Merrett v Babb [2001] QB 1174

• Plaintiff applied to X for a mortgage to buy a house. X got Defendant, a surveyor, to value the house and supplied a copy of the report, omitting all references to Defendant, to Plaintiff. Relying on the report, Plaintiff went ahead and bought the house.

• The house turned out to be of much less value than the report claimed and Plaintiff sued Defendant for tort.

• CA allowed their claim since Defendant had assumed responsibility towards Plaintiff by signing the report and since he knew that it would be relied upon by Plaintiff, a duty of care existed. 

May LJ

• In cases of economic loss caused by negligent misstatement: The Henderson strand is an alternative to the Caparo strand in economic loss cases.

• Henderson requires reliance + “whether the defendant is to be taken to have assumed responsibility to the claimant to guard against the loss for which is damages are claimed.”

• He says that “assumption of responsibility” is really another way of saying “duty of care” so that really there is no difference between the strands, i.e. an ordinary Caparo test applies to economic loss cases, as demonstrated by the approach of Lord Griffith’s speech in Smith v Bush. 

Aldous LJ (dissenting)

• The correct interpretation of the law is Lord Steyn’s (above). Given this, she could not have reasonably relied on him, having had no dealing with him personally. 

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