TORT LAW Essay Example | Topics and Well Written Essays - 1500 words

TORT LAW - Essay Example Considering the fact that the question mentions Fred being surprised of the large bill from the Inland Revenue for capital gains tax, I suppose that he has listened to Paul’s advice and sold some of his stocks and shares. Fred’s selling some of his stocks and shares and later on, receiving a large bill for capital gains tax is a direct consequence of Paul’s advice which stated that selling some shares and stocks would help Fred avoid this tax. Due to the untrue information, Fred sold his shares and stocks and still received a large bill, which caused financial losses to him The rules of breach of duty are appropriate. Breach of duty occurs when the defendant owed a duty of care and his actions were lower than the reasonable standard. Smith &Keenan (2010, p.464) state that the test of a reasonable man should be applied to individuals â€Å"who have held themselves out as possessing a particular skill†2 as to average specialist in that domain. For example, a s in Fred’s case, Paul – recommending himself as returning a small accountancy firm, which specializes in tax and other investment matters– was expected to act as an average accountant. ... In Hedley Byrne v. Heller (1963), the Court held that â€Å"the relationship between the parties was "sufficiently proximate" as to create a duty of care. It was reasonable for them to have known that the information that they had given would likely have been relied upon †¦ This would give rise to a "special relationship", in which the defendant would have to take sufficient care in giving advice to avoid negligence liability.†3 In this case, Paul’s advice, as coming from a professional was equivalent to a statement upon which the customer (in this case – Fred) would rely on. In Rowley & Ors v Secretary of State for Department of Work and Pensions (2007) the Court held that â€Å"a solicitor owes a duty of care in tort because, like any professional person, he or she voluntarily assumes responsibility towards an individual client†4, which applies to the case of Fred v. Paul. If we were to apply the test established in Caparo v Dickman (1990), it would be clear that the facts of Fred’s situation do fall within this case: 1. â€Å"The adviser was aware that the advice was required for a purpose† 5 - Paul was aware that the advice was necessary in order for Fred to fill his tax forms and avoid large bills 2. â€Å"The adviser knew that the advice was to be communicated to the advisee†6 - 3. â€Å"It was known that the advice will be acted upon by the advisee without independent injury†7- generally, such kind of professional advice is necessary in order for the person who asks for it to act upon it 4. â€Å"It was acted upon the advice† 8 - relying on Paul’s advice, Fred sold his shares and stocks. Even when applying this test, â€Å"There must be a limit to liability and no duty will be imposed unless it is just in all the circumstances.†9 According to Winfield &