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NEGLIGENCE AND SCOPE OF DUTY POST SAAMCO: OLD IDEAS, NEW LOOK

Lloyd's Maritime and Commercial Law Quarterly

NEGLIGENCE AND SCOPE OF DUTY POST SAAMCO: OLD IDEAS, NEW LOOK

AC Walton*

MBS v Grant Thornton
Khan v Meadows

1. Introduction

It is widely accepted that there is a need to control negligence liability, whether it be on the grounds of justice or practicality.1 To achieve this end, the English courts have fashioned various analytical tools: duty, causation, and remoteness.2 Despite being described as “continually running into one another”,3 they are nevertheless conceptually distinct and limit negligence liability in different ways. Whilst breaking the negligence enquiry down and then attaching conceptual labels is justifiable, it has led to areas of great complexity. Often concepts and analytical tools are conflated, and it is not always easy to discern on what basis a defendant was (or was not) liable.
Nowhere has this been more apparent than in the wake of Lord Hoffmann’s leading speech in South Australia Asset Management Corp v York Montague Ltd 4 (“SAAMCO”) Here his Lordship ostensibly provided a new analytical tool for determining recoverable and irrecoverable loss in cases of negligent professional advice: if a loss fell outside the scope of a defendant’s duty of care, it was not recoverable by the claimant. Utilising the now infamous counterfactual—the doctor providing advice to a mountaineer with an injured knee—and drawing a distinction between “advice” and “information”, Lord Hoffmann explained that, just because professional advice puts a client in a position where it may suffer loss which is foreseeable, this does not necessarily mean that the foreseeable loss can be recovered in full, were it to materialise. This was the so-called “SAAMCO principle”. In the intervening 25 years, despite having been considered and affirmed at the highest level,5 the SAAMCO principle has proved difficult to apply in practice,6 conceptually elusive, and never comfortably located within the established negligence framework.7

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