A Latin phrase describes tort most appropriately injuria sine damnum, which means damage is done without injury.

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1 CITY UNIVERSITY OF HONG KONG Introducing Tort Law Law of Negligence Refer to Elliott & Quinn Tort Law 6 th Edition Chapters 1 & 2 TORT LAW Law of contracts or law of torts? Tort law differs from the contract law in these areas: 1. Contract law is based on a single underlying legal principle; 2. Tort law does not have any unifying legal principle; 3. A contractual relationship can end but a tortious relationship may not be over; and 4. Tort relationship is of everybody with everybody. Furthermore, contracts can be discharged or performed, tort liability can t be. For example, the tobacco case in USA, the cigarette merchants did not disclose facts about smoking hazards, resulting in hefty damages which are not time-barred. Damage done 20 years ago can still be claimed now! Life of tort is very long, unlike that in contracts. Most government sees this long and lasting nature in tort liability, therefore in many occasions she quickly enacted laws to eliminate the tort or to limit her share of liability; which would otherwise come to a reality in the future (for example in water or harbor pollutions, or in nuclear hazards). The nature and function of the law of torts The word tort is Norman French. It means twisted or wrung or, to us a modern word wrong. A tort is a wrong for which redress is available in the civil courts. The usual action is an action for damages, i.e., money compensation, but, where damages are not appropriate, the equitable remedy of injunction may be available. (To walk unlawfully on another s land is trespass which is a tort. If the trespasser repeatedly trespasses, doing no harm to the land, it will not be sensible to claim money from the trespasser. In this case the remedy would be an injunction barring the person from trespassing the land). A Latin phrase describes tort most appropriately injuria sine damnum, which means damage is done without injury. Tort law has two components: (a) it defines what constitutes a legal injury (injury to the legal rights); and 1

2 (b) it establishes the circumstance under which one person may be liable for another s injury. NEGLIGENCE Some terms need to be understood. Negligence is carelessness. An act which harms another and which was done carelessly is called a misfeasance. A failure to act, or to control the acts of third parties, which results in harm to another and is actionable is called a nonfeasance. Three-step process before the 19 th Century (i) Identify the existence of a duty to take care owed by A to B. (ii) Identify a breach of that duty. (iii) Demonstrate that B s injury is due to A s breach of duty. The emergence of a general test Negligence was first recognized as an independent tort in the case of: Donoghue v Stevenson [1932] AC 562 The appellant went with a friend into a coffee shop, where the friend ordered for her a bottle of ginger beer. This was served in an opaque bottle the contents of which could not be seen from the outside. The shop owner opened the bottle and poured some of the contents into the appellant s glass. This she drank and her friend poured in the rest of the bottle. The appellant alleged that this contained the decomposed remains of a snail which caused her to suffer shock and then later, a gastric illness. She brought this action for negligence in the Scottish Court of Session against the manufacturer of the ginger beer. The Scottish Court held that there was no cause of action; as the bottle was not directly purchased from the manufacturer. The case came before the House of Lords on the question of law alone. It was held that the manufacturer of the ginger beer owed a duty of care to the claimant. Two rules emerged: the broad rule and the narrow rule. The broad rule Lord Atkin has made the following general principle governing the duty of care, it is also called the neighbour principle: Persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question. 2

3 From the words used in Lord Atkin s ratio, later judges or authoritative writers have derived three principles out of the words, including foreseeability (have them in contemplation), proximity (closely affected) and directness (directly affected). The narrow rule It refers to the final precedent judgment for the case between a ginger beer manufacturer and a customer who got sick. Expansionary effect caused by the neighbour principle Lord Atkin s proposition is so broad and authoritative that it may be regarded as a statement of common law policy. It creates different classes or categories of people so as to distinguish who is involved in the case, who is liable to the injury and who can be entitled to claim damages. Here is an example: Haley v London Electricity Board [1965] The Defendant dug a trench in a street. Their precautions for the protection of passers-by were not sufficient to protect the Claimant, because he was blind. He was injured as a result, and the Court held that the number of blind people who walked about on their own made it foreseeable that such a person could be injured, and therefore gave rise to a duty of care to take suitable precautions to prevent such injury. This ratio has begun to open a category of people to whom a risk of harm was foreseeable, so this was not just for one person. *** The followings are three principles derived from Lord Atkin s Principle: I. Foreseeability Principle This principle concerns whether the damage is reasonably foreseeable. A reasonable person should be able to foresee any acts or omissions that would cause damage or injuries to the plaintiff. A plaintiff can be a special person or people belonging to a special class or category. Thus the defendant needs to identify that group of people which can be foreseeably affected by the actions of the defendant and then to take good care. The principle needs to satisfy that a reasonable person in the defendant s position would have foreseen the risk of damage. In order for a duty to exist, it must be reasonably foreseeable that injury would cause to the defendant or the category of people, rather than to the people alone. That is the duty is owed to that category of people, and not to the human beings in general. For example, a car driver on an expressway will take care of other vehicles behavior; but a car driver in a busy narrow road, with parking meter spaces on both sides will take care of crossing pedestrians. 3

4 The following case in USA did not find the defendant liable because the claimant s injury cannot be foreseen due to the remoteness of the careless act. Palsgraf v Long Island Railroad Co [1928] Two of the Defendant s employees helped a passenger board a train. In doing so, they negligently knocked a parcel the passenger was carrying. It contained fireworks, and exploded as it dropped. The explosion shook some counter-weighting scales about 25 feet away, which fell and in turn hit and injured the Claimant. The New York Court of Appeals held that she was not entitled to damages, explaining that a duty of care was owed to the holder of the package but not to the claimant who had been standing far away, as there was no reason to foresee that she was in any danger from the contents of the fireworks parcel. II. Proximity principle Proximity means a closeness relationship existed between the plaintiff and the defendant. It means that the defendants are reasonably expected to foresee that actions could cause damage to the plaintiff. Watson v British Boxing Board of Control [2000] A boxer suffered severe brain damage after being injured in a match, and evidence suggested that his injuries would have been less severe if immediate medical attention had been available at the ringside. Held: there was sufficient proximity between Mr Watson and the Board to give rise to a duty of care. The is because the boxers licensing system operated by the Board created a relationship of proximity, and the board had complete control and responsibility to the situation which resulted in Mr Watson s injury if the Board did not exercise reasonable care. III. Directness principle (causation principle) Causation concerns the relationship between the cause and result. It is established to prove that the damage to the plaintiff has been caused by the breach of the duty on the part of the defendant. It also concerns whether it is just and reasonable to impose such a duty of care. Wagon Mound No. 1 (1966) This is a case about the burning down of the Sydney harbour wharf in Australia and is a landmark case in causation. A ship owner was sued who had allowed the careless discharge of used oil into the Sydney harbour. However, a new act intervened by a welder who created sparks when welding has caused the fire and finally burnt down the 4

5 whole wharf. The careless act of the welder is viewed by the court as an NAI which has protected the ship owner from liabilities. There has been a proliferation of cases based on the three derived principles. Later on the neighbor principle was further developed by Lord Wilberforce into a two-stage test, or is called the Anns Test. Anns v London Borough of Merton [1977] HL The plaintiffs were lessees under long leases of flats in a two-storey block. Walcroft Limited, who had completed the building of the block in 1962, was also the owners of the block. In 1972, cracks appeared in the walls and the floors began to tilt. The plaintiffs alleged that these defects were due to inadequate foundations. Local Authorities were enabled through byelaws made under the Public Health Act 1936 to supervise and control the construction of foundations of buildings. Byelaws made by a local authority (the council) provided for the inspection of plans and the inspection of work. The council approved foundations 3 feet or deeper to the approval of he local authority. The byelaws did not provide that the council was under a duty to inspect the foundations. The plaintiffs alleged that the foundations were built to a depth of two feet six inches only and not to the depth of three feet required by the plans deposited with the council. The plaintiffs claimed damages against the council for negligence by their approving the foundations or their failure to inspect the foundations. Held that (1) the question of the duty of care must be considered in relation to the council s duties, powers and discretions under the Public Health Act 1936; (2) although the Act and the byelaws did not impose a duty of inspection, it was the council s duty to give proper consideration of the question whether they should inspect or not; (3) the council were under a duty to take reasonable care to ensure that a builder did not cover up foundations which did not comply with byelaws. A right of action would accrue to a person who was owner or occupier of the building when the damage occurred. Lord Wilberforce has made the following statement and is called the two-stage test: First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage, there is a sufficient relationship of proximity or neighborhood such that, in the reasonable contemplation of the former, carelessness on the part of one may be likely to cause damage to the latter, in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or to limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise. Lord Wilberforce argued that it was no longer necessary to find a precedent with similar facts, the two-stage test can be developed as: 5

6 (i) Establish whether the parties satisfied the requirements of the neighbor test that is, to whom the defendant could reasonably be expected to foresee a risk of harm. If the answer is yes, a prima facie duty of care arose. (ii) Involve asking whether there were policy considerations which dictated that no duty should exist (omissions*, negligent mis-statements, economic loss). *The above reasons were added by later judges and authoritative writers. Effect caused by the two-stage test Anns Test has both the accelerating and slowing down effects on the number of negligence cases. In the first stage test, a defendant will be actionable when the prima facie duty of care has arisen. This has an effect of admitting more potential cases. For the second stage test, the court will filter out any cases belonging to the three policy limitations which reduced some potential cases. *** The following limitations are derived from the Anns Test: OMISSIONS The general rule There is no general duty in law to be a good Samaritan. Mere failure to act for the benefit of others is not a breach of the general duty of care. Yuen Kun Yeu v Attorney-General of Hong Kong [1988] AC175, PC There is no liability in negligence on the part of one who sees another about to walk over a cliff with his head in the air, and fails to shout a warning. (per Lord Keith) Exceptions to the general rule 1. Defendant s previous act creates a duty - when Defendant s earlier act creates a duty to take care, the fact that an omission is the immediate cause of harm will make Defendant liable. 2. Pre-existing relationship between claimant and defendant - in some cases, there may be an existing relationship from which flows a positive duty to act. That is, where a duty arises substantially out of a particular relationship, e.g. employer and employee, carrier and passenger, nominated sub-contractor and building owner, an omission may constitute a breach of duty. 6

7 3. Failure to control or guard against the acts of third parties - where Defendant has the right to control the conduct of the third party, a failure of control resulting in foreseeable harm is actionable by the Claimant. Home Office v Dorset Yacht Co. Ltd. [1970] HL A party of seven Boys Home juvenile offenders, in the supervision of three officers, was working on Brownsea Island in Portland Harbor, a busy yachting center. One night the officers all went to bed leaving the boys unsupervised. The boys, some of whom had escaped before, left their quarters and boarded a yacht which they subsequently caused to collide with the plaintiff s yacht. The plaintiff claimed damages, alleging that the officers had been negligent. Held: the Home Office, through their officers, owed a duty of care to the plaintiff. Lord Morris said: It was to realize that the boys might wish to escape and might use a yacht if one was near at hand to help them to do so.. the risk of such a happening was glaringly obvious. NEGLIGENT MIS-STATEMENTS The general rule There was no liability in negligence for a false statement made carelessly. There are also exceptions to this rule. 1. There can be no liability unless there was a special relationship at the time of the statement which justified a reliance on the statement by the party to whom it was made. Hedley Byrne v Heller & Partners [1963] HL A bank telephoned merchant bankers concerning the financial position of Easipower Limited. This company was a customer for both the bank and the merchant bankers. The bank said that they wanted to know, without responsibility on the part of the merchant banker, whether the company would be good for an advertising contract for 8,000 to 9,000. Later, the bank wrote to the merchant bankers asking in confidence for an opinion of the respectability and standing of Easipower Ltd by stating whether this company was trustworthy to the extent of 100,000 per annum. The merchant bankers replied favorably but they qualified it as being without responsibility. Relying on this statement, a firm of advertising agents placed orders at their own cost for advertising time and space for Easipower Ltd. Easipower went into liquidation and the advertising agents lost 17,000 on the advertising contracts for Easipower. The advertising agents sued the merchant bank. Held: the circumstances have given rise to a duty of care. If it was not for the Without Responsibility statement, the defendant should have been liable. Lord Morris said: 7

8 It should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill a duty of care will arise, will place reliance upon it, then a duty of care will arise. 2. True reliance is hard to justify. The duty of care may arise even where the negligent mis-statement was one of several factors relied upon. JEB Fasteners Ltd. v Marks, Bloom & Co [1983] ECONOMIC LOSS The courts never allowed the recovery of any kind of economic loss as damages for negligence. Later court decisions showed a relaxing of this rule, where the proximity test is satisfied and the economic loss is foreseeable. The economic loss was recoverable if it was consequential upon physical damage caused by negligence, but not otherwise. Spartan Steel and Alloys Ltd v Martin & Co Ltd [1973] CA The Plaintiff manufactured metal alloys in their factory which worked 24 hours a day. For this purpose, continuous power was needed to maintain the temperature of the furnace. In this case, the Defendant s employees were digging up the road outside the Plaintiff s plant. They damaged the electric cable between the plant and the power station and causing power failure. Inside the Plaintiff s plant, there were many melt steel in the furnace. To prevent the melt steel to solidify in the furnace, the Plaintiff added some oxygen in the furnace. However, the melt steel has lost strength causing reduction in value and loss of profit. Also, the cable was repaired for 14 hours. The Plaintiff suffered loss in profit because the further four melts could not been processed on time. The Plaintiff claimed for the below loss including: Reduction in value of the melt steel; Profit loss of the melt steel; and Future profit loss during the 14 hours repairing the electric cable. The court decided that the Defendant has negligently damaged the electric cable which caused the Plaintiff suffered physical damaged. The 368 reduction in value of the melt steel and the 400 profit loss of the melt steel were consequential economic loss and 8

9 could be recoverable. For the 1767 future profit loss, it was pure economic loss and irrecoverable. Latest movements The two-stage test led to an expansion of the situations in which a duty of care could arise, and in the scope of negligence. This expansion reached its peak in Junior Books [1982]. The growth in liability for negligence set all sorts of alarm bells ringing and so it finally leads to a rapid judicial retreat. The broad general principle with its two-stage test was swept aside, leaving the courts to impose duties of care only when they could find precedent in comparable factual situations. Three-step process in the latest development There has been a swing of pendulum. The Caparo v Dickman [1990] decisions have taken the law back similar to a pre-donoghue position. The latest development in this case requires that there are now three questions to be asked in deciding whether a duty of care was owed, the Court will ask: (i) (ii) (iii) Was the damage to the Claimant reasonably foreseeable? Was the relationship between the Claimant and the Defendant sufficiently proximate? Is it just and reasonable to impose a duty of care? Thus the chance of successfully suing in the negligence cases has since been low. Dr Eric Cheng City University of Hong Kong 8 March