Liability for References: The House of Lords and Spring v Guardian Assurance

DOIhttp://doi.org/10.1111/j.1468-2230.1995.tb02031.x
Published date01 July 1995
Date01 July 1995
CASES
Liability for References: The House of Lords and
Spring
v
Guardian Assurance
Tom Allen"
Introduction
In
Spring
v
Guardian Assurance,'
the House of Lords considered the question of
negligence and pure economic loss once again. Until recently, it appeared that the
courts were likely to dismiss such claims unless the facts fell within an established
category of liability. Yet in
Spring,
the House of Lords held that an employer owes
a former employee a duty to prepare a reference with reasonable care. The
decision is important beyond the immediate situation involving employers, as it
suggests that there may be scope for extending negligence to other situations
involving harm caused by statements made to a third party. More generally, it
suggests that the House of Lords is more willing to impse duties of care for pure
economic loss than it was in the
post-Anns
v
Merton
era.
Spring
also
confirms
that negligence may be reasserting itself as the area of liability in the common law
where judicial creativity is permitted and substantive justice is done. In this, it is
not unique. In
White
v
Jones,3
the House of Lords held that a testator's solicitor
owes a duty of care to potential beneficiaries and, in
Henderson
v
Merrett
Syndicates Ltd,4
it held that Lloyd's agents owed a duty of care to Names. In
White
v
Jones
and
Spring,
in particular, the emphasis on achieving a measure of
substantive justice was quite pronounced. But
Spring
does not merely confirm the
trend in these other cases; it also shows that there
is
no unanimity on the test for the
duty of care.
White
v
Jones
and
Henderson
v
Merrett Syndicates
rely extensively
on
Hedley Byrne
&
Co
v
Heller
&
Partners Ltd5
and the 'voluntary assumption
of responsibility' as the source of the duty of care. Indeed, Lord Goff has gone
so
far
as to say that, in general, there can be no liability in negligence for pure
economic
loss
unless there has been a voluntary assumption of responsibility.'j
By contrast, three of the Law Lords in
Spring
based their speeches on Lord
Bridge's test, found in
Caparo Industries plc
v
Dickman.I
The
facts
In
Spring,
the plaintiff had been an insurance representative for the defendants,
Guardian Royal Exchange Assurance, and several associated companies. The
*University of Newcastle Upon
Tyne.
1
[1994]
3 WLR 354.
2 [1978] AC 728.
3
[1995]
2
WLR
187.
4
[1994] 3 WLR 761.
5
[1964]
AC
465
(HL).
6
Spring, supra
n
1,
at p
367;
White
v
Jones, supra
n
3,
at p
1%;
cf
Henderson
v
Merrett Syndicate,
supra
n
4,
at p
776.
@
The Modem Law Review Limited
1995
(MLR
58:4,
July). Published by Blackwell Publishers,
108
Cowley Road,
Oxford
OX4
1JF
and
238
Main Street, Cambridge, MA
02142,
USA.
553

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