Explain Third-Party Liability and the Tort of Negligent

Question

Explain the Third-Party Liability and the Tort of Negligent Misrepresentation?

Answer 1

Under tort law, potential third-party liability exists to people other than the client who pays for the services and has a contractual relationship with the professional. For instance, accountants may provide a business valuation that will be relied upon by a third party, or architects may design a building in a way that presents risks to subsequent occupants.

Hedley Byrne Co. Ltd. v. Heller & Partners Ltd. (1964) established the principle that professionals are liable for negligent misrepresentation (an incorrect statement made without due care for its accuracy) to third parties whom they could foresee would rely on information or advice they provide. Haig v. Bamford (1976) narrowed that duty to a limited class of persons with whom the professional has a special relationship. Thus the test is not just that users must be foreseeable in a general sense but that they must be specifically foreseeable in relation to a contemplated transaction.