Local authority – Duty of care – Public liability insurance – Respondents sustaining serious injury at horse fair – Respondents seeking damages from appellant local authority – Court finding appellants under duty to secure public liability insurance – Whether imposing duty of care just and reasonable – Appeal allowed
The first respondent was seriously injured by a kick from an untethered horse while attending a horse fair held on a site owned by the appellant town council. He and his family (the second and third respondents) originally claimed damages against the appellants in respect of the physical and psychological injuries they had suffered as a result of the accident. They contended that the appellants had been negligent in failing to adequately segregate the horses from the public. However, that part of the claim was subsequently abandoned and the action proceeded on an alternative claim, namely that the appellants had negligently failed to take proper care to ensure that public liability insurance was in place to cover circumstances such as those of the accident.
The county court found in favour of the respondents on the issue of liability and gave judgment for damages to be assessed. The court held that it was just, fair and reasonable to impose a duty of care on the appellants on the issue of public liability insurance.
The appellants appealed contending, inter alia, that even if they were under such a duty of care, the court was wrong to find that their failure to execute that duty had caused any loss to the respondents. Further, the reasons given by the recorder imposing the duty were inadequate.
Held: The appeal was allowed.
The recorder’s conclusion that the respondents had suffered loss from the absence of an appropriate public liability policy was unsustainable. Their pleadings contained no specific allegation of negligence on the part of any body responsible for organising the fair other than the appellants. Although the recorder had said that if appropriate insurance had been in place there would still have been a negligent failure “by the bodies concerned” to ensure the proper segregation of visitors and horses, he did not specify a particular body as being legally liable to the respondents. It was therefore not possible to find that such a body would have been unable to satisfy a judgment obtained against it.
The general policy of the law did not extend to holding a defendant legally to blame for any injury to a claimant caused by the negligence of a third party on the ground that the defendant could have prevented it. That was an important starting point. However, such a liability could be established in many circumstances, usually where either the particular relationship between the claimant and defendant was such as to place the defendant under a duty of care to secure the safety of the claimant or the relationship between the defendant and the third party was such that the defendant should carry a responsibility to protect others against the conduct of that third party.
The free-standing duty of care to procure the placement of public liability insurance, which the recorder had held the appellants owed to visitors to the fair, was one stage removed from seeking to hold the appellants directly liable for personal injury caused by third-party negligence on the ground that they should have foreseen and prevented it. The claim was for the economic loss alleged to have been suffered as a result of the absence of a public liability policy that the appellants could have taken steps to ensure was in place. Although this was a novel claim, it was not necessarily fatal because the categories of negligence were never closed. However, the postulate of a simple duty to avoid any harm that was, with hindsight, reasonably capable of being foreseen was untenable intelligible limits to keep the law of negligence within the bounds of common sense and practicality. The instant case did not resemble any other category of case in which liability had been established, so as to found an argument by analogy: Gwilliam v West Hertfordshire Hospitals NHS Trust [2002] EWCA Civ 1041; [2003] QB 443 considered.
A duty of care arose only if the relationship between the defendant and the claimant involved a particular transaction or activity that was likely to have economic consequences for the claimant, such that it could properly expect to rely on the defendant to protect it against any economic harm that could result from want of care on the part of the defendant. That need was reflected by the use of the terms “special duty” or “special relationship”. There was no such relationship between the appellants and the general public, including the respondents, who visited the fair.
As a matter of general principle, if the appellants had no duty to protect the respondents against the physical consequences of an accident caused by the negligence of a third party, it would not be just and reasonable to impose on them the more remote duty to protect the respondents from the economic consequences of being unable to enforce a judgment against the third party.
Michael Kent QC and Steven Snowden (instructed by Crutes LLP, of Newcastle upon Tyne) appeared for the appellants; Philip Havers QC and Paul Kirtley (instructed by Donnelly McArdle Adamson, of Darlington) appeared for the respondents.
Eileen O’Grady, barrister
