This problem looks into Susanna’s claims against Figaro, Summy and Angus. She will be claiming compensation in the form of damages for negligent misstatement. In order to evaluate whether these claims are likely to be successful it is necessary to consider the law relating to negligent misstatement. It can be argued that Figaro was deliberately trying to mislead Susanna, as tort of deceit is mentioned in Derry v Peek (1889). It is necessary to prove three elements when bringing a claim against negligence: duty of care, breach of duty and damage, which is the cause of breach of duty and is not to remote. Consideration of these aspects in these stages should be noticed, for example Lord ...view middle of the document...
The House of Lords found that duty of care could arise in some situations where advice was given which resulted in pure economic loss where four conditions were met: a special relationship of trust and confidence; a voluntary assumption of risk; reliance; and that the reliance was reasonable.
Applying the above requirements to the advice given by Figaro to Susanna, although Figaro is Susanna’s former bank manager the advice is being given at a social event. This context is unlikely to give rise to a special relationship. Furthermore the duty of a professional adviser is limited to information or advice which he holds himself out as qualified to giver or which he is in the business of giving. In this case Figaro was a bank manager with an expertise in technology firms rather than a financial adviser with knowledge of shoe and clothing companies. As such it is unlikely that a court would consider that the necessary ‘special relationship’ was present between Susanna and Figaro at the time the advice was given.
It can also be argued that since, Hedley Byrne v Heller (1963) extra obligations of special relationship was presented, based on the reliable trust of the advice that is given. In the case of Caparo v Dickman  the courts narrowed the special relationship; the advice that is being given is for a particular purpose, which is known by the advisee at that moment of time.
The person giving the advice knows the information will be spoken to the advisee, specifically as a member of established class. In order to be used for a specific purpose and the advice is likely to be taken into thought and acted upon without taking independent enquire. Information is acted upon breach of duty which is based upon the standard of care of a person in the position of the person whom is giving the advice, which a high standard is required of auditors or accountants and anyone at a financial professional level. In the case of Susanna, Figaro knew she was planning to invest her money on the business and that she would not have asked anyone else for further advice and he was a expert on technology firms and the news of them having financial difficulties was made clear in the headlines. Also with Figaro’s expertise’s it is likely that he could have known about the fitness belt to record wearers performance as it would be related to technology, which would have made him aware about Nickers financial difficulties as it was widely reported.
In order for Susanna to receive compensation she needs to prove causation. She can argue that she would not have lost her money using the ‘but for test’, In Corn v Kirby Maclean (1952) Lord Denning stated that ‘if you can say that the damage would not have happened, but for a particular fault, then that fault is in fact a cause of damage’. The ‘But for test’ will establish if Figaro did not advice her to invest in Nickers would she have done so and lost her money.
Susanna would have to try and prove that...