Lecture 3 - Negligent Misstatement, Remedies

• Pure economic loss


  Loss of profit/loss of value
• English Courts tend not to allow recovery for pure economic loss
• Issues of pure economic losses


  • They are too remote
  • Lack of proximity
• In New Zealand recovery for pure economic loss is not precluded but the courts may be more hesitant to find a duty of care where the losses are purely economic
• In both England and New Zealand recovery for economic loss is clearly recoverable in the case of negligent misstatement
• Professionals or public bodies who can make negligent misstatements

  • Accountants and auditors
  • Architects and engineers
  • Solicitors and barristers
  • Banks
  • Government agencies and public bodies
• Negligent misstatement


  Historically the loss resulting from negligent misstatement was not actionable in the absence of any contractual or fiduciary relationship
• Later cases emphasized policy reasons for restricting liability for negligent words
• The test for liability for negligent words (the New Zealand approach)

  Is it fair, just and reasonable to require the defendant to take reasonable care to avoid causing the plaintiff damage of the kind for which compensation is being sought?
• Proximity


  • Assumption of responsibility which may be actual or deemed
  • Foreseeability that plaintiff will rely on the statement
  • Actual and reasonable reliance by the plaintiff
  • Statement made for a particular purpose or person
• Disclaimers


  Defendants can avoid liability for negligent statements where they indicate they are made without responsibility, provided the disclaimer is clear and unambiguous and reasonable notice is given
• Remedies for Negligence


  • Compensatory damages
  • Aggravated Damages
  • Exemplary damages
  • Nominal Damages/Contemptuous damages
• Contributory Negligence


  • It is a partial defence only (it cannot be used to fully escape liability)
  • The court will reduce compensation considering the plaintiff's contribution to the loss suffered
• The Woodhouse Report (1967) identified problems with the tort/litigation based system and proposed principles for the ACC scheme
• ACC


  • Provides no fault-based compensation for personal injury including treatment and expenses, loss of earnings, and lump sum compensation
  • Covers all New Zealand citizens, residents and temporary visitors
  • Removes the right to sue for compensatory damages for accidental personal injury
• Definition of Personal Injury under ACC

  • A physical injury, death, or mental injury caused by a physical injury
  • May be caused by an accident, work-related gradual process, disease or infection, or a treatment injury
• ACC does not cover illness, sickness, contagious diseases, personal injury caused wholly by aging, and psychological harm/mental injury in some circumstances
• It is still possible to pursue a common law action for purely psychological harm not covered by ACC, and for secondary mental injury relating to an accident to somebody else
• How ACC is funded

  • Employers
  • All workers
  • Petrol levy and motor vehicle licensing fee
  • General taxation