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Law

Study Notes

Key Case | Hedley Byrne v Heller and Partners (1964) | Negligence - Pure Economic Loss

Level:
A Level, BTEC Level 3
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

This case established that it may be possible to make a claim in negligence for pure economic loss where there is a special relationship assuming responsibility between two parties, despite them not being in a contract.

CASE SUMMARY

Claimant: Hedley Byrne, an advertising company

Defendant: Heller and Partners, merchant bankers and referees for Easipower

Facts: Hedley Byrne were interested in working with Easipower, a company they had not previously worked with, so they sought a financial reference from their bank. Heller and Partners provided a satisfactory reference for Easipower, which turned out to be incorrect and inappropriate. When Hedley Byrne suffered losses following non-payment from Easipower, they sought a claim against Heller and Partners.

Outcome: Not liable – there was an effective disclaimer in this case.

Legal principle: There was an actionable cause in negligence, where there is special relationship in certain circumstances this could give rise to a claim for purely economic loss, special relationships where there is an assumption of responsibility, albeit no contract.

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