Caparo Industries plc v. Dickman [1990]

[1990] 2 AC 605 · House of Lords · United Kingdom

tort lawtort lawprofessional responsibility law

Issue

When does a duty of care arise for negligent misstatement?

Held

No duty was owed to investors for the takeover purpose.

Exam use

Review the ratio and reasoning before applying this case in problem questions.

Summary

Leading UK duty of care case.

Facts

Investors alleged auditors owed them a duty after audited accounts influenced share purchases.

Issue

When does a duty of care arise for negligent misstatement?

Held

No duty was owed to investors for the takeover purpose.

Ratio Decidendi

The Caparo test asks foreseeability, proximity, and fairness for novel duty situations.

Reasoning

Duty requires foreseeability, proximity, and that imposing duty be fair, just, and reasonable.

Essay-Ready Explanation Generator

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Reference to Caparo Industries plc v. Dickman ([1990] 2 AC 605) strengthens a tort law answer because the case reflects the principle that The Caparo test asks foreseeability, proximity, and fairness for novel duty situations. Applied to a problem question, the case should be used after identifying the issue as When does a duty of care arise for negligent misstatement? The stronger essay move is to connect the material facts to the court's holding, then explain whether the present facts support the same conclusion or justify distinguishing the authority.

Significance

Leading UK duty of care case.

Related Cases

No related cases listed.

Exam Tips

Review the ratio and reasoning before applying this case in problem questions.

Revision Checklist

  • Name the issue before discussing facts so the marker sees the legal question immediately.
  • State the holding in one sentence, then use the ratio to explain why the court reached that result.
  • Use the citation and jurisdiction to show why this authority matters for the problem you are answering.
  • Pair this case with one supporting or contrasting authority if the question tests limits, policy, or exceptions.

Sources