Hedley Byrne & Co Ltd v. Heller & Partners Ltd [1963] 2 All ER 575
A bank contacted a merchant bank in confidence, and on the basis that no responsibility would be assumed by the merchant bank for any opinion given, regarding the financial status of E Limited. The merchant bank opined that it was good. Months later the bank contacted the merchant bank again asking if it thought E Limited was financially respectable, once again the answer was positive. These communications ended up the bank’s customers, the appellants, who subsequently entered contract with E Limited. The result was a huge loss for the appellants as E Limited quickly liquidated.
The appellant’s sued the merchant bank for damages. Held, no duty of care was owed because the opinion was given with a disclaimer. On the other hand, if in the ordinary course of business, a person seeks advice from another, who is not under contractual or fiduciary obligation to give advice, in circumstances in which a reasonable man so asked would know that he was being trusted, or that his skill or judgment was being relied on, and the person asked chooses to give the information or advice without clearly so qualifying his answer as to show that he does not accept responsibility, then the person replying accepts a legal duty to exercise such care as the circumstances require in making his reply; and for a failure to exercise that care an action for negligence will lie if damage results.
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