Caparo Industries Plc v Dickman [1990] : Case Analysis

Caparo Industries Plc v Dickman: Case Summary

Caparo Industries purchased shares in Fidelity Plc with faith they would be successful as the accounts that the company stated showed the company had made a pre-tax profit of £1.3 million. However these accounts were not correct and in reality Fidelity had made a loss of £400,000. Caparo claimed Fidelity was negligent, however no duty of care was owed due to the insufficient proximity between Caparo and Fidelity. Caparo v Dickman is a key authority to cite when making submissions about proximity (which tends to be an argument raised by defendants in many negligence proceedings).

Caparo Industries Plc v Dickman: Download Judgemnt

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Caparo Industries Plc v Dickman: Case Analysis

This case is key in establishing a tripartite test for the existence of a duty of care. According to the House of Lords, in order for a duty of care to arise in negligence:

  1. The harm must be reasonably foreseeable as a result of the Defendant’s conduct;
  2. the parties’ relationship must be proximate; and
  3. it must be fair, just and reasonable to impose liability.

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