Business Law Part 7 – Negligence

1 First Negligence Case - Donoghue v Stevenson (1932)

1.1 Context

Mrs Donoghue went to a cafe with a friend. The friend brought her a bottle of ginger beer and an ice cream. The ginger beer came in an opaque bottle so that the contents could not be seen.
Mrs Donoghue poured half the contents of the bottle over her ice cream and also drank some from the bottle. After eating part of the ice cream, she then poured the remaining contents of the bottle over the ice cream and a decomposed snail emerged from the bottle.
Mrs Donoghue suffered personal injury as a result. She commenced a claim against the manufacturer of the ginger beer.

1.2 Questions

Query 1: Why did Mrs Donoghue not sue for breach of contract?
Query 2: Who did Mrs Donoghue sue?

Privity of contract

Rule 1: A third party to a contract cannot enforce a benefit promised under that contract
Rule 2: The contracting parties cannot, by a contract between them, impose a burden on a third party

1.3 The Neighbour Principle

Lord Atkin

“The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply”.
“You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour”.
“Who, then, in law is my neighbour? The answer seems to be—persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question”.

2 Elements of Negligence

A duty of care owed by the defendant to the plaintiff [Existence of duty of care]
The defendant has breached his duty of care [Breach of duty]
The defendant’s breach caused the plaintiff loss and such loss is not too remote [Causation and remoteness]

3 Establishing a Duty of Care

General Rule: 1 threshold and 2 stage test

Spandeck Engineering (S) Pte Ltd v DSTA (2007)

Threshold: Factual (reasonable) foreseeability
Two-stage Test
- Legal Proximity
- Policy Considerations (if threshold + legal proximity established, prima facie duty of care arises. Policy considerations should then be applied to determine whether or not to negate this duty

3.1 Factual Foreseeability

General Rule

The requirement of reasonable foreseeability from a factual perspective will almost always be satisfied, simply because of its very nature and the very wide nature of the ‘net’ it necessarily casts. - Sunny Metal v & Engineering Pte Ltd v Eric Ng (2007)
The test is about the foreseeability that one’s negligent act or omission might result in the damage suffered by the Plaintiff. The focus is on the foreseeability of harm in general and the foreseeable class of persons who may be affected. (From the eyes of the one causing the negligent act) - Gary Chan, The Law of Torts in Singapore

Rare Failed Case

Man Mohan Singh v Zurich Insurance (2008)

Context: The appellants lost their two sons in a car accident. They tried to claim against the other party’s insurer for losses due to post-accident trauma and depression and also for costs due to their efforts to have another child via fertility treatment (the wife had problems conceiving).
Holding: There was no duty of care in respect of the fertility treatment
- Where a driver’s negligent driving kills a child travelling in another car, he does not know whether the victims have a living parent or parents.
- It is likely that they might have, but is the driver also expected to know that the victims would be all the children of the parent or parents when it is arguable that the driver should not be expected to know that the victims are all from the same family?

3.2 Legal Proximity

General Rule: Focus is on the closeness of the relationship between the parties themselves. - Spandeck Engineering (S) Pte Ltd v DSTA (2007)

General Rule: Duty of care does not arise in the case of an omission (unless in special relationship of dependence) - Stovin v Wise

General Rule: 5 factors

Sutherland Shire Council v Heyman (1985)

Physical Proximity (space and time)
Circumstantial Proximity (e.g. employer/employee, professional/client) - closeness of relationship
Causal Proximity - closeness or directness of the causal connection or relationship between act and conduct and the loss sustained
Assumption of responsibility
Reliance

Personal Injury / Damage: Physical, Circumstantial and Causal

BNM v National University of Singapore (2014)

Context: The plaintiff’s husband drowned in a swimming pool owned by the first defendant (“NUS”) and the plaintiff brought an action in tort against NUS for negligence. NUS had outsourced the supply of lifeguards and cleaning of the swimming pool to the second defendant (“Hydro Aquatic”). NUS tried to make Hydro Aquatic liable.
Holding: Legal proximity was found.
- I have described the NUS swimming pool in some detail above. It is clear that it was large and deep enough in parts such that a swimmer getting into difficulties would find it hard to reach the safety of the poolside and therefore risk serious injury or even death by drowning.
- Swimmers can get into difficulty for a variety of reasons: sudden muscle cramps; accidental ingestion of large amounts of water; collisions with other swimmers or the pool wall; diving mishaps; or falls into the pool.
- Because they are immersed in water, the danger of drowning or serious injury arising from near fatal submersions is obvious. Pool operators therefore have a duty to take reasonable care and responsibility for the safety of all who use their pools.

Psychiatric harm: McLoughlin factors

McLoughlin v O’Brian (1983)

Context: Mrs McLoughlin’s husband and three children were involved in a car accident at 4pm. At 6pm, she was informed of the accident and rushed to the hospital. Upon hearing that her youngest daughter was dead and seeing her husband’s condition, she suffered psychiatric illness due to depression and change of personality affecting her abilities as a wife and mother. She claimed against the respondent for shock and injury due to their negligence in causing the accident.
Holding:
- The class of persons whose claims should be recognised; [Circumstantial]
- The proximity of such persons to the accident; and [Physical]
- The means by which the shock is caused. [Causal]
Note
- As regards the class of persons, the possible range is between the closest of family ties - of parent and child, or husband and wife - and the ordinary bystander.
- Existing law recognises the claims of the first: it denies that of the second, either on the basis that such persons must be assumed to be possessed of fortitude sufficient to enable them to endure the calamities of modern life, or that defendants cannot be expected to compensate the world at large.
- It should follow that other cases involving less close relationships must be very carefully scrutinised. I cannot say that they should never be admitted. The closer the tie (not merely in relationship, but in care) the greater the claim for consideration.

Pure Economic Loss: Hedley Bryne/Caparo factors

Hedley Byrne & Co Ltd v Heller & Partners

The skill and expertise of the maker of the statements
Whether the maker of the statement knows or ought to know that the other person will rely on the statement
Whether the maker of the statement voluntarily undertakes or assumes responsibility for making the statement [Assumption of responsibility]
Where the relationship between the maker of the statement and the recipient is akin to contract, a duty of care is likely to arise
Payment for information or advice is very good evidence that the advice is being relied on… material to consider whether the adviser is acting purely out of good nature or whether he is getting his reward in some indirect form

Caparo Industries vs Dickman

Holding: No duty of care owed to members of the public in general, in respect of the defendant’s negligent misstatements concerning the audited accounts of the company. No duty of care owed by the auditors of a company to individual members of the public at large who rely on the information to buy shares in the company.
Factors
- The purpose (general or specific) was made known to the adviser at the time of the advice
- The adviser knows or ought to know that his or her advice will be communicated to the plaintiff for the above purpose
- The adviser knows or ought to know that his or her advice will be acted upon by the plaintiff without independent inquiry
- The advice was acted upon by the plaintiff to his or her detriment

3.3 Policy Considerations

Relevant Considerations

Indeterminate liability: Would imposing a duty of care lead to indeterminate liability to an indeterminate number of claimants or claims of an indeterminate size?
Conflict / Coherence with contractual and other tortious frameworks (e.g. UCTA)
Conflict / Coherence with statutory frameworks, institutional duties and public functions and justiciability
Personal Autonomy, Self-determination and Personal Responsibilty: law should not be overly paternalistic (don’t protect adults how intentionally harm themselves)
Distributive and Correctional Justice: more readily recognised where defendents (large corporations) are able to pass on the cost of liability to wide range of individuals either through increasing the cost of goods / insurance

4 Breach of Duty of Care

Establishing a duty of care is the first step, but not sufficient to create liability. Need to establish what is the standard of care that ought to be taken to fulfil the duty of care, and then consider if this standard of care has been breached.

General Rule: Standard of care is standard of reasonable person using ordinary care and skill.

Nettleship v Weston (1971)

Context: Mr Nettleship, an experienced driver, agreed to give a friend’s wife, Mrs Weston, some driving lessons in her husband’s car. Mrs Weston took up a provisional driving licence. On one occasion, Mrs Weston failed to straighten out after turning left, and panicked. Despite the fact that the car was moving at walking pace and Mr Nettleship’s efforts to straighten out, it mounted the kerb and struck a lamp standard. Mr Nettleship fractured his knee. Mrs Weston argued that the standard of care should be lowered for learner drivers.
Holding: A learner driver is expected to meet the same standard as a reasonable qualified competent driver.

4.1 Factors Determining Standard of Care

Extent of harm - risk + magnitude (i.e. P(suffered damage occurring | negligent act) * |damage suffered|)
Cost of avoiding harm - do not expect people to go to great expense to eliminate any possible risk, just take reasonable steps / precautions - Latimer v AEC (1953)
Industry standards

4.2 Professionals

General Rule: The standard of care is that “reasonably expected of a reasonably competent professional with respect to a particular field”.

Factors to determine professional vs non-professional

nature of work or activity
qualifications of the defendant
level of expertise or knowledge required
training required to perform the task
whether the defendant held himself out to be an expert or professional

Philips v William Whiteley Ltd (1938)

A jeweller conducted an ear piercing operation for the pf to wear earrings. Not a doctor and did not hold himself out to be a surgeon or expert. Held that the standard of care expected of him was that of a jeweller and not a doctor conducting a surgical operation.

OCBC Securities Pte Ltd v Yeo Siew Huan (1998)

Held that strong expert evidence would be required to prove negligence on the part of the stockbroker giving advice, in cases of market unpredictability or uncertainty as in such cases, inherent risks of the advice turning out to be wrong would be great, unless the advice was one which no reasonable stockbroker would give.

5 Causation and Remoteness

5.1 Factual Causation

One of the following:

But-for test - Sunny Metal v Ng Khim Ming
Material Contribution test (only use for abestoes poisoning)
- Whether the defendant’s negligence contributed materially to the plaintiff’s harm
- Whether the defendant’s negligence contributed materially to the risk of the plaintiff’s harm
- (see Fairchild v Glenhaven Funeral Service Ltd - employee exposed to abestoes and contracting mesothelioma. Worked for many different employers. Sued one employer. Held: Defendant’s conduct contributed materially to the risk of defendant contracting disease).

5.2 Legal Causation

General Rule: Whether the chain of causation is broken (i.e. whether there is Novus actus interveniens) - Jobling v Associated Dairies

Applicable when act / event takes place between defendant’s negligence and damage that ensued
Chain of causation broken if the intervening act of a third party
- constitutes a wholly independent cause of damage
- Is unreasonable, deliberate, reckless or unforeseeable

5.3 Remoteness

General Rule: Reasonable foreseeable test - the loss would not be too remote where the type of loss which actually occurred was reasonably foreseeable, notwithstanding that the precise extent of the lsos was not foreseeable. - Wagon Mound (No 1) (1961)

Exception: Eggshell skull rule in personal injury case - no need to be able to foresee.

6 Limitation Period

General limitation period for tort: 6 Years from date on which the cause of action accrued (same as contract) - Section 6(1) of Limitation Act
For Negligence (unlike breach of contract), date cause of action accrued will be when loss is suffered.
If P did not know of damage and right to bring action, P has 3 years from date of knowledge to bring action - Section 24A(3) of Limitation Act
If the damage in question includes personal injury, and P did not know about right to bring action in respect of the injury, then P has 3 years from date of such knowledge to bring action - Section 24A(2) of Limitation Act

Last updated on 30 Aug 2021