Business Law in Australia (Tort)

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Case Study
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The case of Donoghue v Stevenson1 established the principle of the duty of care. The House of Lords acknowledged a new relationship of a duty of care between the manufacturers and the customers who utilise the products. This ruling however is considered to be narrow in its scope…

Introduction

Since such affected people are described as neighbours, the doctrine of duty is usually described as the neighbour principle. For the purpose of this doctrine a person's neighbours are individuals who are directly and proximately affected by act of commission or omission of that person.
Subsequently, most of the developments have taken place in the rule of negligence. These developments have given another definition to the neighbour principle by Lord Wilberforce. In Anns v Merton London2, the House of Lords established a two - stage test. First, there should be an adequate Proximity or neighbourhood relationship in the reasonable observation of the defendant's negligence which would cause damage to the interests of the claimant. If this holds good then a prima facie duty of care becomes apparent. Second, it is essential to determine whether any issues exist, which hinder the applicability of the duty of care that is owed to persons, or that try to negate it wholly, or reduce its scope.
However the two - stage test faced much criticism in respect of its applicability which is broad in its scope. As such the current test of duty of care in the areas of proximity, foresight and fairness in establishing the former had been adopted by the courts. Under this test, claimants were required to establish three aspects which they consider to be a duty of care. ...
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