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IN
THE SUPREME COURT OF JUDICATURE
QBENI
97/1351 CMS1
IN
THE COURT OF APPEAL (CIVIL DIVISION
)
ON
APPEAL FROM THE QUEEN'S BENCH DIVISION
(HIS
HONOUR JUDGE ROGER COX (sitting as a High Court Judge
))
Royal
Courts of Justice
Strand
London
W2A 2LL
Friday,
24th April 1998
B
e f o r e
THE
VICE-CHANCELLOR
(The
Rt Hon Sir Richard Scott
)
The
Rt Hon Lord Justice Auld
TheRt
Hon Lord Justice Schiemann
BETWEEN:
JOHN
TERENCE GEORGE HARRIS
Respondent
and
(1)
GLYNNE EVANS
(2)
HEALTH AND SAFETY EXECUTIVE
Appellants
(Transcript
of the Handed-Down Judgment of
Smith
Bernal Reporting Limited, 180 Fleet Street
London
EC4A 2HD
Tel:
0171 404 1424
Official
Shorthand Writers to the Court)
MR
PHILIP ASTOR
(instructed by the Treasury Solicitor, London SW1H 9JS) appeared on behalf of
the Appellants/Defendants.
MR
RICHARD STEAD
(instructed by Messrs Crosse & Crosse, DX 8313 Exeter) appeared on behalf
of the Respondent/Plaintiff.
J
U D G M E N T
(As
approved by the Court
)
Crown
Copyright
VICE-CHANCELLOR:-
The
issue on this appeal is whether Mr Glynne Evans, an inspector of the Health and
Safety Executive (the HSE), who in the course of his duties gave advice to
certain local authorities about the safety of a mobile telescopic crane used by
the Plaintiff for the purposes of his bungee jumping business, owed a duty of
care to the Plaintiff as to the content of his advice.
By
a writ and Statement of Claim issued on 23 September 1996, the Plaintiff, Mr
John Harris, claimed damages both from Mr Evans and from the HSE for alleged
negligence on the part of Mr Evans in giving the advice to the local
authorities. There was also a claim for damages for misfeasance in public
office, but nothing now turns on that.
The
story, as told by the Statement of Claim, is as follows:-
In
1992 Mr Harris commenced the business of providing bungee jumping facilities to
members of the public. He did so by using a mobile telescopic crane.
One
of the functions of the Health and Safety Executive, established by the Health
and Safety at Work Etc Act 1974 (´the 1974 Act’), is to provide an
advisory service which can be consulted by entrepreneurs, such as Mr Harris,
desirous of carrying on potentially hazardous or risky undertakings. So, in
October or November 1992, Mr Harris contacted an officer of the HSE, Miss
Monica Finan, in order to ascertain the HSE’s safety requirements for
bungee jumping from mobile telescopic cranes. Mr Harris was told by Miss Finan
that he would satisfy the HSE’s safety requirements if he complied with a
Code of Practice published by the Standard Association of British Bungee (para.
3 of the Statement of Claim). It is not alleged that this advice was incorrect
or in any respect negligent.
In
December 1992 Mr Harris started to offer bungee jumping to the public at
various sites in the south-west of England. He has at all material times
complied with the Code of Practice (para. 4 of the Statement of Claim).
On
4 July 1993 Mr Evans carried out an inspection of Mr Harris’ mobile crane
and equipment. It was at a site in Newton Abbot, Devon. Having done so, Mr
Evans gave written advice to Teignbridge District Council. He advised on a
number of steps to be taken and advised, in particular, that the crane should
not be used for bungee jumping until it had been certified fit for that special
purpose and that the certification should be undertaken either by some
competent person appointed by the National Certification System for Insurance
Inspection Bodies (the ´NCSIIB’) or by the manufacturer of the crane
(para. 5 of the Statement of Claim).
Acting
on the advice given by Mr Evans, Teignbridge District Council, on or about 27
July 1993, served on Mr Harris two Improvement Notices. The first Notice,
after stating that Mr Harris was in breach of sections 2 and 3 of the 1974 Act
in that he had not taken all reasonable steps to ensure that the mobile crane
was safe for bungee jumping, required him to take certain specified remedial
steps by 20 August 1993. The steps included obtaining the certification that
Mr Evans had advised should be obtained. The second Notice added three further
remedial steps to be taken (paras 6 and 7 of the Statement of Claim).
Mr
Harris complied with the Improvement Notices in all respects save in respect of
the certification of the crane as fit for bungee jumping. It is Mr
Harris’ case that the certification requirement was impracticable, first,
because it was not the practice of the NCSIIB to certify the suitability of
plant or equipment for any particular use and, secondly, because the
manufacturer of the crane could not be expected to be willing to certify that
the crane was fit for a novel use for which it had neither been designed nor
constructed (para. 15(4) of the Statement of Claim). As a consequence of Mr
Harris’ failure, or perhaps inability, to comply with the certification
requirement, Teignbridge District Council served on him a Prohibition Notice
dated 22 August 1993. The Prohibition Notice, after stating that Mr Harris was
in breach of sections 2 and 3 of the 1974 Act and that the certification
required by the first Improvement Notice had not been obtained, directed that
his use of the crane for bungee jumping should cease until the certification
had been obtained (para. 8 of the Statement of Claim).
On
or about 21 August 1993 Mr Evans gave advice to Torridge District Council in
similar terms to the advice he had given to Teignbridge District Council. In
consequence Torridge District Council made it known to Mr Harris that he were
to offer bungee jumping from his mobile crane in their area, they would serve a
Prohibition Notice to prevent him from doing so (paras 9 and 10 of the
Statement of Claim).
On
26 August 1993, Mr Harris offered bungee jumping from his crane at a site at
Ilfracombe, Devon. The site is within the area of North Devon District
Council. On receiving advice that bungee jumping from the crane carried a
serious risk of death or serious injury to users of the crane and also to
on-lookers, North Devon District Council issued a Prohibition Notice against Mr
Harris on 26 August 1993 (para. 11 of the Statement of Claim). By whom the
advice was given is not expressly pleaded. The inference however, is that it
was Mr Evans who gave the advice.
Mr
Harris appealed to the Industrial Tribunal against the Improvement Notices and
the Prohibition Notice served by Teignbridge District Council. The appeals
were heard in Exeter on 18 August and 10 September 1993. The appeals were
dismissed on 1 October 1993 (para. 12 of the Statement of Claim). There seems
to have been no appeal against the Prohibition Notice served by North Devon
District Council.
On
or about 30 November 1993 North Devon District Council withdrew its Prohibition
Notice. On or about the same date Torridge District Council lifted the ban
which it had imposed. And on 14 February 1994 Teignbridge District Council
withdrew its Prohibition Notice (para. 13 of the Statement of Claim). These
events, according to the pleading, were the result of the intervention of the
Secretary of State for Employment who, in a letter dated 26 November 1993, to
Mr Patrick Nicholls MP had said:-
“Currently
there is no technical evidence available to show that there is an unacceptable
level of risk from using mobile cranes for bungee jumping. It follows that the
HSE does not have a policy of prohibiting the use of cranes for bungee jumping
... A Prohibition Notice was issued on the basis of advice given by an HSE
Specialist Inspector of Teignbridge District Council, the enforcing authority
in this case, by an HSE Specialist Inspection. He offered advice which was not
in line with the HSE policy stated above”.
The
HSE Specialist Inspector was Mr Evans.
The
legal basis of Mr Harris’ case is pleaded in paragraphs 14 and 15 of the
Statement of Claim. I should set them out in full, as amended:-
“14. The
First and/or Second Defendants owed to the Plaintiff a duty of care to ensure
that the Plaintiff would not be exposed to economic loss by reason of the
negligent exercise of the Second Defendant’s powers under the Health and
Safety at Work Act 1974 and/or negligent advice given by the First and/or
Second Defendant to District Councils in connection with the operation of the
Plaintiff’s said bungee jumping business. It is averred that there was a
proximity in the relationship between the Plaintiff and the Second Defendant,
and the First Defendant as servant or agent of the Second Defendant, by virtue
of the said advice given by Monica Finan, on behalf of the Second Defendant, to
the Plaintiff, and/or by virtue of the fact that the imposition of an
Improvement or Prohibition Notice would adversely affect the Plaintiff and
cause economic loss to the Plaintiff. In advising the Plaintiff as aforesaid
and/or in advising the said District Councils concerning the Plaintiff’s
bungee jumping business the Second Defendant, and the First Defendant as
servant or agent of the Second Defendant, assumed a responsibility to the
Plaintiff.
NEGLIGENCE
15. The
first Defendant, for whom the Second Defendant is vicariously liable, was
negligent in advising Teignbridge, North Devon and Torridge District Councils
as aforesaid and/or the First and/or Second Defendants exercised the statutory
discretion and/or the implementation of that discretion under the Health and
Safety at Work Act 1974 unreasonably, so that the said advice of the First
and/or Second Defendant was outside the ambit of the said discretion in all or
some of the following respects.
PARTICULARS
(1) failed
to make any or any adequate inquiries of Monica Finan and/or other employees of
the Second Defendant to ascertain the policy of the Second Defendant concerning
the use of mobile cranes for bungee jumping. It is averred that the Plaintiff
informed the First Defendant on the 4th of July 1993 and again on the 26th of
July 1993 and again on the 21st of August 1993 that he should consult Monica
Finan of the Second Defendant at the Preston office;
(2) advised
the said District Councils as aforesaid in spite of the then policy of the
Second Defendant that the use of mobile cranes was not prohibited for bungee
jumping and that there was no requirement for the testing or certification of
cranes for such use;
(3) failed
to have any or any adequate regard to the fact that the Plaintiff had complied
with the code of Practice as recommended by Monica Finan acting for or on
behalf of the Second Defendant;
(4) required
that the Plaintiff should provide certification from a competent person
appointed under the NCSIIB when he knew or ought to have known that such a
competent person would not so certify the crane, the NCSIIB being solely
concerned with in-service inspections of plant and equipment and not with
certifying the suitability of any plant or equipment for any given application;
(5) required
that the Plaintiff should provide certification from the crane maker when he
knew or ought to have known that the crane maker would be unlikely to provide
such certification the crane not having been designed or constructed with
bungee jumping being foreseen as a use for the crane;
(6) failed
to apply the then current policy of the Second Defendant in respect of bungee
jumping from mobile telescopic cranes when he knew or ought to have known that
he was acting contrary to the said policy, and that by advising the said
District Councils as aforesaid contrary to the second Defendant’s policy
he would cause economic loss to the Plaintiff;
(6A) failed
and/or advised as aforesaid and/or caused the Prohibition and/or Improvement
Notices to be served, when at all material times the said crane was so far as
was reasonably practicable, and in any event, safe so that no person was
exposed to a risk to health and safety as a result of the use of the said crane
for bungee jumping.
(7) caused
the said Prohibition and Improvement Notices to be served as aforesaid”.
Paragraph
16 of the Statement of Claim pleaded the misfeasance in public office claim.
That claim has now gone. Paragraph 17 described the damage that Mr Harris
seeks to recover. It includes loss of income as a result of being unable to
operate in the areas of the respective District Councils and also legal fees
and experts fees incurred in unsuccessfully appealing against the Notices
issued by Teignbridge District Council.
The
Defendants to the action, Mr Evans and the HSE, applied to have the Statement
of Claim struck out as disclosing no cause of action. On 12 May 1997 Master
Trench acceded to the application, struck out the Statement of Claim and
dismissed the action. The Plaintiff appealed. The appeal came before His
Honour Judge Roger Cox, sitting as a judge of the High Court, on 31 July 1997.
He allowed the appeal so far as the claim in negligence was concerned but
upheld Master Trench so far as the misfeasance in public office claim was
concerned. He refused the Defendants’ application for leave to appeal.
Leave
to appeal was granted to the Defendants by Hirst L.J. on 2 October 1997. No
application for leave to appeal was made by the Plaintiff. So the misfeasance
in public office claim is dead and the issue for us to decide is whether the
Plaintiff has an arguable case in negligence.
Mr
Carlisle Q.C., for the appellant Defendants, advanced two grounds for the
striking out of the negligence claim. First, he submitted that, given the
statutory backcloth to the advice given by Mr Evans on which the negligence
claim is based, the Defendants did not owe the Plaintiff a common law duty of
care to avoid economic loss to his business. Second, he submitted that Mr
Evans, in giving his advice to the Councils, was entitled to the immunity from
suit accorded to witnesses in legal proceedings. A third ground, raised in the
course of the hearing, is that the negligence action represents an
impermissible attempt by the Plaintiff to re-litigate the issues which were
decided against him by the industrial tribunal.
Both
the first two grounds depend upon and require a careful examination of the
structure and purpose of the statutory provisions in the 1974 Act and of Mr
Evans’ role in giving to the Councils the advice complained of. As to
the first ground, it is trite law that both the existence and the extent of a
duty of care owed by A to B depend upon the particular circumstances of the
case.
Hedley
Byrne -v- Heller
[1964] AC 465 established that an action in negligence can be brought to
recover economic loss caused by a negligent misstatement. It did not and could
not establish that an individual whose negligent misstatement has caused
economic loss to another will necessarily be liable for the loss.
White
-v- Jones
[1995] 2AC 207 established that a negligent discharge by a solicitor of his
duty to his client that causes economic loss to a third party is capable of
constituting a breach of a tortious duty of care owed by the solicitor to the
third party. The case did not and could not establish that when a solicitor is
discharging his duty to his client he owes a duty of care to anyone whose
economic interests may be affected by what he is doing. Whether there is
liability will depend in every case upon whether in the particular
circumstances of the case the negligent misstatement or negligent conduct was
in breach of a duty of care owed to the person who has suffered the economic
loss. The question in the present case is whether Mr Evans’ advice to
the Councils, assumed to be incorrect and to have been negligently given, was a
breach of a duty of care owed by Mr Evans to the Plaintiff, Mr Harris. The
circumstances of the case, on which will depend the answer to the question,
include, in particular, that Mr Evans was giving the advice as an HSE inspector
and that the consequences of the advice which caused the damage to the
Plaintiff’s business were decisions taken and powers exercised by the
Councils pursuant to their duties and powers under the 1974 Act.
Section
1(1) of the 1974 Act expressly states the purpose of the Act:-
“(1) The
provisions of this Part shall have effect with a view to -
(a) securing
the health, safety and welfare of persons at work;
(b) protecting
persons other than persons at work against risks to health or safety arising
out of or in connection with the activities of persons at work;
(c) controlling
the keeping and use of explosive or highly flammable or otherwise dangerous
substances, and generally preventing the unlawful acquisition, possession and
use of such substances”.
Section
2 prescribes duties owed by employers to their employees.
“2(1) It
shall be the duty of every employer to ensure, so far as is reasonably
practicable, the health, safety and welfare at work of all his employees”.
Subsection
(2) specifies specific duties. Among these is:
“(a) the
provision and maintenance of plant and systems of work that are, so far as is
reasonably practicable, safe and without risks to health”.
Section
3 prescribes duties owed to other persons, e.g., bystanders or passers by, or,
in the case of sporting activities, participants.
“3(1) It
shall be the duty of every employer to conduct his undertaking in such a way as
to ensure, so far as is reasonably practicable, that persons not in his
employment who may be affected thereby are not thereby exposed to risks to
their health or safety.
(2) It
shall be the duty of every self-employed person to conduct his undertaking in
such a way as to ensure, so far as is reasonably practicable, that he and other
persons (not being his employees) who may be affected thereby are not thereby
exposed to risks to their health or safety”.
The
effect of sections 2 and 3, for present purposes, is that Mr Harris in
operating his bungee business was under a statutory duty, both to his employees
working on or near to the mobile crane and to members of the public taking part
in or watching the bungee jumping, to ensure so far as practicable that they
were not exposed to risks to their safety.
Section
10 of the Act established two statutory corporations, the Health and Safety
Commission and the HSE. Section 11 set out in general terms their functions.
Section
11(1) provided that “.... it shall be the general duty of the Commission
to do such things and make such arrangements as it considers appropriate for
the general purposes of this Part [of the Act]” and section 11(2)
provided:-
“(2) It
shall be the duty of the Commission ... -
(a) to
assist and encourage persons concerned with matters relevant to any of the
general purposes of this Part to further those purposes;
(b) to
make such arrangements as it considers appropriate for the carrying out of
research, the publication of the results of research and the provision of
training and information in connection with those purposes, and to encourage
research and the provision of training and information in that connection by
others;
(c) to
make such arrangements as it considers appropriate for securing that government
departments, employers, employees, organisations representing employers and
employees respectively, and other persons concerned with matters relevant to
any of those purposes are provided with an information and advisory service and
are kept informed of, and adequately advised on, such matters”.
Under
section 11(4) it is the duty of the HSE “to exercise on behalf of the
Commission such of the Commissions’ functions as the Commission directs
it to exercise ...”.
It
is common ground that, pursuant to section 11(2) and (4), the HSE’s
officers provide information and advice about health and safety at work
matters. This is the function that Miss Finan was discharging when responding
to Mr Harris’ request for advice as pleaded in paragraph 2 of the
Statement Claim. It is the function which Mr Evans was endeavouring to
discharge when advising the local authorities as pleaded in paragraphs 8 to 11
of the Statement of Claim.
Section
12 of the 1974 Act empowers the Secretary of State to give directions to the
Commission with respect to its functions and section 13(1) sets out, in seven
sub-paragraphs, additional powers exercisable by the Commission. Of these,
sub-paragraph (c) authorises the Commission “to provide (with or without
payment) services or facilities required otherwise than for the general
purposes of this Part in so far as they are required by any Government
Department or other public authority in connection with the exercise by that
department or authority of any of its functions”.
It
is possible to regard section 13(1)(c) as conferring the power under which Mr
Evans was purporting to act when advising the Councils.
Section
18 of the 1974 Act deals with enforcement. Under sub-section (1) the HSE is
made primarily responsible for enforcement of the relevant statutory provisions
but sub-section (2) empowers the Secretary of State by regulations to make
local authorities responsible for enforcement in their respective areas.
Sub-section (4) provides as follows.
“(4) It
shall be the duty of every local authority -
(a) to
make adequate arrangements for the enforcement within their area of the
relevant statutory provisions to the extent that they are by any of those
provisions or by regulations under subsection (2) above made responsible for
their enforcement; and
(b) to
perform the duty imposed on them by the preceding paragraph and any other
functions conferred on them by any of the relevant statutory provisions in
accordance with such guidance as the Commission may give them”.
We
have not been referred to the regulations made by the Secretary of State under
sub-section (2) but it is common ground that the three Councils referred to in
the Statement of Claim had been duly constituted enforcing authorities in their
respective areas (see sub-section (7)).
Sections
19 and 20 of the 1974 Act deal with the appointment and powers of inspectors.
Every “enforcing authority” can appoint inspectors and specify the
powers exercisable by the appointed inspectors. Under section 20(2) the powers
that can be conferred on inspectors include the specific powers set out in
sub-paragraphs (a) to (l) and also “(m) any other power which is
necessary for the purpose [of carrying into effect any of the relevant
statutory provisions within the field of responsibility of the enforcing
authority which appointed him]”. The breadth of the powers that can be
conferred on inspectors is remarkable.
Section
21 deals with Improvement Notices; section 22 with Prohibition Notices.
“21 If
an inspector is of the opinion that a person -
(a) is
contravening one or more of the relevant statutory provisions; or
(b) has
contravened one or more of those provisions in circumstances that make it
likely that the contravention will continue or be repeated,
he
may serve on him a notice (in this Part referred to as ´an improvement
notice’) stating that he is of that opinion, specifying the provision or
provisions as to which he is of that opinion, giving particulars of the reasons
why he is of that opinion, and requiring that person to remedy the
contravention or, as the case may be, the matters occasioning it within such
period (ending not earlier than the period within which an appeal against the
notice can be brought under section 24) as may be specified in the notice.
22(1) This
section applies to any activities which are being or are likely to be carried
on by or under the control of any person, being activities to or in relation to
which any of the relevant statutory provisions apply or will, if the activities
are so carried on, apply.
(2) If
as regards any activities to which this section applies an inspector is of the
opinion that, as carried on or likely to be carried on by or under the control
of the person in question, the activities involve or, as the case may be, will
involve a risk of serious personal injury, the inspector may serve on that
person a notice (in this Part referred to as “a prohibition notice”).
(3) A
prohibition notice shall -
(a) state
that the inspector is of the said opinion;
(b) specify
the matters which in his opinion give or, as the case may be, will give rise to
the said risk;
(c) where
in his opinion any of those matters involves or, as the case may be, will
involve a contravention of any of the relevant statutory provisions, state that
he is of that opinion, specify the provision or provisions as to which he is of
that opinion, and give particulars of the reasons why he is of that opinion; and
(d) direct
that the activities to which the notice relates shall not be carried on by or
under the control of the person on whom the notice is served unless the matters
specified in the notice in pursuance of paragraph (b) above and any associated
contraventions of provisions so specified in pursuance of paragraph (c) above
have been remedied.
(4) A
direction in a prohibition notice in pursuance of subsection (3)(d) above shall
take effect -
(a) at
the end of the period specified in the notice; or
(b) if
the notice so declares, immediately”.
Section
24 provides for appeals against Improvement Notices and Prohibition Notices to
be brought before an industrial tribunal. Sub-section (3) provides:-
“(3) Where
an appeal under this section is brought against a notice within the period
allowed under the preceding subsection, then -
(a) in
the case of an improvement notice, the bringing of the appeal shall have the
effect of suspending the operation of the notice until the appeal is finally
disposed of or, if the appeal is withdrawn, until the withdrawal of the appeal;
(b) in
the case of a prohibition notice, the bringing of the appeal shall have the
like effect if, but only if, on the application of the appellant the tribunal
so directs (and then only from the giving of the direction)”.
It
is of some importance that an appeal against an improvement notice
automatically suspends the operation of the notice whereas an appeal against a
prohibition notice only does if, on an application by the appellant, the
industrial tribunal so directs. In the present case it would have been open to
Mr Harris to have applied for a suspension of the Prohibition Notice issued by
Teignbridge District Council. It seems he did not so apply.
Section
33(1) creates a number of criminal offences. It is sufficient, I think, for
present purposes if I refer to only two of them. It is an offence for a person:-
“(a) to
fail to discharge a duty to which he is subject by virtue of sections 2 to 7;
...
(g) to
contravene any requirement or prohibition imposed by an improvement notice or
prohibition notice ...”.
A
person guilty of an offence under section 33(1)(a) is liable to a fine
(s.33(1A)). A person guilty of an offence under section 33(1)(g) is liable to
a fine or imprisonment (section 33(2A)). There are exceptions which I need not
take time to describe.
Section
38 requires proceedings for an offence to be instituted either by an inspector
or by or with the consent of the Director of Public Prosecutions.
There
is one other section to which I should refer because it might seem at first
sight to be relevant to the question at issue in this case.
Section
26 provides as follows:-
“Where
an action has been brought against an inspector in respect of an act done in
the execution or purported execution of any of the relevant statutory
provisions and the circumstances are such that he is not legally entitled to
require the enforcing authority which appointed him to indemnify him, that
authority may, nevertheless, indemnify him against the whole or part of any
damages and costs or expenses which he may have been ordered to pay or may have
incurred, if the authority is satisfied that he honestly believed that the act
complained of was within his powers and that his duty as an inspector required
or entitled him to do it”.
Mr
Jackson QC has relied on this section, as also did the judge below, as an
indication that a negligence action can be brought against an inspector
“in respect of an act done in the execution or purported execution of any
of the relevant statutory provisions ...”. In my judgment, the section
is wholly neutral on this issue. There are a number of different types of
actions which might be brought against inspectors in respect of acts done by
them in the exercise or purported exercise of their statutory functions or
powers. Actions based on allegedly malicious acts intended to damage the owner
of the business rather than to protect the public from exposure to risks caused
by the business would be an example. It is possible that circumstances might
arise in which actions of trespass or for breach of copyright or tortious
interference with contract could be brought. No doubt other examples can be
brought to mind. The language of section 26, however, neither demonstrates nor
supports the viability of any particular cause of action against an inspector.
I accept and agree with Mr Carlisle’s submission that the section was
simply intended to make clear the propriety, from a vires viewpoint, of an
enforcing authority indemnifying its inspector against liabilities incurred in
defending an action brought against him in respect of an act done in the
exercise or purported exercise of his statutory function or powers.
The
important features of the statutory scheme for present purposes seem to me to
be the following:-
(i) The
purpose of the 1974 Act is to protect the safety of members of the public,
whether employees or others.
(ii) The
statutory duties imposed on employers and on entrepreneurs, such as Mr Harris,
whose businesses involve participation by members of the public are imposed for
that purpose.
(iii) The
very extensive powers that are available to inspectors are made available to
them for that same purpose. Whether in giving advice to local authorities
about safety requirements in relation to particular activities, or in deciding
whether to issue an Improvement Notice and, if so what improvements to require
to be carried out, or in deciding whether to issue a Prohibition Notice,
inspectors are exercising discretionary powers given to them for the purpose of
protecting the safety of members of the public.
In
considering the question whether an entrepreneur, such as Mr Harris, is
conducting his business “in such a way as to ensure, so far as is
reasonably practicable, that persons ... who may be affected thereby are not
thereby exposed to risks to their health or safety” (see section 3(1))
and in deciding what (if any) improvements the entrepreneur should be required
to carry out, the inspector must strike a balance. Absolute safety, where
sporting activities involving some risk are concerned, will be unattainable.
Formula One racing is a good example. National Hunt racing is another. There
will always be risks to the participants, and lesser ones to the onlookers.
The inspector has to take a view as to what would be reasonably practicable.
If he considers that there are reasonably practicable steps that can be taken
to reduce the risks of the activity in question, it must follow that he
considers the entrepreneur to be for the time being in breach of the statutory
duties imposed by sections 2 and 3. In such a case the inspector has a choice
to make as to the power he should exercise. He can institute a prosecution for
a section 33(1)(a) offence. He can serve an Improvement Notice under section
21 specifying the steps that he thinks should be taken to reduce the risks. He
can serve a Prohibition Notice under section 22, if he thinks that the activity
in question involves a risk of serious personal injury. Or, as in the present
case, he can give advice to some other enforcing authority, leaving it to that
authority to make the decision as to what enforcement steps should be taken.
In
R
-v- Board of Trustees of the Science Museum
[1993] ICR 876, Steyn L.J. referred to the Report of the Committee 1970-1972 on
Safety and Health at Work (1972) (Cmnd. 5034), which led to the 1974 Act, and
continued as follows:-
“It
was a central thesis of the report that the development control powers of local
authorities were insufficient to protect members of the public. The report
recommended specific statutory controls exercised directly in the interests of
public safety. This approach explains the battery of powers in the Act of 1974
.... These far reaching statutory powers are linked with section 3(1). It is
therefore, clear that the broad purpose of this part of the legislation was
preventive” (pp 881/2).
I
respectfully agree with the emphasis placed by Steyn L.J. on the preventive
purpose of the legislation. The purpose was to enable inspectors to require
steps to be taken to reduce risks and thereby to avoid accidents.
I
return to the question whether an inspector, when deciding what, if any,
exercise of his powers he should make in respect of a particular business
activity, owes a duty of care to the proprietor of that business.
We
have been referred to a good deal of authority as to the approach we should
adopt in answering this question. The leading authority is
X
(Minors) -v- Bedfordshire County Council
[1995] 2AC 633. The case was one in which children, who alleged that they had
suffered parental abuse and neglect, sued the Council for its negligence in
failing to protect them by instituting care proceedings under the Children Act
1989 and its statutory predecessors. The claims had been struck out as
disclosing no cause of action. The children had appealed. The leading
judgment in the House of Lords was given by Lord Browne-Wilkinson. At p.739 he
said this:-
“If
the plaintiff’s complaint alleges carelessness, not in the taking of a
discretionary decision to do some act, but in the practical manner in which
that act has been performed (e.g. the running of a school) the question whether
or not there is a common law duty of care falls to be decided by applying the
usual principles i.e., those laid down in
Caparo
Industries Plc -v- Dickman
[1990] 2 AC 605, 617-618. Was the damage to the plaintiff reasonably
foreseeable? Was the relationship between the plaintiff and the defendant
sufficiently proximate? Is it just and reasonable to impose a duty of care?
See
Rowling
-v- Takaro Properties Ltd.
[1988] AC 473;
Hill
However
the question whether there is such a common law duty and if so its ambit, must
be profoundly influenced by the statutory framework within which the acts
complained of were done. The position is directly analogous to that in which a
tortious duty of care owed by A to C can arise out of the performance by A of a
contract between A and B.
In
Henderson -v- Merrett Syndicates Ltd.
[1995] 2 AC 145 your Lordships held that A (the managing agent) who had
contracted with B (the members’ agent) to render certain services for C
(the Names) came under a duty of care to C in the performance of those
services. It is clear that any tortious duty of care owed to C in those
circumstances could not be inconsistent with the duty owed in contract by A to
B. Similarly, in my judgment a common law duty of care cannot be imposed on a
statutory duty if the observance of such common law duty of care would be
inconsistent with, or have a tendency to discourage, the due performance by the
local authority of its statutory duties”.
Later
in his judgment, at pages 749 to 751, Lord Browne-Wilkinson addressed himself
to the question whether it was “just and reasonable to superimpose a
common law duty of care on the local authority in relation to the performance
of its statutory duties to protect children”. He held that it was not
for a number of reasons, several of which bear upon the present case.
First,
he held that a common law duty of care would cut across the whole statutory
system set up for the protection of children at risk. Similarly, the 1974 Act
and the regulations made thereunder have set up a statutory system for the
reduction of risks to health and safety caused by dangerous business
activities. The system includes provision for appeals against acts taken by
enforcing authorities in exercise, or purported exercise, of their statutory
powers. If an appeal against an Improvement Notice or a Prohibition Notice
succeeds, the error on the part of the enforcing authority is corrected. If an
appeal fails, how can it then be open to the aggrieved entrepreneur to recover
via a negligence action the damage caused to his business by the Notice that
has been upheld by the industrial tribunal?
Another
reason given by Lord Browne-Wilkinson was that if a liability in damages were
to be imposed, it might well be that local authorities would adopt a more
cautious and defensive approach to their duties. He commented:-
“If
the authority is to be made liable in damages for a negligent decision to
remove a child (such negligence lying in the failure properly first to
investigate the allegations) there would be a substantial temptation to
postpone making such a decision until further inquiries have been made in the
line of getting more concrete facts”.
This
point is one which, in my view, has strong implications in the present case.
The duty of enforcing authorities, whether inspectors or local authorities, is
to have regard to the health and safety of members of the public. If steps
which they think should be taken to improve safety would have an adverse
economic effect on the business enterprise in question, so be it. A tortious
duty which rendered them potentially liable for economic damage to the business
enterprise caused by the steps they were recommending to be taken would, in my
judgment, be very likely to engender untoward cautiousness and the temptation
to which Lord Browne-Wilkinson referred.
Lord
Browne-Wilkinson referred specifically to the statutory complaints procedures
contained in the Child Care Act 1980 and the Children Act 1989 which provided a
means to have grievances investigated. The situation was not one in which no
remedy for maladministration bar an action in tort was available. The same is
true so far as actions by enforcing authorities under the 1974 Act are
concerned. Not only can an Improvement Notice or a Prohibition Notice be
challenged by an appeal to an industrial tribunal but the statutory system
makes provision for the suspension in the meantime of the Notice in question
or, in the case of a Prohibition Notice, an application for its suspension to
be made.
Finally,
Lord Browne-Wilkinson referred to the House of Lords decision in the
Caparo
Case
[1990] 2 AC 605 which “lays down that, in deciding whether to develop
novel categories of negligence the court should proceed incrementally and by
analogy with decided categories”. He concluded:-
“In
my judgment, the courts should proceed with great care before holding liable in
negligence those who have been charged by Parliament with the task of
protecting society from the wrongdoings of others”.
The
guidance as to approach to be found in
X
(Minors) -v- Bedfordshire County Council
suggests, in my judgment, that the negligence action brought by the Plaintiff
in the present case ought not to be permitted.
Mr
Jackson has sought to resist that conclusion in two ways. First he has drawn
our attention to the cases in which a plaintiff has succeeded in recovering by
means of a negligence action economic loss caused by a negligent statement made
by the defendant to a third party and acted on by the third party. In
Spring
-v- Guardian Assurance
[1995] 2 AC 296 the defendant, who had given a negligent reference about the
plaintiff to a prospective employer, was held to have owed a duty of care to
the plaintiff in respect of the reference. In
White
-v- Jones
[1995] 2 AC 207, a solicitor who was negligent in acting on a client’s
testamentary instructions was held liable to the disappointed intended
beneficiaries. Mr Jackson submitted that the allegedly negligent advice given
by Mr Evans to the local authorities and on which the local authorities acted
was similarly capable of founding an action in negligence by an individual who
suffered economic loss as a result of the local authorities’ acts.
However, Mr Jackson’s reliance on these authorities ignores the statutory
framework within which Mr Evans advised and the local authorities acted. It
is, in my opinion, a matter of irrelevance that the Improvement Notices and the
Prohibition Notices served on the plaintiff were issued by the District
Councils rather than by Mr Evans himself. He had power under the 1974 Act to
have issued them himself. His, and the HSE’s, liability in negligence
for the economic consequences of the issue of the Notices cannot, in my
judgment, depend on whether the Councils issued the Notices on his advice or he
issued them himself. Similarly, liability in negligence cannot depend on
whether the threat to issue a Prohibition Notice was made by Torridge District
Council on Mr Evans’ advice or by Mr Evans himself. In each case Mr
Evans gave his advice as an inspector, indeed a specialist inspector (see the
letter of 26 November 1993 from the Secretary of State to Mr Patrick Nicholls
MP), and the question of what, if any, tortious duty of care he owed when
giving his advice cannot sensibly be considered otherwise than in the context
of an inspector’s functions and powers under the 1974 Act.
Mr
Jackson’s alternative submission was that a regulatory official, such as
Mr Evans, when discharging his statutory functions and powers, does owe a
tortious duty of care to the owners of the business enterprises affected by his
decisions. He cited in support
Welton
-v- North Cornwall D.C.
[1997] 1 WLR 570, a decision of the Court of Appeal. The case involved advice
given by an environmental health officer under the Food Act 1984 and the Food
Safety Act 1990. The plaintiffs owned a guest house which constituted
“food premises” for the purpose of the Acts. The officer visited
the premises and told the plaintiffs to execute substantial building works in
order to comply with regulations made under the Acts. The plaintiffs did so
but subsequently discovered that the officer’s requirements had been
vastly in excess of what was required by the regulations. The plaintiffs
brought a negligence action to recover their unnecessary expenditure. The
trial judge found in their favour. The Court of Appeal dismissed their appeal.
The basis of Rose L.J.’s judgment was that the officer, in advising the
plaintiffs as to the works they had to carry out, was assuming a responsibility
to them. He referred to
Henderson
-v- Merrett Syndicates Ltd
[1995] 2 AC 145 in which “Lord Goff went on to re-assert the helpfulness
of the concept of ´assumption of responsibility’”. Rose L.J.
continued:-
“In
the light of this analysis, leaving aside for the moment the existence of the
defendant’s statutory powers and duties, which provided the backcloth and
reason for the relationship between Mr Evans and the plaintiffs, it seems to me
that the judge’s conclusion that the relationship gave rise to a duty of
care within the ambit of the
Hedley
Byrne
principle is unassailable. His unchallenged findings of fact included reliance
by the plaintiffs on Mr Evans and knowledge of such reliance on Mr Evans’
part. Accordingly there was, within
Hedley
Byrne
as subsequently analysed, an assumption of responsibility for Mr Evans and
hence a duty of care owed by him”. (p.580).
Rose
L.J. then went on to consider “the impact of statutory duty on the
relationship in the present case” and said this:-
“...
it seems to me that there are at least three categories of conduct to which the
existence of the defendants’ statutory enforcement duties might have
given rise. First, there might be conduct specifically directed to statutory
enforcement, such as the institution of proceedings before the justices, the
service of an improvement notice and the obtaining of a closure order, in an
emergency or otherwise. Such conduct, even if careless, would only give rise
to common law liability if the circumstances were such as to raise a duty of
care at common law (see per Lord Browne-Wilkinson in
X
(Minors) -v- Bedfordshire County Council
[1995] 2 AC 633, 735); and such a duty is not raised if it is inconsistent
with, or has a tendency to discourage due performance of, the statutory duty:
see per Lord Browne-Wilkinson in
X
(Minors) -v- Bedfordshire County Council
,
at p. 739. Secondly, there is the offering of an advisory service: in so far
as this is merely part and parcel of the defendants’ system for
discharging its statutory duties, liability will be excluded so as not to
impede the due performance of those duties: see Lord Browne-Wilkinson in
X
(Minors) -v- Bedfordshire County Council
,
at p. 763. But in so far as it goes beyond this, the advisory service is
capable of giving rise to a duty of care; and the fact that the service is
offered by reason of the statutory duty is immaterial: see per Lord
Browne-Wilkinson, at p.763. Thirdly, there is the conduct which is at the
heart of this case, namely the imposition by Mr Evans, outwith the legislation,
of detailed requirements enforced by threat of closure and close
supervision”.
Ward
L.J., in his judgment, emphasised the “public interest in not imposing a
common law duty of care if it would render the correct operation of the
statutory duty disproportionately onerous by, for example, deterring
inspections and recommendations for fear of having to defend and meet claims
for negligence which further deplete previous human and financial
resources”. But he made the point that “Looking at the matter from
the point of view of the plaintiffs, they had no other remedy than this
action” and agreed that a duty of care lay.
It
does not seem to me that Rose L.J.’s judgment provides much comfort to
the Plaintiff in the present case. It may be that his reasoning would lead to
the conclusion that Miss Finan, in advising in October or November 1992, owed a
duty of care to the Plaintiff. But, since it is not alleged that her advice
was in any respect negligent, that is immaterial. What seems to me to be more
important is that Rose L.J.’s remarks about the “impact of
statutory duty” indicate that if the officer had served an Improvement
Notice on the plaintiffs requiring them to carry out the excessive works, or
had given advice to some other enforcing authority who had then served the
Improvement Notice, the question whether a duty of care was owed would have
depended upon whether the imposition of the duty of care would have tended to
discourage the performance of the statutory duty. I respectfully agree that
that question would have so depended. But that question, critical in the
present case, was not answered in
Welton
-v- North Cornwall D.C.
There
are, in any event, two notable differences between the facts of the
Welton
case and the facts of the present case. First, in
Welton
the negligent advice was given to and acted on by the plaintiffs. In the
present case the advice was given to and acted on not by the Plaintiff but by
the local authorities in purported exercise of their statutory functions.
Second, the actions of the local authorities which caused the economic damage
sought to be recovered could in the present case have been challenged under
the statutory procedures provided for in the Act. In
Welton,
nothing had been done by the officer that could be challenged under the
comparable statutory procedures. So
Welton
is, in my judgment, distinguishable. And it leaves expressly open the question
whether, if the officer instead of giving advice to the plaintiffs, had served
an Improvement Notice which they had complied with, they could have maintained
their negligence action.
I
must confess, however, that I find some difficulty with the decision. I do not
understand how it was possible to come to the conclusion that the
plaintiffs’ claim based on the principles in the
Hedley
Byrne
case was “incontrovertible” (see Judge L.J. at p. 586) without
considering whether the duty of care contended for was consistent with the
statutory framework of the two Acts. The only reason, I would imagine, why the
plaintiffs had followed the officer’s recommendations was because he was
an environmental health officer under the Acts and, as such, in a position to
serve an Improvement Notice on them if they did not follow his recommendations.
I find it very difficult to accept that the result of the negligence action
could depend upon whether the officer’s advice that the plaintiffs had
followed had been given without the service of an Improvement Notice or had
been incorporated into an Improvement Notice. It seems to me that in either
case the question whether a duty of care was owed should have depended on
whether the imposition of the requisite duty was consistent with the statutory
scheme and the statutory duties lying on the officer, as to which the various
considerations expressed by Lord Browne-Wilkinson in
X
(Minors) -v- Bedfordshire Council
would arise. If the imposition of the duty was not consistent with the
statutory scheme, there should have been no liability under the
Hedley
Byrne
principle or under any other common law duty of care principle.
Be
that as it may, the question for us, left open in
Welton
-v- North Cornwall
,
is whether an enforcing authority, in giving advice that leads to the issue of
Improvement or Prohibition Notices, owes a duty of care to the owner of the
business enterprise in question. In my judgment, subject to one qualification
not relevant to the present case, it does not. It is implicit in the 1974 Act
that Improvement Notices and Prohibition Notices may cause economic loss or
damage to the business enterprise in question. It would, in my view, be
seriously detrimental to the proper discharge by enforcing authorities of their
responsibilities in respect of public health and safety if they were to be
exposed to potential liability in negligence at the suit of the owners of the
businesses adversely affected by their decisions. The 1974 Act itself provides
remedies against errors or excesses on the part of inspectors and enforcing
authorities. I would decline to add the possibility of an action in negligence
to the statutory remedies.
The
one qualification I have in mind is this. It could be that a particular
requirement imposed by an inspector, whether expressed in an Improvement Notice
or Prohibition Notice or expressed in advance advice, might introduce a new
risk or danger not present in the business activity as previously conducted.
The new risk or danger might materialise and result in economic damage to the
business itself as well as physical damage to person or to property. We do not
need to decide the point but I would not be prepared to rule out the
possibility that damage thus caused could be recovered by means of a negligence
action.
Capital
& Counties PLC -v- Hampshire County Council
[1997] 2 AER 865 seems to me to provide support to such an action. But the
present case is not of that sort. Mr Evans’ allegedly negligent advice
did not lead to the introduction of any new danger in the carrying on by the
Plaintiff of his bungee jumping business. What it did do was to lead to
statutory restraints being placed on the Plaintiff’s ability to carry on
his business. A negligence action to compensate the Plaintiff for the damage
thereby caused to his business cannot, in my judgment, be brought.
The
conclusion to which I have come on the duty of care point is sufficient for the
Defendants’ purposes. I should, however, express my view on the two
additional grounds of appeal on which Mr Carlisle has relied. Neither of these
was relied on in the court below.
First,
it is contended that Mr Evans is entitled to immunity from suit in respect of
the advice he gave to the respective local authorities. Reliance is placed on
the line of authorities under which witnesses in court proceedings cannot be
sued in respect of anything said, even if said falsely, maliciously and without
reasonable or probable cause, as part of their evidence in court. The
authorities were examined by the Court of Appeal in
Silcott
-v- Commissioner of Police for the Metropolis
(1996) Vol. 8 ALR 633. Simon Brown L.J. said, at p.640:-
“Protection
must extend to the preparation of evidence equally as to its presentation”.
and
that:-
“...
Drake J was correct in
Evans
to have held that the immunity covers all conduct that can fairly be said to be
part of the investigatory and, I would add, preparatory process”.
Mr
Carlisle submitted that the advice given by Mr Evans on which this negligence
action is based might have led to a prosecution under section 2 or section 3 of
the 1974 Act. If it had led to a prosecution, it would, he said, have been
entitled to witness immunity. In the event, it led not to a prosecution but to
the service of Improvement Notices and Prohibition Notices. These, in turn led
(or could have led) to appeal proceedings before the industrial tribunal. Mr
Evans’ advice was given as part of the preparatory process that led to
the industrial tribunal proceedings and formed part of the evidence that he
would have given, or, perhaps, actually gave.
I
follow the argument, but the immunity contended for cannot, in my judgment, be
relied on in aid of the Defendants’ striking-out application. The
availability of an immunity from suit plea must, in my opinion, depend upon the
purposes for which the statement in question was made. In some cases it may be
obvious that the statement was made for the purpose of court proceedings. In
the present case it is far from obvious. If, at trial, evidence were to be
given by Mr Evans, and accepted by the court, that in giving his advice he had
regarded himself as supplying the local authorities with a statement of the
evidence he would give in proceedings which he expected would follow, it might
be that the immunity could be claimed. But the point is one for trial and not
for a striking-out application.
Finally
there is Mr Carlisle’s point that, because the Plaintiff appealed to the
industrial tribunal against the Teignbridge District Council’s Notices
and lost, he cannot be allowed to re-litigate in a negligence action the
question whether Mr Evans’ advice was competent. The negligence action
is, Mr Carlisle submitted, an impermissible collateral attack upon the decision
of the industrial tribunal.
The
importance, for public policy reasons, of barring “the initiation of
proceedings in a court of justice for the purpose of mounting a collateral
attack upon a final decision against the intending plaintiff which has been
made by another court of competent jurisdiction in previous proceedings
...”. (per Lord Diplock in
Hunter
-v- Chief Constable of the West Midlands Police
[1982] AC 529) was strongly affirmed by Sir Thomas Bingham M.R. (as he then
was) in
Smith
-v- Linskills
[1996] 1 WLR 763 at p. 773. But there are established exceptions to the bar,
one of which is the emergence of fresh evidence. In
Walpole
-v- Partridge & Wilson
[1994] 1QB 106, Ralph Gibson LJ described the exception thus:-
“If
the plaintiff introduces fresh evidence, that is evidence which was not
available, or could not by reasonable diligence have been obtained at the first
trial, which ´entirely changes the aspect of the case’ (see
Hunter’s
case
[1982] AC 529, 545) he may pursue his claim ...”. (p.115).
In
the present case the evidence that led to the withdrawal by Teignbridge
District Council and North Devon District Council of their respective notices
in November 1993 and February 1994 may well have constituted evidence that was
not reasonably available to the Plaintiff at the time of the industrial
tribunal hearing in October 1993. At least it cannot be determined at this
stage of the proceedings what was the availability of that evidence in October
1993. This, too, is not a striking-out point.
Accordingly,
I would allow the appeal on the single ground that an inspector under the 1974
Act cannot be made liable in an action in negligence for economic damage caused
to a business by Notices under the 1974 Act, whether the Notices have been
issued by the inspector himself or by some enforcing authority acting on advice
given by the inspector.
I
would, therefore, allow the appeal and restore the order of the Master
striking-out the action.
Lord
Justice Auld
I
agree.
Lord
Justice Schiemann
I
also agree.
ORDER:
Appeal allowed; order of the master set aside by the judge below be restored;
costs in this court be paid by the Legal Aid Board under
section 18; costs
below be paid by the plaintiff, not to be enforced with leave of the court;
legal aid taxation; leave to appeal to the House of Lords refused.
(Order
not part of approved judgment)
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