So, you
are getting a little worried about whether your client is going to be able to
pay for all the advertising they are placing with you and they have asked you
to do some more. Here's a good idea, why don't you ask your bank to get in
touch with their bank to see if they are good for the money? This is exactly
what an advertising agency called Hedley Byrne did in the late '50's. Thinking
they were safe when their client's bankers responded with "yeah, no
worries" (or words to that effect), they did the work. I expect you can
guess what happened next. Yes, the clients were not good for it. In fact, they
were at that time and known to all parties, the subsidiary of a company that
was already in liquidation. Nevertheless, the bankers (Heller & Partners)
believed that "the company would not undertake any commitments they are
unable to fulfil" (Case citation: Hedley Byrne v Heller [1964] AC 465)
Sadly, it all ended in tears because that is exactly what Easipower did and left Hedley Byrne seriously out of pocket. The problem Hedley Byrne had was that they couldn't sue Easipower because they had gone bust but they had no relationship with Heller & Partners - there was no contract between them. Sometimes, though, you just have to give it a go which they did and they very nearly won as well. The case went right up to the House of Lords and it was decided that although there was no contractual relationship between them, Heller did owe Hedley Byrne a duty of care. The Lords said that if someone possesses a special skill and they apply that skill in the assistance of another person who relies on it, then a duty of care arises. They said that the bank (Heller) had made a negligent misrepresentation and the only thing that saved them having to fork out, was that they had marked their letter "Without Responsibility". The Lords decided that this was enough to let them off the hook.
The lesson here is that if you are in a position of special responsibility and you are asked for information about someone or something that could be relied upon, be very, very careful how you respond as you could be the one who ends up in court. Have a nice day!
Tina Morgan www.john-kennedy.co.uk
Sadly, it all ended in tears because that is exactly what Easipower did and left Hedley Byrne seriously out of pocket. The problem Hedley Byrne had was that they couldn't sue Easipower because they had gone bust but they had no relationship with Heller & Partners - there was no contract between them. Sometimes, though, you just have to give it a go which they did and they very nearly won as well. The case went right up to the House of Lords and it was decided that although there was no contractual relationship between them, Heller did owe Hedley Byrne a duty of care. The Lords said that if someone possesses a special skill and they apply that skill in the assistance of another person who relies on it, then a duty of care arises. They said that the bank (Heller) had made a negligent misrepresentation and the only thing that saved them having to fork out, was that they had marked their letter "Without Responsibility". The Lords decided that this was enough to let them off the hook.
The lesson here is that if you are in a position of special responsibility and you are asked for information about someone or something that could be relied upon, be very, very careful how you respond as you could be the one who ends up in court. Have a nice day!
Tina Morgan www.john-kennedy.co.uk
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