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A negligent misstatement is a misstatement that is made honestly, but carelessly by party A to party B, where A owes B a duty of care. An action can be brought in tort for negligent misstatement.
It differs from a negligent misrepresentation in that an action for any form of misrepresentation will be between contracting parties, whereas no contractual relationship is required for negligent misstatement.
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There are a number of ways in which liability for negligent misstatement may be avoided and/or limited. For details on founding a claim of negligent misstatement, see Practice Note: Negligent misstatement—founding a claim.For guidance generally on clauses seeking to limit or exclude liability, see Practice Notes:•Misrepresentations—excluding and limiting liability for them•Contractual estoppel•Contractual estoppel—key & illustrative casesDisclaimers of liability for negligent misstatementLiability for negligent misstatement can be disclaimed if the statement is accompanied by a form of words which makes the intention to disclaim clear.In Hedley Byrne v Heller the defendants stated that their advice was given 'without responsibility' and this was held to be effective to negate liability for negligence which would otherwise have arisen.It is important that the words chosen are express and unambiguous: the court will not be prepared to identify a disclaimer as a matter of inference (Box v Midland Bank [1981] 1 Lloyd’s Rep 434, not reported by ½Û×ÓÊÓƵ®).Third partiesThe mere fact that the situation is one involving a third party will not necessarily make it...
Similar but different to a claim for actionable misrepresentation are claims for negligent misstatement. This Practice Note sets out when and how such claims may by brought, by whom and the key essential ingredients of such claims. For details on remedies for negligent misstatement, see Practice Note: Negligent misstatement—defences and remedies.For guidance on bringing a claim for misrepresentation and the distinction between misrepresentation and negligent misstatement claims, see Practice Note: Misrepresentation—what it is and similar claims and related content.What is a claim for negligent misstatement?What is a negligent misstatement?The most obvious type of case is a careless response to a request for a specific piece of information.It also includes careless advice and evaluation in situations requiring special skill, and professional activities such as the auditing of a company.As well as the making of positive statements, liability may be imposed for an omission to make a statement when a duty to make one existed.Who can claim?The usual claimant is the person who asked for the information or advice and to whom...
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Memorandum on directors’ responsibilities and potential liabilities in respect of an AIM admission document 1 Introduction 1.1 This memorandum has been prepared for those persons who are to be named in the document to be published by [insert name of company] (the Company) as directors or proposed directors of the Company (the Directors) in connection with the proposed admission (the Admission) of the ordinary shares of the Company to trading on AIM, a market operated by the London Stock Exchange plc (the LSE). 1.2 An AIM admission document (the Admission Document) is required to be prepared by the Company in connection with the application for the Admission. The Admission Document will disclose financial and other information about the Company[ and its subsidiaries] and must be prepared in accordance with the requirements of the AIM Rules for Companies published by the LSE (the AIM Rules). 1.3 The Directors (among others) are responsible for the contents of the Admission Document and a...
Letter of claim—negligent misstatement by bank [ON THE HEADED NOTEPAPER OF CLAIMANT’S SOLICITORS] Our reference: [insert your file reference for this matter] FAO [RELEVANT NAME] [NAME OF PROPOSED DEFENDANT’S SOLICITORS, IF ANY] [ADDRESS LINE 1] [ADDRESS LINE 2] [POSTCODE] [DATE] Dear [insert name] RE [PROSPECTIVE CLAIMANT’S NAME] AND [PROSPECTIVE DEFENDANT’S NAME] [ [We write further to our letter dated [insert date of previous correspondence, if any]].] [As you know, we OR We] act on behalf of [insert client’s full name], whose address is [insert full address]. This is our client’s letter of claim sent in accordance with the Practice Direction Pre-Action Conduct and Protocols of the Civil Procedure Rules (the Practice Direction), a copy of which is enclosed for your ease of reference. We draw your attention to the final section of this letter, which sets out the deadline by which your response is required, and the consequences of failing to respond properly within that time. [Your client should notify their insurer of this claim immediately. We would...
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What remedies are available to a purchaser where the local authority provided an incorrect search result? How can a developer ensure that the local authority is made aware of the purchaser's intentions to develop the property? Incorrect search result In Chesterton Commercial (Oxon) v Oxfordshire County Council [2015] EWHC 2020 (Ch), the High Court held that a local authority was liable to a buyer for the loss in property value where a local authority search result confirmed incorrectly that part of a property was not highway maintainable at public expense. The court held that the local authority owed a common law duty of care to the claimant in respect of its replies to enquiries. Under the Highways Act 1980, s 36, local authorities are required to create and maintain a list of highways maintainable at public expense in their area. Oxfordshire CC had not kept this list up to date and had not disclosed the investigation which it had been carrying out in respect...
In what circumstances might a director be held personally liable for breach (of the general duties, in contract, or in tort)? Actions against directors can come from various sources, including: • the company—a director’s statutory duties are owed to the company pursuant to the Companies Act 2006 (CA 2006), s 170(1). The company (acting via its board of directors) is therefore the proper claimant in any such action for breach of a director’s statutory duties, as it has been historically in respect of a director’s fiduciary duties • the company’s shareholders—the interests of a company are typically aligned with those of its membership. If a shareholder wishes for action to be taken in respect of a director’s breach, perhaps in circumstances where the other directors have indicated a reluctance to commence a claim on behalf of the company against one of their fellow directors, the shareholder can pursue a derivative action. • the company’s creditors—when a company is insolvent, or close to insolvency, it becomes...
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Banking & Finance analysis: What have been the key cases in the world of banking & finance over the past year?
Commercial analysis: The claim arose out of the discovery that warehouse receipts for nickel deposited in overseas warehouses, were forgeries. In a wide-ranging judgment the Commercial Court concluded that the forgery did not provide a defence of common mistake to a seller who supplied the receipts in performance of contracts for the sale of the nickel. The decision illustrates the limited scope for the doctrine of mistake to operate in commercial contracts, because the contract terms will often allocate risk (expressly or impliedly) for the circumstances that give rise to the relevant mistake. The decision also considered whether a party’s standard terms can exclude or limit tortious liability for misstatement, and the legal effect of a warehouse receipt. Written by Seb Oram, barrister, at 3PB Barristers.
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