He then sought to form his own business selling insurance, and approached the Scottish Amicable Life Assurance Society to be appointed as one of their company representatives.

By 4-1, the House of Lords held that Guardian Insurance owed the plaintiff a duty of care in tort, under the principle first expressed in Hedley Byrne & Co Ltd v Heller & Partners Ltd and later expanded upon in Anns v Merton LBC.

The House of Lords held that sending a bad reference, if it contained inaccurate information, could be a breach of duty in tort for negligence.

Lord Woolf agreed that negligent misstatement causing economic loss is actionable, but dissented on the outcome, explaining that the importance should not be exaggerated for the reasons given in Caparo Industries plc v Dickman concerning the required degree of foreseeability and proximity.

[7] In another case, the Court of Appeal of England and Wales has held that "a reference must not give an unfair or misleading impression overall, even if its discrete components are factually correct.