Caparo Industries plc vs. Dickman || Case Summary ||[1990] 2 AC 605 (UK) || Negligence and Duty of Care

Negligence and Duty of Care

FACTS

In Caparo Industries plc vs. Dickman, Caparo Industries purchased shares in Fidelity plc relying on annual accounts prepared by Dickman, an auditor. The accounts turned out to be inaccurate. Caparo sued Dickman for negligence.

ISSUES

1. Did the auditor owe a duty of care to Caparo?

2. What criteria should courts use to determine the existence of a duty of care in negligence?

RELEVANT LEGAL PROVISIONS

Tort Law (Negligence): Focuses on the existence and breach of a duty of care.

JUDGEMENT

The House of Lords held that Dickman did not owe a duty of care to Caparo.

KEY ASPECTS

1. Introduced the three-part test for duty of care:

2. Foreseeability of harm

3. Proximity between parties

4. Whether it is fair, just, and reasonable to impose a duty

IMPACT OF THE JUDGEMENT

1. Became the leading case for establishing duty of care in negligence.

2. Emphasized caution in extending liability to avoid open-ended claims.

CONCLUSION

Caparo v. Dickman refined negligence law by articulating a clear framework for duty of care, still widely followed in tort jurisprudence.

Vinita Pathak