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Merrett v Babb

[2001] QB 1174

Case summary last updated at 19/01/2020 14:54 by the Oxbridge Notes in-house law team.

Judgement for the case Merrett v Babb

P applied to X for a mortgage to buy a house. X got D, a surveyor, to value the house and supplied a copy of the report, omitting all references to D, to P. Relying on the report, P went ahead and bought the house. The house turned out to be of much less value than the report claimed and P sued D for tort. CA allowed their claim since D had assumed responsibility towards P by signing the report and since he knew that it would be relied upon by P, 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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