Williams v Natural Life Health Foods [1998]

Plaintiff ran franchise of health food shop – made
loss.
Brought action against franchising company for their
negligent advice.
Company wound up.
Director of company then joined as defendant on basis
he had assumed personal responsibility for the negligent advice.
House of Lords found for director.
Held director of limited company is only personally
liable to plaintiffs for loss suffered as result of negligent advice if he had
assumed personal responsibility for advice and plaintiffs had relied on that
assumption of responsibility.
Whether or not there had been assumption of
responsibility was to be determined objectively.
Whether or not there had been reliance was to be
determined not simply on facts but on whether plaintiffs could reasonably rely on assumption of
responsibility.
In present case insufficient evidence for tests to be
met.
Note Lord Steyn (with whom the other Lords agreed)
maintained, in face of academic criticism, that ‘there is no better
rationalisation for the relevant head of tort liability than assumption of
responsibility’.