Seddon v The Driver & Vehicle Licensing Agency (DVLA)

A public authority exercising statutory registration and taxation functions does not thereby assume responsibility to prospective purchasers who rely on registration records when entering private commercial transactions. Foreseeability of economic loss is insufficient. The court must examine the statutory purpose, assumption of responsibility, proximity, fairness, justice and reasonableness, and the incremental development of negligence law. Where the statutory scheme is directed to taxation and road registration, accuracy of records does not establish a purpose of protecting purchasers’ investment interests. A guidance document acknowledging that registration marks may assist consumer protection does not, read in context, amount to a voluntary assumption of responsibility.

The claimant bought a classic car for £250,000, relying in part on its existing DVLA registration as a historic vehicle. Before the purchase, the DVLA had seen the sale advertisement and decided to investigate the vehicle’s identity and historic classification when notified of a change of keeper. It did not alert the registered keeper or the claimant before the purchase or during the investigation. The vehicle was later re-registered with a Q plate and sold for £100,000.

At trial of a preliminary issue, the claimant alleged that the DVLA owed him a narrow duty of care to protect prospective purchasers once it had decided to investigate the vehicle. The central question was whether such a duty arose in the statutory and factual circumstances.

1. The claim failed on the preliminary issue. The DVLA did not owe the claimant a duty of care in respect of his economic loss.
2. The Vehicle Excise and Registration Act 1994 and the Road Vehicles (Registration and Licensing) Regulations 2002 formed the governing statutory context. Their purposes were to collect vehicle excise duty and ensure that vehicles used on UK roads were registered. Although accurate records assisted those purposes, the legislation did not indicate that registration existed to enable prospective purchasers to value vehicles or protect their commercial interests.
3. The DVLA had not assumed responsibility to the claimant. Its registration decisions were made in performance of statutory functions, not voluntarily or on a contractual footing. The guidance document INF26 had to be read as a whole and in its statutory context. Its statement that Q and QNI numbers could be a consumer protection aid merely acknowledged possible reliance for another purpose; it did not amount to an acceptance of responsibility to protect consumers.
4. Applying the threefold approach, loss to a purchaser in the claimant’s position was foreseeable, particularly because the DVLA had seen the sales advertisement. However, the prospective purchaser class was not sufficiently ascertainable when the registration documents were issued. The claimant’s reliance was comparable to reliance by strangers on information in general circulation, rather than reliance on information prepared for a known transaction or defined class.
5. It was not fair, just and reasonable to impose the proposed duty. Purchasers could protect themselves through expert investigation or contractual warranties. The incremental approach and Reeman v Department of Transport [1997] PNLR 618 provided a close analogy against recognising a novel duty for economic loss caused by a regulatory certificate or registration.
6. The court considered the relevant tests separately and then cross-checked them in the round. The claim was dismissed on the issue of duty.

This was a first-instance trial of a preliminary issue of law. The judgment does not state any prior appellate decision.