damages

• Specific Performance

• Cash Refund

• Any attempt to exclude the terms of the Sale of Goods and Supply of Services Act 1980 in a consumer contract is strictly prohibited.

Remedies and Exclusions

32

• Defines a trader as

“a person …….who is acting for purposes related to the person’s trade, business or profession”.

• The act simplifies consumer rights and protects consumers from unfair commercial practices

• Defines unfair, misleading and aggressive practices and lists 32 prohibited practices

The Consumer Protection Act 2007

33

• Section 41 = general prohibition on unfair commercial practices

• Unfair = fails to meet the standard of professional diligence

• The transaction was not entered into in good faith by the trader, and/or

• The standard of skill and care exercised by the trader is likely to

• Cause appreciable impairment of the average consumers ability to make an informed choice, and

• Cause the average consumer to make a decision that they would not have otherwise made

Unfair Commercial Practices

34

• Section 43, Misleading practices are those that

• Mislead the consumer through the provision false information, or deceptive presentation of the product and this deceives the consumer in relation to

• the existence or nature of the product and/or

• the main characteristics of the product and

• the action causes the consumer to make a different economic decision

• Examples of misleading practice

• Price, Geographic Origin, Method of Manufacture, Quality, Quantity, Specification, Fitness for Purpose, Ingredients, Risks, Terms and Conditions

Misleading Practices

35

• Causes significant impairment of the average consumer freedom of choice and

• Causes the average consumer to make a different economic choice

• Harassment, Coercion, Undue influence

• Courts will take into account, language, timing, location, tactics used etc.

Aggressive Practices

36

• Falsely claiming approval, authorisation/endorsement of a regulatory body

• Falsely claiming to be ceasing trading or moving premises

• Claiming a product is “gratis”, “free”, “without charge” if consumer has to pay something other than necessary /reasonable cost, e.g. delivery

• Falsely claiming product available for a limited time

• Not making clear that editorial content is a paid promotion

• Deliberately misleading a consumer into thinking your product is that of another manufacturer

• Competitions where there is no prize awarded

• Failing to comply with a request to leave made by consumer

• Repeated failure to comply with consumer requests to cease unsolicited representations

• Demanding payment for unsolicited goods or demanding the return of safe keeping of unsolicited goods

Prohibited Practices

37

• Monetary Fine €3,000 and or/ imprisonment for up to 1 year

• On indictment = €60,000 monetary fine, and/ or imprisonment of up to 2 years

Penalties

38

• In 2014 the EU Consumer Rights Directive was transposed into Irish law

• Protection for consumers who enter into on- premises, off premises and distance contracts with web traders in Ireland and EU

• Cancellation right -within 14 days delivery

• Refunds – within 14 days including cost of delivery

• Pre-Ticked Boxes – prohibited where it might result in additional charges

• Hidden Charges and Fees - total costs before order confirmed

• Digital Purchases – inform regarding compatibility

Consumer Protection Directive

39

• Functions

• To promote competition

• To promote and protect the interests and welfare of consumers

• To enforce the relevant statutory provisions including by summary prosecution

• To encourage compliance

• To investigate suspected offences

• To set out the strategic objectives of the Commission

• To ensure appropriate systems and procedures are in place to achieve these objectives

The Competition and Consumer Protection Commission (CCPC)

40

• Prosecution – summarily or by referral to DPP

• Compliance Notices – requiring compliance by a given date

• Undertakings – written undertaking (promise) to comply with the Act

• Prohibition Orders – Apply to the CC or HC for an order prohibiting a trader from engaging in prohibited practice(s)

• Fixed Payment Notices - On the spot fines

CCPC-Enforcement Powers

QUESTION 12 – EUROPEAN UNION (CONSUMER INFORMATION, CANCELLATION AND

OTHER RIGHTS) REGULATIONS 2013 Summer 2017

Whitman recently purchased a replacement screen for his 4G Apple iPhone online from a company called

Everlasting IT Solutions. He was quoted €40 for this replacement and paid this sum by credit card.

Unfortunately, when this screen arrived in the post last week Whitman discovered that it was not suitable for his

4G iPhone despite stating that it was suitable for that particular model on the website. Whitman emailed the

company regarding this issue and was told that he would receive a full refund on this item. They told him to post

the replacement screen back to them and that they would refund his account when they received this item.

Unfortunately, although Whitman returned this item over three weeks ago he still had not been refunded the €40

that he paid for this item. In addition, when he was checking his credit card bill to see if he had been refunded

the €40 for this item, he discovered that he had in fact been charged €50 for this screen. Upon querying this with

Everlasting IT Solutions they informed him that he had agreed to take insurance on this item by failing to un-tick

the box in relation to insurance on the website. They also told him that they were still processing his refund and

that this could take another three weeks. Whitman has contacted you for advice as to whether the actions of

Everlasting IT Solutions are in breach of consumer law.

Required:

Describe any FOUR additional protections afforded to consumers under the terms of the European Union

(Consumer Information, Cancellation and Other Rights) Regulations 2013, and determine whether Whitman’s

rights have been breached in this situation.

Total: 10 Marks

QUESTION 12 – SALE OF GOODS ACT Summer 2016

Manson decided to renovate his bathroom. He called to his local tile store, Crofton Tile Solutions, and

discussed his needs with the sales clerk. Based on the clerks recommendations he purchased two types of tiles,

plain white matt tiles for the floor and marble designed tiles for around the inside of the shower unit, and around

the bath and sink. In relation to the floor tiles he purchased fifteen boxes of white matt tiles, with each box

containing six tiles. However, after Manson had laid around three quarters of the tiles he discovered that

although the last four boxes were described as white matt tiles when he opened them, they were in fact black

matt tiles. In addition, when he was trying to lay the shower tiles they kept cracking. After doing some internet

research Manson has learned that these marble design tiles are suitable for floors only and are not suitable for

use in relation to bathroom units.

Following these issues Manson returned to Crofton Tile Solutions and spoke with the manager. This manager

agreed to replace the boxes of black matt tiles with white ones, but after searching the stock room informed

Manson that the white ones were no longer in stock and in fact this line of tiles has now been discontinued. The

manager has offered to refund Manson the price of the four boxes of black matt tiles, but is refusing to offer any

remedy in respect of the marble tiles, as the boxes have been opened.

Manson is furious about this situation and has contacted you for advice.

Required:

A. In the context of the Sale of Goods and Supply of Services Act 1980 explain the obligations imposed upon

sellers in relation to sale by description, merchantable quality and fitness for purpose.

(8 marks)

B. Advise Manson as to whether Crofton Tile Solutions has acted in breach of the legislation and if so the most

suitable remedies available to him in this situation.

(2 marks)

Total 10 Marks

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