The doctrine of assumption of responsibility is the engine behind most modern professional negligence claims in tort. It answers the question a professional indemnity policy is written to respond to: when does a professional owe a duty of care to a person who has suffered pure economic loss, in circumstances where contract alone would not reach the loss? A duty arises where the professional has voluntarily assumed responsibility for the task, the claimant has reasonably relied on that assumption, and the relationship is close enough for the law to treat the professional as accountable.
The starting point is Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465. Before Hedley Byrne, English law was reluctant to recognise a tort duty for careless words causing pure economic loss. The House of Lords held that where a party with special skill undertakes to provide information or advice to another, knowing the other will rely on it, a duty of care can arise even without a contract. Two ingredients emerged: a voluntary assumption of responsibility by the defendant, and reasonable reliance by the claimant. On the facts, a disclaimer defeated the claim, but the principle was set.
Thirty years later, Henderson v Merrett Syndicates Ltd [1994] UKHL 5 extended the doctrine beyond statements to services generally. Lord Goff held that where a professional holds themselves out as possessing special skill, and undertakes to apply that skill for another in circumstances where reliance is reasonable, a tort duty arises concurrently with any contractual duty. The Names at Lloyd's could sue their managing agents in tort as well as in contract. Henderson settled the concurrent-duties point: a professional owes duties in contract and tort together, and the client may usually choose which to pursue. See the Apex entry on Henderson v Merrett and concurrent duties.
In White v Jones [1995] 2 AC 207 the House of Lords held that a solicitor instructed to prepare a will owes a duty of care to the intended beneficiaries. On orthodox principles the beneficiaries could not sue: they were not the client, they had no contract, and they had not relied on anything the solicitor had said. The majority nonetheless deemed the solicitor to have assumed responsibility to the beneficiaries because the entire purpose of the retainer was to confer a benefit on them. Without a remedy the negligent solicitor would escape liability and the loss would fall on the person the transaction was designed to help. The extension is pragmatic, but it is settled law.
Steel v NRAM Ltd [2018] UKSC 13 tightened the reliance element. A solicitor acting for a borrower sent an email to the lender containing an inaccurate statement about which security was being released. The lender did not check. The Supreme Court held that no duty was owed. Reliance must be reasonable, and it is not reasonable for a commercial lender with its own legal resources to rely, unchecked, on an incidental statement by the borrower's solicitor about the lender's own security. Assumption of responsibility is not a rubber stamp: the claimant must show reliance a court will treat as reasonable and that the defendant could foresee.
Playboy Club London Ltd v Banca Nazionale del Lavoro SpA [2018] UKSC 43 addressed a subtler point. A bank gave a credit reference for a customer, requested by an agent acting for an undisclosed principal (the Club). The reference was inaccurate. The Supreme Court held that the bank owed no duty to the Club because the reference had not been given to the Club as an identifiable party. Hedley Byrne requires the defendant to have accepted responsibility to a specific person or identifiable class. General availability of information is not enough. The lesson: a duty runs to the party the professional knew, or should have known, would rely on the work.
Worked example (illustrative only). A solicitor drafts a will in 2015 for an elderly client. The drafting contains an error: a gift to the client's niece is described in terms that fail on the client's death. The client dies in 2022. The niece, who was never a client of the firm and never spoke to the solicitor, discovers she has lost the intended inheritance. On a pure Hedley Byrne analysis the niece would fail: she never received any advice, never relied on anything the solicitor said, and had no contact with the firm. Following White v Jones, however, the solicitor is treated as having assumed responsibility to the intended beneficiary because the whole purpose of the retainer was to confer the gift on her. The niece succeeds in tort. The solicitor's PI policy responds via the SRA Minimum Terms and Conditions, clause 4 of which requires cover for civil liability arising from the practice of the firm. See the Apex sector guide on solicitors' PI insurance and the guide for financial advisers for a parallel treatment of third-party reliance claims.
Assumption of responsibility is not a courtroom abstraction. It shapes the risks a broker sees every week: whether a lender can sue a valuer, whether an intended beneficiary can sue a will-drafting solicitor, whether a purchaser can sue a surveyor engaged by the seller, whether an accountant's report circulated beyond the addressee gives rise to a duty. Each question is answered by asking whether the professional voluntarily accepted responsibility, whether reliance was reasonable and foreseeable, and whether the professional knew or should have known that this claimant, or a class including them, would rely on the work.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.