NEGLIGENCE CONTENTS

INTRODUCTION

Negligence as a separate tort emerged only in the 19th Century. Prior thereto, it was basis of other action like nuisance and trespass. It was subsumed under the action on the case. With the growth of science and technology and mechanical inventions and increase in negligently inflicted injuries, coupled with abolition of forms of action, negligence became a separate tort with its distinct form of principles. Today, it is the most important tort.
Street has noted that more people suffer damages from careless acts of others than from intentional ones. Rereprectably, it is not the law that a person suffering damages as a result of careless conduct can sue in tort. The reason is that careless acts do not necessary constitute the tort of negligence.

According to Lard Wright, “negligence, in strict legal analysis means more than headless or careless conduct, whether in omission or commission: it properly connotes the complex concept of duty, break and damage thereby suffered by the person to whom the duty was owing”
In this and the next units, we shall be considering these three elements of the tort of negligence duty, break of duty and ensuing damage

Negligence

This is certainly the most important tort. You have already learnt of the celebrated negligence case, Donoghue v Stevenson [1932] AC562 – the case about the snail in the ginger beer bottle. The law of negligence has grown in its use and important since that case. Everyday, new cases are testing the extent of liability in negligence such as hotel to its patrons or cigarette companies to consumers and those in the vicinity of smokers.

Elements of Negligence

There are four elements which must be established for an action in negligence to be successful. These are:

Duty of care; Breach of the duty Loss caused by the defendant’s breach; and Damage suffered is not too remote.

Duty of CareThe objective of the first element is to establish if a duty of care is owed to the person suffering damage. The test for duty of care has two parts:
a. reasonable foreseeability of harm; and
b. proximity of relationship.

1. Foreseeability For a test of foreseeability of harm the starting point is the ‘negligence principle’ of Lord Atkin in Donoghue v Stevenson. Notice how widely the principle is stated. As Turner mentions, foreseeability is an objective test. This means that it is not who the particular defendant would think might be injured by his or her actions, but who a reasonable person in the defendant’s position would think would be injured by the defendant’s actions.The precise loss or injury to the plaintiff need not be foreseen, more the possibility of loss or injury. Also as long as the plaintiff belongs to a class of persons who the defendant should have realized was at risk (e.g. consumers) then the reasonable foreseeability requirement will be met.Three points to notice about the test of foreseen ability:It is viewed through the eyes of the defendant, or more correctly, a reasonable defendant. The test is objective as distinguished from a subjective one. This distinction arises quite frequently in the law. The objective test is a means of trying to find a norm of behaviour which is acceptable to society. To do this you ask what a ‘reasonable’ driver, repairer, manufacturer (as the case may be) would have done in the particular case. Contrast a subjective test which would enquire into whether the particular defendant thought their behaviour was acceptable. You can imagine the variation that would occur in this situation and it is not permitted in negligence cases. In fact you will find the subjective test is rarely applied by the courts. To pass the test of reasonable foreseeability then the defendant does not have to be the best (driver, repairer, manufacturer etc) – just a reasonable one. 

(b)Proximity

While reasonable foreseeability is general in nature, the second test, proximity, focuses more on the actual relationship between the parties. There are three aspects of proximity: physical, circumstantial and causal but only one needs to be present to establish proximity.
Jaensch v Coffey (1984) 155 CLR 549 considered whether a duty of care was owed in circumstances giving rise to nervous shock.

In this case the plaintiff’s (Mrs. Coffey’s) husband (a police constable) was knocked off from his motor bike by a car which (it was admitted) was being negligently driven at the time. The husband sustained quite serious injuries and was taken to hospital. Mrs. Coffey (the plaintiff) was not at the scene of the accident but was informed by police of it and was taken to the hospital, where she saw her husband in great pain in the casualty ward. The plaintiff waited while her husband was operated upon and after his return from the theater she was told to go home. His condition was described as ‘pretty bad’. Early next morning she was advised that he was in intensive care and a few hours later she was asked to come to the hospital as soon as possible because his condition had deteriorated. The husband survived but remained seriously ill for some weeks.
About six days after the accident the plaintiff showed symptoms of a psychiatric illness. The condition, which was an anxiety depressive state, worsened and she was admitted to a psychiatric ward. At the trial, the defendant admitted he was negligent in his driving but denied that he owed a duty of care to the plaintiff. The High Court held that such a duty was owed.

The major judgment was delivered by Deane J from which the following propositions arise:

1.  Besides reasonable foreseeability it is necessary to consider the notion of proximity in determining the duty of care.
2.  In nervous shock cases in the past it has been necessary to place limits on the ordinary test of reasonable foreseeability by requiring for example, that a duty of care will not arise unless risk of injury in that particular form (i.e. nervous shock) was reasonably foreseeability. This is still the law. Another limitation which had been placed was that the plaintiff had to be within the area of physical danger. This is no longer the case. 
3. However, some limitation must be set for the duty of care and it was that the psychiatric injury must result from contact with the injured person either at the scene or is aftermath. Contrast say after-accident care which occurs after immediate accident treatment and which results in a psychiatric illness. The latter is not actionable. 
4. Deane J categorized nervous shock resulting from the accident or mits aftermath as falling within causal proximity although he did admit that it could also satisfy the requirements of physical proximity in the sense of space and time. It was casual because the psychiatric illness results directly from matters which themselves form part of the accident and its aftermath. There is a clear link between the illness and the accident.

SELF ASSESSMENT

Differentiate between the foreseeability and proximity tests in Negligence.

Re-examination of Proximity

Historically, proximity was developed by the Court to provide an extra control test on the duty of care when they where considering new area of negligence. The reasonable foresseability test worked satisfactorily for the accepted classes of negligence such as motor vehicle accidents, consumer protection cases, industrial injuries and the like – especially where physical injury was involved. However, when a new area was being considered, such as nervous shock to relatives, it was agreed that the foreseeability test was too broad. So Deane, J. formulated the element of proximity as discussed above.
Gradually since Jaensch v Coffey, however, there has been a re-evaluation of the proximity test. The problem is that there is disagreement among members of the Court and considerable uncertainty exists. However, until there is a definitive statement by the Apex Court, lower Courts are continuing to apply the element of proximity and so shall we.

Finally, you should be aware that while foreseeability and proximity are separate tests you will find that quite frequently they overlap. For example, if a driver causes a car accident because they failed to remain on the right hand side of the road it is reasonably foreseeability that they would collide with a car traveling in the opposite direction causing injury to the other driver. This event would also satisfy the element of proximity because of the physical and causal aspects of the collision and the resulting injury.

Breach of the Duty of Care

Having established the first element, duty of care, the next question is to determine if there has been breach of the care.
The essential point here is whether the defendant has breached that duty by failing to exercise the care expected of a ‘reasonably prudent person’. Part of the test is to ask how a reasonable person would have responded to that risk. Turner points to various indicative factors that go to what is the appropriate response to the risk, namely:

Probability of risk; Gravity of the harm; Who carries the burden of eliminating the risk; and

The utility of the conduct in question.

Note the cases which are referred to in connection with each of these ‘indicators’ of the standard of care expected of a reasonable prudent person in the defendant’s position. You should note also that these factors are not elements of whether the standard of care has been reached, but are guide which may or may not apply in a situation to determine the standard of care.

Causation of Loss and Damages

The law must have some means by which the right to recover damages flowing from a negligent act, is limited. It does this in two ways: by imposing the requirement of causation and remoteness. Suppose that an executive is driving to the airport to catch a plane to lodge a tender for a lucrative government contract. On the way to the airport, he is involved in a collision with another driver and his car is extensively damaged. Assume it was the other driver’s fault. The executive misses his plane, fails to lodge the tender in time and does not win the contract. As a result, his company becomes insolvent and many employees lose their job. Should the employees be able to sue the other driver for their loss of wages? Most people would say, ‘that is not fair on the driver to impose that burden’. But how does the law draw the line? This is where the tests for causation and remoteness come in. We consider the issue of remoteness in a moment but first let us look at causation.
As Turner points out – the basic test of causation is the ‘but for’ test. In other words, ‘but for’ the negligence in question the loss would not have been sustained. This test allows the facts to be tested to see if the negligence really causes the loss. Put another way, the court must be satisfied that there is a causal between the negligence and the loss. Suppose in the situation above it can be established that the executive would not have missed the plane anyway because he left the office too late, that the tender would not have won the government contract even if it was lodged in time or that the company would have become insolvent because of the recession, whether or not it obtained the contract in question. In each of these cases a claim by the employees or the company itself would not survive the ‘but-for’ test. There is no causal link between the negligence of the other driver and the loss or wage. So one way to test for causation is to see if there are any intervening factors operating between the negligence and the loss. In the above example, the lateness of the executive in leaving to catch the plan, the fact that the tender would not have been successful in any event, the economic recession are all intervening events that break the chain of causation.

Turner provides an example of where the plaintiff failed to satisfy the causation requirement, namely, Cummings v Sir Williams Arrol & Co Ltd [1962] 1 ALL ER 623.In the situation described above most observers would say that the employees who lost their jobs should not recover but how does the law draw the line? The causation requirement provides one limit but there is another. The damage suffered by the plaintiff must be of the kind or type which was reasonably foreseeable by the defendant. Fairly obviously it would not have been reasonably foreseeable for the negligent motorist who ran into the executive (in the example above) that by doing so he would throw employees out of work and be liable to compensate them for their loss of income.


While a similar test is used to determine remoteness as to determine the duty of care, reasonable foreseeability, the emphasis in applying the test to the remoteness question is on whether the damage is foreseeable and also whether it is of the kind or type of damage. The general test of remoteness is laid down in the Wagon Mound case )Overseas Tankshoip (UK) Ltd v Morts Dock & Engineering Co Ltd.) [1961] AC 388. The case provides a good illustration of how the test is applied.

SELF ASSESSMENT

1. What are the four elements of the tort of Negligence?
2. What are the tests used in respect of each element to see if it is present? 

Professional Negligence One important branch of the law of negligence concerns the liability of professionals such a accountants, lawyers, investment advisors and the like for advice given to clients and others. While the general principles of negligence still apply, the courts in this area have developed some specific rules to handle particular activities and professions.
Before looking at the relevant aspects of negligence, it should be noted that in many cases professionals will be liable to their clients in contract. The liability from contract will frequently overlap with that of tort because the contract will have an express or implied term that the professional will exercise reasonable care and skill in return for the fee charged. What we are primarily concerned about here is the liability of the professional to third parties, that is those who are not in a contractual relationship with the person alleged to be negligent.

Liability to Third Parties In this course, we focus on the ability of the professional for providing negligent advice or information (known as negligent mis-statement). However, it will soon be seen that this is not the only source of liability to third parties. An example of where a professional was held liable to a their party through their actions rather than words is Re Hill & Associated v. Van Erp (1997) 142 ALR 687. A Solicitor drew a will for a client and under the will property was bequeathed to a Mrs. Van Erp. Unfortunately the solicitor arranged for Mrs. Van Erp’s husband to witness the will. Under the law, any gift by will to a person or spouse of a person who witnesses a will is void. Mrs. Van Erp sued the solicitor in negligence. As Mrs. Van Erp and the interest intended for her were clearly identified in the will, the majority of the Court felt that there was sufficient proximity to find a duty of care by the solicitor to Mrs. Van Erp.
Negligent Mis-Statement In the past, it was possible for a plaintiff to recover financial loss but it had to be associated with some form of physical injury or damage. So the plaintiff in Donoghue v Stevenson, for example, could recover lost wages if she had to take time off from work but only because it was a by-product of her physical illness. Another relevant limitation to negligent claims was that the defendant was not liable for negligent words alone but only for negligent acts. The reluctance to allow a claim for negligent words alone stemmed from the perception that it would result in too wide a range of claims and for excessive amounts. Over time, however, pressure increased on the courts to recognize that, ‘pure’ financial loss (i.e. loss not associated with some other injury) was just as real as other forms of loss and that it was appropriate for plaintiff in these cases to be compensated.


The first case to allow a claim for pure financial loss was Hedley Byrne v Heller Partners in 1964. The following elements for negligent misstatement were developed:

1.  If a person gives information or advice to another; 
2. On serious matter; 
3. In circumstances where the speaker realizes, or ought to realize; 
4.  That he or she is being trusted to give the best of their information or advice; 
5. As a basis for action by the other party; 
6.  And it is reasonable for the other party to rely on that advice. 

Then the speaker comes under a duty of care.

Notice that these six elements only go to form the duty of care. The other elements of negligence (breach, causation and remoteness of damage) still have to be satisfied separately. While these six elements are quite specific in their operation they are still broadly concerned with the relationship between the parties and whether there is the required closeness to impose the duty of care.

There are many more cases on negligent misstatement and, as you might expect, a number of subtle variations and exceptions for different applications of the basic duty. These matters are beyond the scope of this course.
Liability of Auditors As mentioned above, from the time that the Courts has first sanctioned negligent misstatement actions, there have been concerns that liability could spread too widely. Auditors are a particularly vulnerable group. Public companies must have their accounts audited and the results of these audits become known to the general business community. Could an auditor be liable to a person who buys shares in the company on the strength of the audit where the auditing was performed negligently and did not reveal grave financial difficulties?

For some years the law in this area was quite unclear but was finally settled in Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1997) 71 ALJR448.

The appellant, Esanda, had lent money to various companies in the Excel Finance Group. Peat Marwick Hungerfords (PMH) were the auditors of the Excel group and Esanda alleged that PMH had been negligent in carrying our their duties, that Esanda had entered into the transactions in reliance on the audited accounts and as a result of the negligence had suffered economic loss when Excel went into receivership. In claiming that PMH had owed it a duty of care, Esanda pleaded in essence that the loss was foreseeable by reason of Esanda’s reliance on the audited accounts of Excel. No evidence was led to show that PMH was aware Esanda would be relying on the company accounts. Thus Esanda had done no more than plead reasonable foreseeability and had failed to allege the existence of a relationship of proximity.
The Appellate Court held that mere foreseeability was insufficient to establish the existence of a duty of care founding a claim for negligence misstatement. The appellant also should have pleaded that there existed a relationship of proximity between it and PMH.


The Court concluded that there were no circumstances which took the case out of the general rule that a person is not liable for negligent statements unless she/he intended to induce another to rely upon such statements, or in the absence of such intention, she/he knew that the statement would be communicated to the other; either as an individual or as a member of an identifiable class, in connection with a particular transaction or transactions of a particular kind and that the other would very likely rely on it for the purpose of deciding whether to enter into the transaction/s.

SELF ASSESSMENT

1. What is the purpose of an award of damages in the tort? 
2. Explain the legal principles for determining the extents of damages claimable in an action in the tort of negligence 

Disclaimers

Exclusion clauses or disclaimers are clauses which seek to exclude or excuse a person from liability which night otherwise attach to them. For present purposes you should note that there is real doubt as to whether a disclaimer can exclude a duty of care. This is because the duty is imposed by the Court as distinct from a contractual disclaimer which is based on enforcement of a contractual term. (As we shall see later even contractual disclaimers are often ineffective). What does seem to be clear is that where the defendant is the only source of information or advice, then a disclaimer will not be enforced. After Shaddock’s case many local authorities inserted disclaimer clauses when giving information concerning properties within the local authority area but this has been held to be ineffective Mid Density-Developments Pty Ltd V Rockdale Municipal Council (1993) 116 ALR 460.

Defences to Actions in Negligence

•Contributory Negligence
If the executive in our situation outlined earlier was partly at fault then the damages that could be recovered from the other driver for either the repairs to his car, or any personal injuries would be reduced to the extent of that fault. Contributory negligence used to be a complete defence but now under legislative provisions such as the Law Reform (Miscellaneous Provisions) Act there is an apportionment of liability and hence an apportionment of damage. It is commonly pleaded as a defence in traffic cases because of the strong likelihood that both drivers are at fault. The quantum of damages claimed is reduced by the percentage, which the plaintiff is found to have contributed to those damages.

Voluntary Assumption of Risk

Known also by its latin maxim volenti non fit injuria, the principle here is that a person cannot complain of a risk if they have consented to it. A footballer would not be able to sue a fellow footballer for injuries received in a game, assuming the rules were being complied with at the time.
To establish the defence, the plaintiff must have(a) fully appreciated the risk, and

(b) accepted it willingly.

This can lead to some interesting situations where a passenger sues an intoxicated driver of a motor car for injuries received. On the face of it, the defendant driver would have a defence of volenti but not so if the plaintiff was sufficiently intoxicated so that he or she could not appreciate the risk!

CONCLUSION

The case of Donoghue v Stenenson is very instructive. Read it out again and again. Note the dictum of Lard Atkin. Negligence must fail where duty-situation is absent. It is not a duty in the air. It is owned to somebody. Loss may be physical or economic the degree of care which a duty involves must be proportioned to the degree of risk involved if the duty of care should not be fulfilled. Note the important case of Hedley Bryne & Co Ltd v. Heller & Partners Ltd (1964). Damage must not be too remote: the Wagon Mound case (1961). Test applied is objective. Defences to negligence include contributory negligence, voluntary assumption of risk (volente non-fit injuria)

SUMMARY

Perhaps at this point you need not be too concerned with the detail. In the context of negligence you should be aware of the role of tort law in compensating the plaintiff but also the need to ensure that the law is fair on the defendant. Against this background much of the development of negligence has been on finding ways of defining the limits to the right of recovery by the plaintiff. One way that this is achieved in negligence is the imposition of the objective test of the ‘reasonable person’.
At this stage, you may need to go back over your work and more closely at the content of the area in question. Here you need to know the four elements of negligence and the different roles played by each of those elements. With the first element, the duty of care is concerned to establish whether there was sufficient closeness between the plaintiff and the defendant. The second, the breach of that duty focuses on the standard of care expected and the final two elements on the limitations to be placed on the damages that can be recovered.

Hand in hand with the elements are the legal tests for each element. These are important as the elements themselves for without them the elements are meaningless. Here, notice how the notion of reasonableness appears in the tests for the first, second and fourth elements although the tests are designed to achieve different aims.

TUTOR-MARKED

Chidi was shopping at her local supermarket on Saturday morning when she supped on some wet substance that had been split on the floor. She fractured her pelvis. Three weeks later still recovering in hospital, she fell down a flight of stairs and fractured her other leg.

1.  Does the Supermarket owe Chidi a duty of care? 
2. Has there been a breach of duty of care? 
3.  Can Chidi claim damages from the supermarket in respect of: i. injury one ii. injury two