ACCA F4 - Corp and Business Law (ENG)

Part B The law of obligations  7: The law of torts and professional negligence 107

The development of the Internet has seen the routine selling of domain names to those who wish to buy

them. This has created the opportunity for individuals to set up a website that has the intention of

mimicking an established brand and stealing their customers.

The issue of what is misleading under the tort of passing-off has been the subject of numerous cases, but

it appears that the businesses do have to be very similar indeed. In Stringfellow v McCain Foods GB 1984

the owner of a famous nightclub failed to prevent a manufacturer of long, thin oven chips from calling

their product by the same name When Midland Bank in the UK rebranded as HSBC they were subject to a

passing-off claim from the long established HFC Bank. The case failed on the grounds of there being

insufficient chance of public confusion: HFC Bank v Midland Bank 2000. We shall consider passing-off

further when we look at company names in a later chapter.

1.2.2 Negligence

In simple terms, negligence is the carelessness of an individual or company which causes damage

(physical or financial) to the claimant. Negligent acts tend to be inadvertent or reckless, but not normally

intentional.

2 The tort of negligence

Negligence is the most important modern tort. To succeed in an action for negligence the claimant must

prove that:

 The defendant had a duty of care to avoid causing injury, damage or loss

 There was a breach of that duty by the defendant

 In consequence the claimant suffered injury, damage or loss

2.1 Definition

There is a distinct tort of negligence which is causing loss by a failure to take reasonable care when there

is a duty to do so. This is the most important and far reaching modern tort.

The term negligence is used to describe carelessly carrying out an act and breaking a legal duty of care

owed to another causing them loss or damage.

An article on the tort of negligence appeared in the December 2009 edition of Student Accountant.

2.2 Liability

Any legal person can commit and therefore be liable for a tort providing the three stage test is passed.

This includes, for example, a car driver who injures a pedestrian, or a company that causes death or injury

to a customer. Also, an employer can be vicariously liable for the acts of an employee. This means an

employer may be liable for loss or damage caused by an employee, providing the acts were committed

whilst the employee was performing the duties they were employed to do.

3 Duty of care

In the landmark case of Donoghue v Stevenson 1932 the House of Lords ruled that a person might owe a

duty of care to another with whom they had no contractual relationship at all. The doctrine has been

refined in subsequent rulings, but the principle is unchanged.

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