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Public Authorities and Duties Owed to Individuals – Court of Appeal Ruling

Public authorities are evidently focused on serving the public at large and the extent to which they owe legal duties of care to individuals has long been an area of heated legal debate. The Court of Appeal gave authoritative guidance on the issue in a case concerning the Driver and Vehicle Licensing Agency (DVLA).

A car enthusiast bought a sports car for £250,000 which was identified as a historic vehicle on its registration document. A month later, that status was revoked following a DVLA investigation which indicated that substantial parts of the vehicle were not original. The buyer subsequently sold the car for £150,000, but his claim against the DVLA in respect of his loss was dismissed by a judge.

In ruling on his challenge to that decision, the Court noted that the DVLA had been aware both of the advertisement and that the car’s historic status was in doubt before the buyer purchased it. However, it had decided not to investigate the vehicle’s provenance before it changed hands.

In dismissing the appeal, however, the Court ruled that the DVLA owed the buyer no duty of care. Although it was accepted that the loss was foreseeable, the DVLA was unaware of the buyer’s identity at the time of the purchase and there was no direct relationship between them, still less one akin to contract.

Noting that the DVLA’s function is to raise revenue for the Government and to ensure that vehicles on UK roads are registered, the Court found that the buyer could not reasonably rely on any representation that the DVLA made as to the car’s historic status. In particular, he was not entitled to rely on the registration document for a purpose other than that for which it was provided, namely the collection of tax.

In the absence of any direct dealings between them, there was no identifiable act by which the DVLA could be said to have assumed a responsibility to the buyer. The Court also noted that a ruling in the buyer’s favour would expose the DVLA to wide-ranging and extensive liabilities which might impact on its performance of its statutory functions.

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