In Hedley Byrne & Co v Heller & Partners, the House of Lords recognised that a duty of care could arise in respect of negligent misstatements causing pure economic loss. Why did the claimant's action nevertheless fail?

Correct answer: D) The bank had given its reference 'without responsibility', which effectively disclaimed liability

Explanation

Hedley Byrne established that a duty can arise where there is a special relationship, the defendant assumes responsibility and the claimant reasonably relies on the statement. On the facts the bank's disclaimer prevented any assumption of responsibility, so the claim failed. The absence of payment did not in itself prevent a duty arising, and the reference had in fact been inaccurate.