P was made redundant by D, who, through regulatory bodies, made false accusations that P was dishonest, which prevented P from obtaining employment. HL held that a duty to take care arises upon an assumption or undertaking of responsibility by the defendant towards the plaintiff, coupled with reliance by the plaintiff on the exercise by the defendant of due care and skill. Specifically, an employer who provides a reference in respect of one of his employees to a prospective future employer will ordinarily owe a duty of care to his employee in respect of the preparation of the reference.
Lord Goff: the employee is relying on D to exercise due care (and their special knowledge of him) in making the reference and is generally made upon the request of the employee. Therefore the requirements are satisfied.
Lord Woolf: The duty was to avoid making untrue statements negligently or expressing unfounded opinions even if honestly believed to be true or honestly held. He says that the harm is obviously reasonably foreseeable, while proximity is clear from the parties’ relationship + neighbourhood test applies here. Re fair, just and reasonable, it has been recognised that where the relationship is “akin to a contract” (see Lord Devlin in Hedley i.e. where “but for the absence of consideration, there would be a contract”) a duty can be imposed. In such a situation the social/professional context is irrelevant. Since there are no problems regarding policy, the duty can be imposed.
NB All lords, except Lord Goff, simply applied Caparo, whereas he used the “assumption of responsibility” approach.