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Hedley Byrne & Co Ltd v Heller & Partners Ltd

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 is an English tort law case on economic loss in English tort law 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,[1] with the only remedy for such losses being in contract law.[2] The House of Lords overruled the previous position, in recognising liability for pure economic loss not arising from a contractual relationship, applying to commercial negligence the principle of "assumption of responsibility".[3]

Hedley Byrne v Heller

House of Lords

28 May 1963

[1964] AC 465, [1963] 2 All ER 575, [1963] 3 WLR 101, [1963] UKHL 4

Lord Reid, Lord Morris of Borth-y-Gest, Lord Hodson, Lord Devlin and Lord Pearce

Katana VentraIP

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Lack of a direct nexus, also known as proximity in negligence law (nor an assumption of responsibility of a type established in law) of duty of care. If so, this would mean none was owed regarding the statements.

Liability was excluded; the header disclaimer used would make it unreasonable to rely on the bank reference/solvency statement, even if the law recognised some degree of duty of care owed.

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 so asked their bank,[a] to get a report from Easipower’s bank, Heller & Partners Ltd., who replied in a letter that was headed,


...Easipower is,


The letter was sent for free. Easipower soon went into liquidation, and Hedley Byrne lost £17,000 (equivalent to 470,000 in 2023) on contracts. Hedley Byrne sued Heller & Partners for negligence, claiming that the information was given negligently and was misleading. Heller & Partners argued:

The court found:


Lord Morris of Borth-y-Gest wrote,[5]


Effectively, the House of Lords had chosen to approve the dissenting judgment of Lord Justice Denning in Candler v Crane, Christmas & Co [1951] 2 KB 164.

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In such normal practices of reliance, in the consumer setting, the court extends Hedley Byrne liability and overrides many disclaimers.

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the relationship between the parties was "sufficiently proximate" as to create a . 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. The relationship was that the plaintiff trusted the defendant with the information and therefore the defendant ought to have been honest

duty of care

however, on the facts, the was sufficient to discharge any duty created by Heller's actions. There were no orders for damages, because,[4]

disclaimer

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[1970] AC 1004, Lord Reid remarked,

Home Office v Dorset Yacht Co

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Negligence

Misrepresentation

English tort law

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Full text of House of Lords decision: BAILII.org

Oxford

Elliott, Catherine; Quinn, Frances (2007). . Longman. ISBN 1-4058-4672-0.

Tort Law

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