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Chapter 3

The limits of the duty of care

In the case of The Nicholas H (Marc Rich & Co v Bishops Rock Marine) 1995,
four tests were laid down which should be followed in determining whether a duty of
care exists.

The issues to be considered are:

 Was the damage reasonably foreseeable by the defendant at the time of the act
or omission?

 Is there a neighbourhood principle or sufficient proximity (closeness) between
the parties?

 Should the law impose a duty of care between the parties i.e. is it fair and
reasonable to do so?

 Is there a matter of public policy which exists or requires that no duty of care
should exist?

The Nicholas H case focused on financial loss, but these tests should also be applied
when determining the duty of care for physical damage cases.

Illustration 2 – Negligence

A was given an iPod for his birthday by his uncle. Due to a design defect, it set
fire to his bedroom and caused damage to carpets and furniture. A was made ill
by smoke inhalation. A is entitled to claim damages from the iPod manufacturer
for:

 Pain and suffering caused by smoke inhalation
 Any loss of earnings whilst he recovers

 The cost of replacing furnishings and redecoration.
He is not entitled to claim the cost of replacing the defective iPod which would
be pure economic loss.

The defect does not give rise to the liability: it is the resultant damage to person
or property.

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