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TORT LIABILITY - A 1995 UPDATE
By Anthony Temple Q.C.
The client who earlier this year asked a lawyer, "What are the principles upon which tort liability will be
imposed?" will have been told that the traditional approach for determining the existence of a duty of care
involved three separate considerations e.g.
(a) foreseeability
(b) proximity and
(c) whether it is "fair just and reasonable" for liability to be imposed.
The client will also have been told that the three recent cases, Merrett, Spring v Guardian Assurance and
White v Jones breathed new life into the concept of assumption of responsibility. If the client asked what
this meant, he might have been referred to the speech of Lord Browne-Wilkinson in White v Jones when
he said:
"I doubt whether the same criticisms would be directed at the phrase (- assumption of responsibility
-) if the words had been understood, as I think they should be, as referring to a conscious assumption
of responsibility for the task rather than a conscious assumption of legal liability by the Plaintiff for
its careful performance."
The same client might now ask in the autumn of 1995 how the relation between assumption of
responsibility and the traditional approach is working out in practice.
There can be no doubt that the "will" cases may be regarded as being in the category in their own, and that
the conclusion reached in White v Jones is one which was just in the circumstances of the case. The
argument that a remedy should be given to a deserving party (the disappointed beneficiaries) apparently
without a cause of action has been persuasive since Ross v Counters, and it was not surprising that the
House of Lords reached the conclusion that it did. Practical experience suggests that there will be a steady
flow of "will" cases, at least until procedures in small firms of solicitors are tightened up to avoid this
potential source of liability.
The client would certainly be referred to Marc Rich v Bishop Rock Limited [1995] 3 WLR 227 in which
speeches were handed down by the House of Lords on 6th July 1995. The case is important because it
shows the House of Lords emphatically emphasising the three traditional considerations and paying little
weight to the concept of assumption of responsibility, possibility as a function of the way the case was
argued. The strong probability is that other courts will adopt a similar approach.
The Facts in Marc Rich were simple. A bulk carrier loaded cargoes of lead and zinc concentrate at South
American Ports. The bills of lading incorporated the Hague Rules. The vessel developed a crack in her
hull. The owners of the vessel asked their classification society, NKK, to survey the damage. The
surveyor recommended the vessel should proceed to undergo permanent repairs in dry dock. The owners
were not attracted to that idea but instructed the vessel to proceed to port for temporary repairs. This they
effected. The surveyor reversed his initial recommendation recommending that the vessel be retained in
class for her original voyage. Having sailed, the vessel reported that the welding of the temporary repairs
had cracked. The vessel sank at sea and the cargo was totally lost. The cargo owners sued NKK for the
balance of their claims of about US$5 million. On a preliminary issue:
"Whether on the facts pleaded in the Points of Claim NKK owed the duty of care to the cargo owners capable of giving rise to a liability in damages",
the Judge. Hirst J, answered affirmatively. The trial Judge held there was the necessary close relationship
- or degree of proximity - established in order to create a duty of care.
NKK appealed. The Court of Appeal (1994 1 WLR 1071) reversed the Judge's decision. Each member of the Court held that in tort claims of physical damage a plaintiff needs to satisfy the requirements of foreseeability and proximity as well as the requirement that the imposition of tort liability is fair just and reasonable.
Balcombe LJ doubted that the words "fair just and reasonable" imposed a test additional to that of "proximity".
The leading judgment in the Court of Appeal was given by Saville LJ. By reference to the Hague Rules he concluded it was not fair just and reasonable to require NKK to accept a duty which by the Hague Rules lay primarily on shipowners. Secondly, he concluded that absent any dealing between cargo interest and NKK the relationship between the parties did not support the existence of a duty of care. Balcombe LJ agreed with these conclusions. Mann LJ confined himself to the question whether the imposition of a duty of care on NKK was fair just and reasonable, and for substantially the reasons given by Saville LJ concluded that NKK owed no duty of care to cargo interests.
The cargo owners appealed to the House of Lords. They lost. Lord Lloyd of Berwick's dissenting speech exhibits a robust disagreement. It is well worth reading on its own account. The other three Lord Lords agreed with the speech of Lord Steyn at page 241.
The interest of the case in the House of Lords lies in the approach adopted by the House of Lords to the fundamental question of how to identify when a duty of care should be held to exist.
Though it was argued that in cases of physical damage the three traditional ingredients were not needed, the majority of the House of Lords emphatically held that they were required in every case.
At page 247H Lord Steyn addressed what he described as "other material factors" i.e.
(a) Direct physical loss. Somewhat surprisingly, the majority held that there was no direct physical loss though not everyone might agree. The hypothetical cargo owner watching his cargo sinking might well take a different view.
(b) Reliance. In effect the majority suggested that there was little reliance by the cargo owner on the classification society. Whether a cargo owner asked on the quay side whether he was relying on the fact that a competent job had been done by the classification society would give the same answer is not so certain.
(c) Bill of lading contracts. The majority held that the international trade system tended to militate against the recognition of the claim in tort put forward by the cargo owners.
It is as well to contrast the approach of the House of Lords in Marc Rich with the approach adopted in
Page v Smith [19951 2 WLR 644.
This case was decided on 11 May 1995. The Plaintiff was involved in a running down case. He suffered no physical injuries. For 20 years before the accident he had suffered from ME, chronic fatigue syndrome or the like. The Plaintiff claimed damages, saying that his condition had become chronic. The trial Judge found for the Plaintiff. The Court of Appeal allowed the appeal by the Defendant on the ground that the Plaintiffs injury was not reasonably foreseeable. On appeal by the Plaintiff, by a majority of 3-2, the House of Lords held once it was established that the Defendant was under a duty of care to avoid causing personal injury to the Plaintiff it did not matter whether the injury was physical, psychiatric or both. It was sufficient that the Defendant should have reasonably foreseen that the Plaintiff might suffer personal injury as a result of the Defendant's negligence so as to bring him within the ambit of the Defendant's duty of care. It was unnecessary to ask the question whether the Defendant should reasonably have foreseen the injury by shock.
Over the years the courts, and particularly the House of Lords, have had to consider the question whether the law affords a remedy in cases of "nervous shock", and the nature and extent of distinction between primary and secondary victims. It might be thought that in approaching this question the House of Lords would expressly adopt either the three-fold traditional approach of foreseeability, proximity and "fair just and reasonable" or, in the post Merrett era, consider whether there was any scope for discussion of the concept of assumption of responsibility. In fact, the House of Lords concentrated exclusively on the issue of foreseeability to the exclusion of the concepts of proximity or "fair just and reasonable". It is difficult to reconcile this approach in the case of the physically injured Plaintiff with the approach in the House of Lords of Marc Rich to requirements in physical damage cases (at page 246) even allowing for the possible distinction between physical damage to an individual and physical damage to property.
In each of the two cases the House of Lords was confronted with the problem of determining whether, on a given set of simple facts a duty of care should be held to exist. One involved physical damage to an individual. The other involved the physical loss (and arguably physical damage) to property. These issues might be thought to give rise to questions of principle, not least the simple question, "what test is to be adopted in order to determine whether a duty of care exists?" The short and up-to-date answer appears to be that assumption of responsibility plays little or no part in the determination of these issues and that the traditional threefold approach is used intermittently, not uniformerly.
When addressing the issues of principle which arose in Marc Rich, the House of Lords expressly adopted a passage in the judgment of Saville LJ in Marc Rich in the Court of Appeal which is worthy of quotation in full:"
"Whatever the nature of the harm sustained by the plaintiff, it is necessary to consider the matter not only by inquiring about foreseeability but also by considering the nature of the relationship between the parties; and to be satisfied that in all the circumstances it is fair, just and reasonable to impose a duty of care. Of course, these three matters overlap with each other and are really facets of the same
thing. For example, the relationship between the parties may be such that it is obvious that a lack of
care will create a risk of harm and that as a matter of common sense and justice a duty should be
imposed ... Again in most cases of the direct infliction of physical loss or injury through
carelessness, it is self-evident that a civilised system of law should hold that a duty of care has been broken, whereas the infliction of financial harm may well pose a more difficult problem. Thus the
three so-called requirements for a duty of care are not to be treated as wholly separate and distinct requirements but rather as convenient and helpful approaches to the pragmatic question whether a duty should be imposed in any given case. In the end whether the law does impose a duty in any particular circumstances depends upon those circumstances ..."
The majority observed that this seemed to be a "correct summary of the law as it now stands". From this, one may justifiably conclude that the difficulties of articulating a single set of principles in a complex world to determine whether there should be tort liability has given way to a pragmatic, case by case approach. In short principle plays little or no part in the process: pragmatism reigns supreme.
Anthony Temple QC practises from 4, Pump Court. London
