Hedley Byrne v Heller
| Hedley Byrne v Heller | |
|---|---|
 |
|
| Court | House of Lords |
| Decided | 28 May 1963 |
| Citation(s) | [1964] AC 465, [1963] 2 All ER 575, [1963] 3 WLR 101, [1963] UKHL 4 |
| Court membership | |
| Judge(s) sitting | Lord Reid, Lord Morris of Borth-y-Gest, Lord Hodson, Lord Devlin and Lord Pearce |
| Keywords | |
| negligent misrepresentation, assumption of responsibility | |
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 is an English tort law case on pure economic loss resulting from a negligent misstatement. Prior to the decision, the notion that a party may owe another a duty of care for statements made in reliance had been rejected, with the only remedy for such losses being in contract law. The House of Lords overruled the previous position, in recognising liability for pure economic loss not arising from a contractual relationship, introducing the idea of "assumption of responsibility".
Hedley Byrne were a firm of advertising agents. A customer, Easipower Ltd, put in a large order. Hedley Byrne wanted to check their financial position, and creditworthiness, and subsequently asked their bank, National Provincial Bank, to get a report from Easipower’s bank, 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 business engagements".
The letter was sent for free. Easipower went into liquidation, and Hedley 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 no duty of care owed regarding the statements, and, in any case, liability was excluded.
The court found that the relationship between the parties was "sufficiently proximate" as to create a duty of care. It was reasonable for them to have known that the information that they had given would likely have been relied upon for entering into a contract of some sort. That would give rise, the court said, to a "special relationship", in which the defendant would have to take sufficient care in giving advice to avoid negligence liability. However, on the facts, the disclaimer was found to be sufficient to discharge any duty created by Heller's actions. There were no orders for damages, because,
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