Negligent misstatement—defences and remedies
Produced in partnership with Professor Richard A Buckley
Negligent misstatement—defences and remedies

The following Dispute Resolution guidance note Produced in partnership with Professor Richard A Buckley provides comprehensive and up to date legal information covering:

  • Negligent misstatement—defences and remedies
  • Disclaimers of liability for negligent misstatement
  • Unfair Contract Terms Act 1977 and disclaimers of liability for negligent misstatement
  • Contributory negligence as a defence to negligent misstatement
  • Ex turpi causa defence to negligent misstatement
  • Choice of remedy—action under Hedley Byrne or the Misrepresentation Act 1967?
  • Personal liability of company director for negligent misstatement by a company
  • Negligent misstatement—defences in financial mis-selling claims
  • Public policy immunity unlikely to succeed as a defence to negligent misstatement?
  • Defending negligent misstatement claims—practical considerations

There are a number of ways in which liability for negligent misstatement may be avoided and/or limited. For details on founding a claim of negligent misstatement, see Practice Note: Negligent misstatement—founding a claim.

For guidance generally on clauses seeking to limit or exclude liability, see Practice Notes:

  1. Misrepresentations—excluding and limiting liability for them

  2. Contractual estoppel

  3. Contractual estoppel—the authorities

Disclaimers of liability for negligent misstatement

Liability for negligent misstatement can be disclaimed if the statement is accompanied by a form of words which makes the intention to disclaim clear.

In Hedley Byrne v Heller the defendants stated that their advice was given 'without responsibility' and this was held to be effective to negate liability for negligence which would otherwise have arisen.

It is important that the words chosen are express and unambiguous: the court will not be prepared to identify a disclaimer as a matter of inference (Box v Midland Bank).

Third parties

The mere fact that the situation is one involving a third party will not necessarily make it impracticable for liability to be disclaimed.

If, as will often be the case, a written document is involved, an appropriate clause can be included in it.

For an example of what has become essentially a standardised use of disclaimer clauses, the so-called 'Bannerman clause' in auditors' letters of engagement named after the decision in Royal Bank of