This case provided further detail to the requirements of a special relationship. Liability for negligent misstatement can be established where the defendant is giving advice according to his skill or expertise, communicates that either directly or indirectly to the reliant party, knowing that they will reasonably rely upon it.

CASE SUMMARY

Claimant: Caparo Industries

Defendant: Dickman, chartered accountants and auditors

Facts: Caparo Industries purchased shares in Fidelity Ltd upon the basis of public accounts that had been prepared by Dickman.

Outcome: Not liable

Legal principle: Whilst there was no liability in this case because the accounts were not drawn up with the purpose of informing the claimant’s decision, there was no special relationship with the specific claimant, the courts did outline the three characteristics of establishing a special relationship.