Home Office v. Dorset Yacht Co. [1970] 2 All ER 294 is a leading House of Lords decision on duty of care.

Facts
Ten borstal trainees were working on an island in the harbour under the control of three officers. Seven trainees escaped one night, at the time the officers had retired to bed leaving the trainees to their own devices. The seven trainees who escaped boarded a yacht and collided with another yacht, the property of the respondents, and damaged it. A preliminary issue was ordered to be tried on whether the servants or agents owed a duty of care to the respondents capable of giving rise to liability in damages with respect to the trainees undergoing sentences. It was admitted that the Home Office would be vicariously liable if an action would lie against any of the officers.
This was an appeal against the decision of the preliminary hearing in favor of the respondents.

Opinion of the Court
Lord Reid held:
the taking by the trainees of a nearby yacht and the causing of damage to the other yacht which belonged to the respondents ought to have been foreseen by the borstal officers as likely to occur if they failed to exercise proper control of supervision; in the particular circumstances the officers prima facie owed a duty of care to the respondents...
Legal Significance
The case is perhaps relevant not only for its clear elucidation of the Atkinian notion of Neighbourhood but also for its expression of a thoroughly incrementalist approach to the development of the duty of care. Lord Reid held:
‘there has been a steady trend toward regarding the law of negligence as depending on principle so that when a new point emerges one should ask not whether it is covered by authority but whether recognised principles apply to it. Donoghue and Stevenson may be regarded as a milestone, and the well-known passage in Lord Atkin’s piece should I think be regarded as a statement of principle … it ought to apply unless there is some justification or valid explanation for its exclusion. For example, causing economic loss is a different matter’