Legal Case Summary
Morgan Crucible Co v Hill Samuel & Co [1991] Ch 295.
Facts
The plaintiffs were bidding to take over a third party company, which was being advised by the defendants. During the bidding process, the defendants made a number of negligent misrepresentations to the third party company, which resulted the plaintiffs suffering a loss. The plaintiffs sought to recover their losses from the defendants in the tort of negligence, arguing that despite the absence of any contractual relationship, they were owed a duty of care by the defendant advisers.
Issues
The issue was whether a party advising a company owed a duty of care to other companies (with whom those receiving the advice subsequently dealt) to ensure that the advice provided was accurate.
Decision / Outcome
The Court of Appeal held that a duty of care did exist on the facts of the case. Key features which were relevant in determining the existence of a duty of care were the fact that the plaintiff’s identity and the nature of their business/ transaction with the third party company was known to the defendant at the time the advice was provided.
However, the Court also suggested that in such a case the bar below which conduct will be considered ‘negligent’ is relatively low. It is not sufficient to show that the information was misleading or highly misleading, as the defendants should not be treated as having warranted the accuracy of the information. Rather, it is necessary to demonstrate that they failed to exercise due care.
Updated 20 March 2026
This summary accurately reflects the decision in Morgan Crucible Co v Hill Samuel & Co [1991] Ch 295, a Court of Appeal judgment that remains good law. The case continues to be cited as an important authority on the circumstances in which a duty of care in negligent misstatement may arise in the context of takeover bids, particularly where the claimant’s identity and the nature of the transaction are known to the defendant adviser. No subsequent legislation or appellate authority has overruled or substantially undermined the principle established. Readers should note, however, that the broader law on negligent misstatement and assumption of responsibility has continued to develop through cases such as Caparo Industries plc v Dickman [1990] 2 AC 605 (decided shortly before this case and forming part of its backdrop) and later authorities including NRAM Ltd v Steel [2018] UKSC 13, which refined the test for assumption of responsibility. This article should therefore be read alongside those later developments for a complete picture of the current law in this area.
