Seddon v Driver And Vehicle Licensing Agency

For pure economic loss, a statutory authority does not generally owe prospective purchasers a duty of care merely because its registration records may influence a sale. Proximity ordinarily requires reliance for the purpose for which the statement or service was provided and an ascertainable, existing class at the relevant time. A vehicle registration document issued for tax and registration purposes is not supplied to inform private purchase decisions. A duty will also be unlikely to be fair, just and reasonable where it would expose the authority to wide and disproportionate liabilities, affect statutory functions, and purchasers can protect themselves through warranties, inspection or statutory appeals. The incremental approach reinforces the result where analogous authority denies a duty. An assumption-of-responsibility analysis leads to the same conclusion.

Julian Seddon bought a continuation AC Cobra for £250,000, relying partly on its V5C registration document describing it as a 1964 historic vehicle. Before the purchase, the DVLA knew that the vehicle was advertised for sale and had doubts about its age or identity, but investigated only after receiving the change-of-keeper application. It later allocated a new vehicle identity number and a Q plate, substantially reducing the vehicle’s value. Mr Seddon claimed £150,000 in damages, alleging that the DVLA owed prospective purchasers a duty to disclose its concerns.

On a preliminary issue, the Queen’s Bench Division held that no duty of care arose, although loss was foreseeable. The appeal concerned assumption of responsibility, proximity, the fair, just and reasonable limb of the threefold test, and the incremental approach.

The appeal was dismissed unanimously. Hamblen LJ gave the leading judgment, with Newey LJ and Macur LJ agreeing.

1. The assumption-of-responsibility test was not satisfied. The DVLA had no direct relationship with the purchaser, was performing statutory functions rather than acting voluntarily, had not applied any special skill for his assistance, could not reasonably expect him to rely on the V5C for a private purchase, and had assumed no identifiable responsibility towards him.
2. Loss was foreseeable, but the threefold test was not satisfied. Proximity generally requires reliance on a statement, advice or service for the purpose for which it was provided. The Vehicle Excise and Registration Act 1994 and the Road Vehicles (Registration and Licensing) Regulations 2002 concerned vehicle registration and revenue collection, not the protection of purchasers’ commercial interests. The incidental consumer-protection benefit of a Q plate did not alter that statutory purpose.
3. Proximity also generally requires an ascertainable class in existence when the statement or service is provided. Prospective purchasers of vehicles were neither identifiable through a register nor an existing class, even when the DVLA decided to investigate this vehicle.
4. It would not be fair, just and reasonable to impose the alleged duty. The proposed liability could be wide-ranging and disproportionate, could affect the performance of statutory functions, and would transfer losses to taxpayers. The purchaser could protect himself through contractual warranties, expert inspection or available appeal and redress mechanisms.
5. The incremental approach supported the same conclusion. Reeman v Department of Transport provided a close analogy and strong support for denying a duty, notwithstanding factual distinctions concerning the time at which proximity was assessed.

The High Court’s preliminary-issue judgment was upheld.

• Court of Appeal (Civil Division): In [2019] EWCA Civ 14, the court dismissed the appeal and upheld the preliminary-issue decision.
• Queen’s Bench Division: In [2018] EWHC 312 (QB), Justine Thornton QC held that the DVLA owed no duty of care to the prospective purchaser.