BSB250 · Business Citizenship
Negligence I: Duty of Care
This chapter is gate one of a negligence claim: before you ever argue carelessness, you must show the defendant owed the plaintiff a duty of care. You learn the neighbour principle from Donoghue v Stevenson (adopted in Australia in Grant v Australian Knitting Mills), the three routes to a duty — established category, the novel-case test (reasonable foreseeability + salient features), and negligent misstatement — and how foreseeability is kept deliberately broad at this stage. It matters because BSB250's open-book exam is answered in ILAC, and a clean, authority-cited duty analysis is the foundation every negligence problem is built on.
What this chapter covers
- 01Negligence as its own 'compartment' (rights additional to contract, no privity)
- 02The neighbour principle: Donoghue v Stevenson and Grant v AKM
- 03The negligence spine: duty then breach then causation (then defences)
- 04Route 1 - established categories where duty is presumed
- 05Route 2 - the novel-case test: reasonable foreseeability + salient features
- 06'Ripples in a pond' and the foreseeable plaintiff (Bourhill v Young limit)
- 07The three salient features: control, vulnerability, responsibility (Perre v Apand)
- 08Route 3 - negligent misstatement, pure economic loss and indeterminate liability
Does a duty of care exist? (ILAC - duty only)
- +1Issue: state the single duty question - does Priya (a coach) owe Theo (a paying beginner she is supervising) a duty of care in respect of how she runs the session? Frame it as the relationship question, not the carelessness question.
- +1Law - Route 1 (category): a duty is presumed where the relationship falls within an established category; cite the authority. A skilled coach supervising a paying participant is closely analogous to the recognised professional -> client duty (Hill v Van Erp) and the skilled-practitioner duty in Rogers v Whitaker.
- +1Law - Route 2 (novel-case test, in the alternative): if treated as novel, a duty arises where (i) it is reasonably foreseeable that SOME harm to SOMEONE in the plaintiff's position could result ('ripples in a pond'; outer limit Bourhill v Young), and (ii) the salient features point to a duty - control, vulnerability and responsibility (Perre v Apand).
- +1Application: the category route is strongest - Priya holds herself out with special skill and Theo is a paying participant following her instruction, so duty is presumed. Even on the novel test it is met: injury to a beginner in a supervised dive is plainly foreseeable (Theo is squarely in the zone of risk, not a remote bystander as in Bourhill); Priya has control over the session, Theo is a vulnerable novice depending on her, and a first-timer cannot reasonably self-supervise a dive.
- +1Conclusion: give a defensible call on the duty question only - Priya owes Theo a duty of care, established by the professional/client category and, in the alternative, by the foreseeability + salient-features test. Flag that breach, causation and any waiver-based defence are later, separate gates.
Key terms
- Negligence
- A tort: a failure to take reasonable care that causes reasonably foreseeable harm to another. The plaintiff must prove three elements in order - duty, breach and causation - before any defence is considered.
- Duty of care
- The first element of negligence: a legal obligation, arising from the relationship between the parties, to take reasonable care not to cause foreseeable harm to the plaintiff. It can arise through an established category or, for novel cases, the general common-law test.
- Neighbour principle
- From Donoghue v Stevenson: you owe a duty to your 'neighbours' - persons so closely and directly affected by your act that you ought reasonably to have them in contemplation. Adopted in Australia in Grant v Australian Knitting Mills.
- Reasonable foreseeability (at duty)
- The duty-stage test: was it reasonably foreseeable that SOME harm to SOMEONE in the plaintiff's position could result from the conduct? Kept deliberately broad - think 'ripples in a pond' - with the unforeseeable, remote plaintiff falling outside it (Bourhill v Young).
- Salient features
- Factors used in novel cases (alongside foreseeability) to decide whether a duty should be recognised. BSB250 uses three: the defendant's control over the risk, the plaintiff's vulnerability, and whether the plaintiff should take responsibility for their own wellbeing (Perre v Apand).
- Negligent misstatement
- A duty for careless words/advice causing pure economic loss. Fenced by stricter tests because of the fear of indeterminate liability - the direct-advice test (Shaddock) and the harder indirect-advice test (Esanda Finance, where the duty was denied).
Negligence I: Duty of Care FAQ
What are the three elements of a negligence claim and in what order?
Duty of care, then breach, then causation (leading to actual damage), and only then defences. They are proved in that order, and failing any gate stops the claim there. This chapter covers gate one - duty - while breach and causation come next.
How do I decide if a duty of care exists?
Try the category route first: if the relationship is a recognised one (e.g. driver/road user, doctor/patient, employer/employee, manufacturer/consumer, occupier/entrant, professional/client), the duty is presumed - cite the authority and move on. If the situation is novel, run the general test: reasonable foreseeability that some harm to someone in the plaintiff's position could result, plus the salient features (control, vulnerability, responsibility).
What is the neighbour principle from Donoghue v Stevenson?
It says you must take reasonable care to avoid acts you can reasonably foresee would injure your 'neighbours' - people so closely and directly affected by your conduct that you ought to have them in mind. It is the foundation of the modern tort of negligence and was adopted in Australia in Grant v Australian Knitting Mills.
Does foreseeability mean the same thing at every stage of negligence?
No - it does different work at each gate. At duty it is broad (was some harm to someone foreseeable?); at breach it narrows to the kind of carelessness a reasonable person would guard against; at damage it narrows again to whether the actual kind of harm was foreseeable. Keep the duty-stage version broad.
Why is negligent misstatement treated more cautiously than physical injury?
Careless words can be relied on by an indeterminate class of people for an indeterminate amount, so courts fence the duty to avoid 'indeterminate liability'. For direct advice the Shaddock test (business/serious matter, known reliance, reasonable reliance) applies; for advice passed through an intermediary the harder Esanda test applies, and there the duty was denied.
Exam move
Drill the duty analysis as a fixed ILAC rail, because BSB250's open-book exam rewards structure over recall. For any negligence fact pattern, first ask the category question - if a recognised relationship (driver, doctor, employer, manufacturer, occupier, professional, director, agent) fits, cite the one authority, say the duty is presumed, and bank the time for breach and causation. Only reach for the general test when the relationship is genuinely novel: state reasonable foreseeability of SOME harm to SOMEONE (with the Bourhill limit), then walk the three salient features (control, vulnerability, responsibility, Perre v Apand). Switch to the misstatement tests (Shaddock direct / Esanda indirect) the moment the loss is purely economic from careless words. Discipline the foreseeability language - keep it broad at duty and resist arguing carelessness here; cite an authority for every rule, and resolve duty cleanly before moving to the later gates.
