BU111 Lecture Notes - Lecture 4: Fiduciary
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Hedley byrne: asks its banker for credit information on easipower . Hedley"s bank: asks heller (easipower"s bank about their credit rating . Heller & partners: respond positively without checking the most recent credit line easipower: asks for an extension of credit from hedley. Hedley byrne sues heller & partners because they gave false information about easipower"s credit rating and gave them a higher endorsement than they deserved. This lawsuit caused the house of lords to design a new tort, which addressed owing a duty of care and causation of damage. Auditors of a company are sued by its shareholders because the audited statements for three previous years were negligently prepared and in reliance upon them they continued to hold their stock. Duty question is decided not just by who the victim is but how the information was used: purpose for which it was given. Lost lawsuit because they said that they used the statements to make personal investment decision.
