Notwithstanding
some fairly intense lobbying on behalf of accident victims (which succeeded in
securing the appointment of a Royal Commission under Lord Pearson), English law
remains committed to the principle that compensation for personal injuries is primarily
a function of the law of tort. In practical terms, this means that, to recover
any compensation (over and above those state benefits which are payable under
National Insurance or other forms of social security), the victim must first
identify a ‘wrongdoer’, in the sense of someone whose breach of legal duty is
the cause of his injuries. And this in turn means that such questions as who is
responsible for the condition of property, and how far their responsibility
extends, assume a very high degree of importance indeed. A recent decision of
the Court of Appeal has something to tell us about such matters, as well as
casting further light on life after Street v Mountford [1985] 1
EGLR 128.
The case of McDonagh
v Kent Area Health Authority (1986) concerned a 100-year-old terraced
house in Dartford, one of 20 virtually identical houses which were owned by the
defendants. In 1979 the house in question was occupied by Mr McDonagh, a charge
nurse employed by the defendants, together with his wife and their three
children. The family had lived in the house for some five years, and for
several years prior to that they had lived in another house in the same street.
The houses
were very small, so small in fact that their staircases ran across the
properties instead of from front to back, rose at an angle of 50 degrees rather
than the 42 degrees which would be the permitted maximum today, and were built
with treads much narrower from front to back than would normally be the case.
In the house occupied by the McDonaghs, the top step (of 12) was so narrow as
to require an adult wishing to descend to put his or her foot sideways on the
tread, while the handrail which ran beside the staircase was so low and
terminated at such a distance below the top step as to be no help. It was from
this top step that Mrs McDonagh fell one night and broke her spine; a
tetraplegic as a result, she took legal action against the defendants, alleging
that they had failed in their duty as ‘occupiers’ of the house to make it
reasonably safe for their visitors.
The trial
judge held that, although the defendants were indeed to be treated as occupying
the property for this purpose, the staircase could not be regarded as so
dangerous as to require the reasonable occupier to do anything about it (there
were, for instance, no reports of any other accidents having taken place). Mrs
McDonagh duly took her case to the Court of Appeal; the defendants, for their
part, challenged the finding that they were ‘occupiers’ at all.
Now the
Occupiers’ Liability Act 1957, which creates the duty on which Mrs McDonagh
relied, does not define the term ‘occupier’; this has been left to the courts,
which have by and large ignored the niceties of land law and used a commonsense
approach. In particular, it has consistently been held that it is a tenant,
rather than his landlord, who is responsible under this statute for the safety
of visitors and, not surprisingly, this point was taken up by the defendants.
The trial judge appeared to have held that Mr McDonagh was either a licensee or
a service occupant, but the Court of Appeal disagreed. Relying strongly upon
the decision of the House of Lords in Street v Mountford [1985] 1
EGLR 128, their lordships held that the terminology used by the parties was not
important; Mr McDonagh was given exclusive occupation of premises in return for
a rent, and that made him a tenant. It followed that section 2 of the
Occupiers’ Liability Act 1957 provided no assistance for the plaintiff.
The Court of
Appeal also considered whether the defendants should then be held liable as
landlords under section 4 of the Defective Premises Act 1972, but concluded
that the duty imposed by that provision would not stretch far enough.
The court
confirmed that a landlord’s liability for dangerous premises can only arise
either out of some breach of his repairing obligation or from a defect which he
has positively created. To that extent, the old rule that ‘fraud apart, there
is no law against letting a tumbledown house’ still applies.
prejudice
The term
‘without prejudice’ is one which is frequently encountered on letters written
by both lawyers and surveyors. It has, however, come to be regarded, rather
like its sibling, ‘subject to contract’, as a magic formula which will ensure
that correspondence can never be used by the recipient in a manner detrimental
to the writer. This is a distinctly inaccurate view, since there will be
occasions when the use of the phrase can rebound on the sender; more
importantly, the rubric is only effective at all if employed in the correct
circumstances.
The purpose
of the ‘without prejudice’ rule is to encourage disputants to settle their
differences without resorting to litigation or arbitration. For this reason,
therefore, where parties to a dispute try to negotiate a settlement, any offers
can be made ‘without prejudice’; this means that, if the parties fail to agree
and the matter proceeds into court, any concessions made in that effort to
compromise cannot be referred to in the subsequent litigation. In this way parties
are encouraged to feel that they can give ground in order to try to achieve a
settlement, secure in the knowledge that if this fails, they can retreat to
their former battle-stations.
It can thus
be seen that the ‘without prejudice’ rule is one that only operates between
parties to a dispute; there is therefore no point in stamping the phrase
over offers made in the context of ordinary negotiated agreements. (For these,
the phrase ‘subject to contract’ may well be used in order to prevent
acceptance by the offeree producing an immediately binding contract.) Even when confined in this way to attempts to
resolve disputes, the ambit of the phrase ‘without prejudice’ may still pose
problems, for the court may have to decide whether or not there is a dispute
and whether or not the document in question is an attempt to resolve it.
These issues
have recently been before the Court of Appeal in South Shropshire District
Council v Amos [1986] 2 EGLR 194. In this case the claimant was
seeking compensation following the confirmation of a discontinuance order. His
written claim, made in 1977, specified various heads of claim, but did not
contain any quantification of the sums involved, stating that the claimant
wished the amount of compensation to be negotiated with his agents. No figures
were submitted on behalf of Mr Amos until a meeting between his agents and the
district council in October 1981. Prior to this meeting the agents had written
to the district valuer indicating that they would there submit a full and final
claim. In the event what was submitted was a document headed ‘without
prejudice’ containing full details of the claim. This did not produce either
agreement or a reference to the Lands Tribunal and following further
correspondence the document was superseded by another, similarly headed
‘without prejudice’, and accompanied by a letter asking for a meeting at which
a settlement could be negotiated. Again there was no settlement and the matter
was referred to the Lands Tribunal. This triggered the issue of the
admissibility of these two documents, since the respondent wished them to be
put before the tribunal and the claimant did not. The Lands Tribunal ruled that
they were not admissible buô this was overturned by Gatehouse J, who decided
that the letters were not offers to settle but merely provided details of the
original unspecified claim.
The Court of
Appeal, however, was clearly satisfied that the documents were inadmissible.
Parker LJ pointed out that the claimant had made clear his intention to negotiate
a settlement from the outset and that, despite the agents’ original letter,
there was no evidence to suggest that the documents were anything other than
negotiations and, as such, they were within the ‘without prejudice rule’.
The court
also took the opportunity of trying to clarify the rules on ‘without
prejudice’; in particular they overruled the decision in Norwich Union Life
Insurance Society v Tony Waller Ltd (1984) 270 EG 42. There it had
been held that a landlord’s ‘trigger notice’ in a rent review could not
successfully be headed ‘without prejudice’ because the parties were not, at
that stage, in dispute. It is now settled that the rubric can be applied to an
‘opening shot’ in negotiations; this view is quite clearly based on the fear
that, if the rule were otherwise, it would be unsafe, in compensation cases, to
offer to settle in respect of an unquantified claim.
