Henderson v Merrett

The Jolly Contrarian Law Reports Our own, snippy, in-house court reporting service. →Go uptown Editorial Board of the JCLR: Managing Editor: Lord Justice Cocklecarrot M.R. · General Editor: Sir Jerrold Baxter-Morley, K.C. · Principle witness: Mrs. Pinterman Common law | Litigation | Contract | Tort | Click ᐅ to expand: Case notes Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Henderson v Merrett Syndicates Ltd [1994] UKHL 5 is a leading case concerning concurrent liability in contract and tort. It concerned a Lloyd’s syndicate which shipped heavy losses as a result of insurance claims following hurricane damage in the US. Mr Henderson was one of the Lloyd’s names who had to personally cover unprecedented losses suffered by a syndicate of which he was a member. He sued the syndicate’s underwriting agents, Merrett Syndicates, for negligent mismanagement of the investment fund. Henderson was not in a direct contractual relationship with Merrett — at least it wasn’t clearly in one.

That rabble-rouser Lord Goff of Chievely, adderessing the feasibility of concurrent liability in contract and tort (emphasis mine):

“So far as Hedley Byrne v Heller itself is concerned Mr. Kaye reads the speeches as restricting the principle of assumption of responsibility there established to cases where there is no contract; indeed, on this he tolerates no dissent, stating (at p. 706) that “unless one reads Hedley Byrne with deliberate intent to find obscure or ambiguous passages” it will not bear the interpretation favoured by Oliver J. I must confess however that, having studied yet again the speeches in Hedley Byrne [1964] A.C. 465 in the light of Mr. Kaye’s critique, I remain of the opinion that Oliver J.’s reading of them is justified. It is, I suspect, a matter of the angle of vision with which they are read. For here, I consider, Oliver J. was influenced not only by what he read in the speeches themselves, notably the passage from Lord Devlin’s speech at pp. 528-529 (quoted above), but also by the internal logic reflected in that passage, which led inexorably to the conclusion which he drew. Mr. Kaye’s approach involves regarding the law of tort as supplementary to the law of contract, i.e. as providing for a tortious liability in cases where there is no contract. Yet the law of tort is the general law, out of which the parties can, if they wish, contract: and, as Oliver J. demonstrated, the same assumption of responsibility may, and frequently does, occur in a contractual context. Approached as a matter of principle, therefore, it is right to attribute to that assumption of responsibility, together with its concomitant reliance, a tortious liability, and then to enquire whether or not that liability is excluded by the contract because the latter is inconsistent with it. This is the reasoning which Oliver J., as I understand it, found implicit, where not explicit, in the speeches in Hedley Byrne. With his conclusion I respectfully agree. But even if I am wrong in this, I am of the opinion that this House should now, if necessary, develop the principle of assumption of responsibility as stated in Hedley Byrne to its logical conclusion so as to make it clear that a tortious duty of care may arise not only in cases where the relevant services are rendered gratuitously, but also where they are rendered under a contract. This indeed is the view expressed by my noble and learned friend Lord Keith of Kinkel in Murphy v Brentwood District Council [1991] 1 AC 398, 466, in a speech with which all the other members or the Appellate Committee agreed.”

See also

• Hedley Byrne v Heller
• Tai Hing Cotton Mill v Liu Chong Hing Bank
• Concurrent liability
• Contractual negligence