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Published: Fri, 12 Oct 2018
An Example Case Study in Tort of Negligence and Liabilities in Different Scenarios
Alan owns a one-man business organising guided outward-bound trips in the North York Moors. A trip will involve hiking and foraging. Alan’s trips are offered throughout the year and take place in all weather conditions.
Charlotte booked a day trip with Alan for herself and Darren, her twin brother, as a joint-birthday celebration. The trip was scheduled for late January.
Charlotte had learnt about Alan’s trips through his website, which included a link to the business’s terms and conditions Charlotte made her booking over the telephone and, in due course, she received a confirmation in the post. On the back of the confirmation letter was an extract from Alan’s terms and conditions stating:
Customers participate in Alan’s holidays at their own risk. Alan excludes any liability, whether caused by breach of express or implied term, for loss suffered by customers on one of Alan’s holidays.
On the day of Charlotte and Darren’s trip Alan misreads his map, which meant that by dusk the group was miles off course. To correct his mistake, Alan decided to take a short-cut to get the group back on track. The particular short-cut Alan chose was through terrain which was well known to be treacherous and which a competent guide would avoid during the winter months. Whilst the group were on the short-cut they were caught up in a land-slide. In the incident, both twins were badly bruised and their expensive hiking equipment was destroyed. They eventually made their way to a nearby village several miles from their intended destination where Alan told the twins that the trip would have to be abandoned. As it was now very late the twins incurred the additional expense of spending the night in the village pub. When Charlotte subsequently complained to Alan, Alan referred Charlotte to the exclusion clause quoted above.
Advise Alan regarding the validity of the exclusion clauses. Advise Charlotte regarding recovering the damages for their
- Damaged hiking equipment
- Expenses of village pub
Is Alan’s exclusion clause valid?
A legally binding contract has been created between Alan and Charlotte as all the components of a contract were present when Charlotte purchased a day trip from Alan. The contract was formed when Charlotte had seen the trip on Alan’s website, called the company to book her trip and subsequently paid for it.
It is essential to look at if the exclusion term was incorporated into the contract and if reasonable steps were taken to bring it to Charlotte’s attention. The case of Parker v South Easter Railway Co1 is of relevance as it was held that an individual cannot escape a contractual term by failing to read the contract but it was essential to recognise if ‘reasonable notice’ was given by the business to give the claimant a chance to read the terms as Mellish LJ stated in the case Parker v South “did not see or know of writing on the ticket, he is not bound by the conditions; that if he knew there was writing on the ticket, he would be bound”2.
Alan’s terms and conditions were available on the business website and on the back of the confirmation ticket which Charlotte viewed when she learnt about the trips on the business website. She also received a copy of them on the back of her ticket, which shows Alan has incorporated the terms correctly.
It must be established that Alan’s services amount to a business as the Unfair Contract Terms Act 1977 requires there to be a ‘business liability’ present3. This is certainly present in this situation however it must also be established as Section 1(3)(a) states the relevant duty should have arisen ‘from things done or to be done …. in the course of business4.’In the case of R&B Customs Brokers v United Dominion Ltd, Dilion LJ5 inferred that business liability may be referred to as ‘clearly integral parts of the business’6, with this in mind, business liability is present in the exclusion clause as in Alan’s clause the terms are in the course of the hiking trip.
How the term was constructed is significant when determining the validity of the exclusion clause as it can only be effective if wording of the clause relates precisely to the ‘breach’ of the contract. The case of Hollier v Rambler Motors shows that a clause to remove liability was not specific enough the D was “not liable for damage caused by fire to customer’s cars on the premises7. Alan’s terms and conditions are clear and unambiguous and have been constructed appropriately. Nevertheless, terms of this kind are subject to a reasonableness test; which is detailed under the Unfair Contract Terms Act 1977, Section 2 states ‘a person cannot by reference to any contract term or to a notice given to persons generally or to particular person exclude his liability for death or personal injury resulting from negligence’8.
Section 2 of the Unfair Contracts Terms Act 1967 provides a provision which limits the content of terms in a contract9. This section therefore has significant relevance for Charlotte as it deals with the attempted exclusion or restriction of liability for negligence. Section 2(2) renders the ‘exclusion or restriction ineffective’ so long as it satisfies the requirement of reasonableness and extends to ‘other loss or damage’10 such as economic loss. Section 2(3) also states that a person’s agreement to or awareness is not itself to be taken as indicating his voluntary acceptance of any risk11.
Section 2(2) requires the term to satisfy the reasonableness test to be effective and reasonableness is detailed in Section 11 of the Unfair Contracts Terms Act 1977 as ‘fair and reasonable having regard to the circumstances which were, or ought reasonably to have been known in the contemplation of the parties’12. The basic approach to determine this is the gathering and weighing of the relevant factors and for the courts to determine which side of the balance comes down primarily in relation to s11 (1) of the Unfair Contracts Terms Act13. Additional factors that will also be considered will be whether there was equal bargaining strength between partners or whether an advantage was taken by one party.
Alan’s exclusion clause, intends to remove all liability as it states ‘express or implied’ and does not consider obligations under the Sales of Goods and Services Act14. Alongside this Act, Section 2 of the Unfair Contract Terms Act 197715 deems the term invalid for the purposes of inducing liability. The chances of personal injury occurring on an outward hiking trip in the winter are likely and the terms and conditions should compromise this and not be contrary to good faith which as a result has caused a significance imbalance in rights. Although Alan has specified the terms very clearly Section 2(3)16 removes any acceptance Charlotte may or may not have implied because of Alan’s removal of liability in the term. Therefore on the facts presented Alan’s exclusion clause lacks validity.
Charlotte: Can she recover damages for personal injury, her hiking equipment and her additional expenses?
Now for Charlotte to recover damages it is essential that there was some form of negligence suffered and the modern law of negligence was established in Donoghue v Stevenson17 whereby it was expressed that the claimant must prove the defendant owed and breached a duty of care18. It must be also established by the claimant that the breach of duty caused the damage and the damage was not too remote, were all four elements are satisfied the claimant will be successful in a negligence claim19.
To begin with the damages for Charlotte’s personal injury and hiking equipment a duty of care needs to be established. The test to determine whether a duty of care exists was created by Lord Bridge in the case of Caparo Industries plc v Dickman20 where the Caparo Test was formulated, it was said “in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist”21. Given the nature of the contract with Alan and the nature of his service, there is sufficient proximity as Alan was aware of Charlotte’s booking and could forsee the events that may have occurred between the two parties; this creates a duty of care.
Whether the duty has been breached is also necessary to establish and the objective test used to determine this was laid down in Vaughan v Menlove22 where the defendant’s haystack caught fire, he argued he had used his best judgement and did not see any risk of fire, the court held his best judgement was not enough. The court held that he was to be judged by the standard of a reasonable man23. Applying the objective test to this scenario it is clear there is a breach of a duty of care because the reasonable man would ensure that as a trip guide he is familiar with the route he wishes to take the customers through. As this is Alan’s profession, it is essential to have not misread the map or to not take a short-cut which is well known to be treacherous in the winter months as the customers may be endangered.
The next requirement to establish a claim for negligence is causation, which shows the breach of duty caused the damage to the claimant. The test to apply for this is the ‘but for test’ which was established in Varnett v Chelsea & Kensington Hospital24 and in this scenario the test is ‘but for Alan’s incompetent behavior on the trip would the injuries have occurred’ no injuries would have occurred if Alan had not taken a short-cut as Charlotte and her sibling were caught up in a landslide and badly bruised from the short cut route. Given the trip was guided and lead by Alan it is clear to see that his actions have lead to the injuries and there is no intervening act to break the chain of causation. The hiking equipment damaged has also occurred as a direct result of Alan’s negligence as a trip guide and applying the ‘but for test’ one may conclude that this damage, like the personal injury, would not have occurred had Alan not have breached his duty of care.
The final requirement is to assess the remoteness of damages, the standard test set is The Wagon Mound25 this asks whether the damage is of a kind that was forseeable and if so then the defendant is liable for the full extent of the damage no matter whether the extent of damage was forseeable 26. The defendant is also liable for loss much greater than expected. The injuries suffered by Charlotte and her sibling consist of bruising and this was type of injury was forseeable by the Alan as it was well known that the short cut is dangerous in the winter conditions.
As a result of this, the damages for the injuries are not too remote to claim a form of compensation from and the Wagon Mound test is satisfied as Alan’s negligence was of a forseeable kind. As for the damage to the hiking equipment, the Wagon Mound27 case expresses that if the damage was forseeable then the defendant is liable for the full extent, which is the hiking equipment. The hiking equipment was within close proximity of Charlotte and therefore a landslide would surely cause personal injuries and damages to property in close surroundings.
In regards to the expenses for the ‘additional expense of spending the night in the village pub’ this may be described as pure economic loss or consequential resulting from the personal injury negligence. The term ‘pure’ suggests a loss must be self-representative and separated from other losses and may be recovered using the law of contract where there has been a breach. It has been established that Alan may well have breached his contract by using unfair terms so any loss may be recoverable through the law of contract.
Consequential loss can be recovered were the economic loss derives from the personal injury28. The law of negligence may recover the economic loss Charlotte has suffered.
A duty of care and a breach of duty have already been established so causation and remoteness will be discussed.
The element of causation asks the question of ‘but for Alan’s actions and guidance would the claimants have been “several miles from their intended destination” and abandoned’. Similar to the case of McGee v NCB,29Alan’s actions materially contributed to the harm by placing the claimants in harms way.
The final element to satisfy the requirements of a negligence claim in regards to the expense of the village pub is remoteness. The Wagon Mound test30 applies which asks if the damage was forseeable. Alan, as a trip guide, who operates all year round would be aware of the consequences of a breach of duty of care and the expense of the village pub would have been ominous when he decided to abandon Charlotte late that night. Asking to recover the expense of the village pub will not be considered as too remote as the claimants are merely asking to put themselves in the position they would have been had the negligence not have occurred, a dominant principle itself of tort law31
1 Cunard v Antifyre 1933 1 KB 551, 556.
2 Att-Gen v PYA Quarries Ltd. 1957 2 QB 169.
3 Gertsen v Municipality of Toronto (1974) 41 DLR (3d) 646.
4 R.A. Buckley, Law of Nuisance (2nd edn., Butterworths Law 1996). See also, Tenant v Goldwin (1704) 2 Ld. Raym. 1089; and Barger v Barringer (1909) 151 N. C. 433.
5 Gaunt v Fynney (1872) LR 8 Ch. 8. See also, McLaren, ‘Nuisance Actions and the Environmental Battle’ (1972) 10 Osgoode Hall Law Journal 505.
6 (1865) 11 HLC 642.
7 Desrosiers v Sullivan Farms (1987) 76 N.B.R. (2d) 271 (CA).
8 Heuston & Buckley, Salmond and Heuston on the Law of Torts (Sweet & Maxwell 1987).
9 1943 AC 448.
10 Heuston & Buckley (n 8), 65.
11 Bone v Seale 1975 1 WLR 797.
12 Shelfer v City of London Electric Lighting Co. 1895 1 Ch. 287.
13 Tipping (n 6).
14 Walter v Selfe (1851), 29 L.J.R. (20 N.S.) 433 (Ch.).
15 Matheson v Northcote College Board of Governors 1975 2 NZLR 106.
16 Sturges v Bridgman (1879) 11 Ch.D. 852.
17 Drysdale v Dugas (1896) 26 SCR 20.
18 Heuston & Buckley (n 8), 65. See also, C.S. Kerse, Law Relating to Noise (Oyez Publishing 1975).
19 Polsue and Alfieri Ltd. v Rushmer 1907 AC 121.
20 See contrary opinion in Bamford v Turnley (1860) 3 B. &. S. 62, 122 E.R. 25.
21 1951 3 DLR 577 (PC).
22 Dymond v Pearce 1972 1 QB 496.
23 Tipping (n 6), 650 (Lord Westbury).
24 Dent v Auction Mart (1866) LR 2 Eq 238.
25 Imperial Gas Light and Coke v Broadbent (1859), 7 H.L.C. 600, 11 E.R. 239. See also, Smith v Smith (1875) L.R. 20 Eq. 500; and Beamish v Glenn (1916) 36 O.L.R. 10.
26 Jeremiah Smith, ‘Reasonable Use of One’s Own Property as a Justification for Damage to a Neighbour’ (1917) 17(5) Columbia Law Review 383.
27 1952 O.R. 621 (HC).
28 See contrary view in Att-Gen v Cole 1901 2 Ch. 205.
29 Hopkin v Hamilton Electric Light (1901) 2 O.L.R. 240.
30 1913 1 Ch. 269. See also, Drysdale (n 17).
31 Sturges (n 16).
32 Chapman v Ellesmere 1932 2 KB 431. See also, Buckpitt v Oates 1968 1 All ER 1145.
33 Esso Petroleum Co. Ltd. v Southport Corporation 1956 AC 218.
34 (1955) 95 CLR 43.
35 1964 NZLR 468.
36 Miller v Jackson 1977 QB 966 (Lord Denning M.R.)
37 Neilsen v Redel 1955 1 DLR 125. See also, Smith v Charles Baker & Sons 1891 AC 325.
38 (1845) 4 Clark 104.
39 Commonwealth v Upton (1856) 72 Mass 473.
40 Christine Meisner Rosen, ‘Knowing Industrial Pollution: Nuisance Law and the Power of Tradition in a Time of Rapid Economic Change, 1840-1864’ (2003) 8(4) Environmental History 565.
41 (1838) 4 Bing NC 183.
42 1977 QB 966.
43 (1858) 4 K. &. J. 528, 70 E.R. 220.
44 Miller (n 36).
45 Kennaway v Thompson 1981 QB 88.
46 Barker v The Queen (1983) 153 CLR 338; and Perera v Vandiyar 1953 1 WLR 672.
47 (1681) 3 Lev 37.
48 Entick v Carrington (1765) 19 St. Tr. 1029; and Woolerton and Wilson Ltd v Richard Costain Ltd. (1970) 1 W.L.R. 411.
49 (1874) L.R. 10 C.&.P 10.
50 Westripp v Baldock 1939 1 All ER 279.
51 Gregory v Piper (1829) 9 B & C 591.
52 Ashby v White (1703) 2 Ld.Raym 938.
53 Mann v Saulnier (1959) 19 DLR (2d) 130.
54 Holmes v Wilson (1839) 10 A&E 503; and Konskier v Goodman Ltd 1928 1 KB 421.
55 (1966) 53 DLR (2d) 549.
56 (1981) 120 DLR (3d) 641.
57 1949 2 KB 239.
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