Pacific Associates v Baxter [1989] 2 All ER 159

• Plaintiff won a contract and Defendant was employed by same group to supervise Plaintiff’s work and report to the employer when Plaintiff would need extra money should it come up against a problem that required it.

• When Plaintiff needed extra money due to an insoluble problem, Defendant wrongly refused to certify making Plaintiff lose large sums as a result (economic loss only).

• There was a disclaimer of liability by Defendant. CA refused Plaintiff’s claim since Defendant had no duty of care to Plaintiff since this was not required by the contract.

• Defendant had not voluntarily accepted having any responsibility to the plaintiffs in the way that they performed their contractual obligations.

  • However it would still have been possible for Defendant to be liable to Plaintiff not to cause economic harm had the 3-steps of Caparo been satisfied, but given the disclaimer clause this was not the case. 

Purchas LJ

• A disclaimer can remove liability in Hedley Byrne type cases. Hedley Byrne type cases require not only the usual proximity but also a “special relationship” (basically a higher degree of proximity)

RELATED CASES

• Caparo v Dickman

• Hedley Byrne v Heller Partners