The law of Tort.

The main observation to be drawn from the above chronologies is a clear, persistent and inherent reluctance, some one hundred and twenty-five years on from Cattle v. Stockton, to grant recovery for economic loss suffered as a result of a negligent act perpetrated by another, encouraged by the ever-present fear of opening the floodgates and precipitating indeterminate liability, and the desire to uphold a ‘bright line’ rule that maintains certainty in this area.  This is most clear in the United Kingdom, but even in the wake of such cases as McShane in Ireland, it has not yet been established here that recovery will necessarily spread to economic loss as a result of negligent acts, but only that “such loss is not inevitably irrecoverable”.  After all, Anns itself was revoked after an established lifespan of some thirteen years, and the fears it posed were legitimate, even if the solution imposed was less than satisfactory.  A number of questions, therefore, beg answering.  How credible are the floodgates and ‘bright line’ arguments?; should they be invoked to support an absolute ban on recovery for economic loss resulting from a negligent act?; and is there sufficient reason to refuse recovery in cases of negligent acts when it is allowed in cases of negligent misstatements?  In short, have the limits of the duty of care been placed at the correct position?

As regards the floodgates argument, an analysis of the cases in which it has been invoked suggest that it is often being employed arbitrarily and illogically, in many circumstances where it holds little or no weight.  In Candlewood, for instance, the plaintiff boasted a close contractual dependence on the damaged property, yet the floodgates argument was employed for fear of claims being issued by other third parties whose contractual relationships stood to suffer some sort of loss also; the close proximity between the plaintiff and the defendant was therefore not entertained.  Leigh & Sullivan displays an even more compelling situation – here the possibility of indeterminate liability was nil on the facts of the case and yet this argument was still disregarded in favour of a ‘bright line’ general rule.  In D & F Estates and Murphy such was the irrelevance of any floodgates problems that the issues were not even raised.  It becomes quite clear, in this light, that the floodgates argument in itself cannot be justified in completely denying recovery for loss in every circumstance subsequent upon a negligent act.

Yet even when the floodgates argument does not hold, the reasoning of maintaining a so-called ‘bright line’ general rule which promotes commercial certainty is summonsed to reject the possibility of distinguishing between different categories of economic loss.  In the words of Lord Brandon of Oakbrook,

        “where a general rule, which is simple to understand and easy to apply, has been

        established by a long line of authority over many years, I do not think the law should

        allow pleading in a particular case within the general rule to detract from its

        application.  If such a detraction were to be permitted in one particular case, it would

        lead to attempts to have it permitted in a variety of other particular cases, and the

        result would be that the certainty which the application of the general rule presently

        provides, would be seriously undermined.  Yet certainty of the law is of the utmost

        importance, especially but by no means only in commercial matters”.

On principle this argument seems convincing, yet on closer scrutiny it flounders.  The question to be asked here is does the ‘bright line’ of no recovery, so often referred to in support of the floodgates argument, even exist?  For it must be contended that cases such as Junior Books and Ross v. Caunters, by allowing recovery, have served to confuse and contradict, if not to somewhat obliterate, this rule.  Even Hedley Byrne, established as it now is, flies in the face of such apparent logic.  Little attention was given to certainty or established rules in these cases.  With such instances of inconsistency abounding, it is nothing but disingenuous of the courts to insist on refusing recovery in feasible circumstances in order to maintain “certainty of the law”.  Indeed, if the courts insist on being so pedantic then rationale dictates that they should reconsider such cases as Hedley Byrne, Junior Books and Ross v. Caunters.  Viewed in this light, the ‘bright line’ rule looses its conviction and effectiveness as a support for maintaining an exclusionary rule to recovery.

As regards the distinction between economic loss resulting from negligent acts and economic loss resulting from negligent misstatements, it must be inquired as to whether such a distinction is necessary to the extent of denying most, if not all, recovery in the former category and allowing for it in the latter?   The general rationale behind the distinction of negligent misstatements in Hedley Byrne was that with relevant limiting factors, such as reliance and assumption of responsibility, in place, a duty of care could be readily established without fear of imposing any indeterminate liability, and thus it was felt that liability could be imposed.  No argument of maintaining a ‘bright line’ rule was used to deny liability, and over the course of time the Hedley Byrne principle itself has become an established rule in the law of tort.  What this tells us is that “as the courts recognise new categories of cases where economic recovery is available, rules will emerge” which, as well as fending off indeterminate liability, will allow for certainty to take its place within those new categories established.  It therefore seems only logical to extend the possibility of recovery to deserving areas of economic loss resultant upon negligent acts in a similar, although perhaps less rash and ad hoc fashion, manner as Hedley Byrne, instead of using it as a distinction, and imposing relevant restraints to withhold the floodgates, yet still denying recovery if this cannot be done safely.  What will necessarily emerge will be established areas of economic loss upon which recovery can and should be granted, alongside areas in which it should not, therefore allowing for a more even-handed justice while still addressing the issues of indeterminate liability and certainty of the law.

As to what these restraints should be and how they should be formulated and applied, the answer is not so simple.  Clearly the free-for-all approach taken in Anns, as indicated by the harsh reaction in Murphy, is not the solution.  As to what does constitute the correct solution, this issue has been dealt with recently in exhaustive detail by the High Court of Australia in the case of Perre v. Apand.  That a more principled approach to recovery was needed was readily agreed, although setting out such a principled approach proved to be less than simple.  (While many different views were expressed, it was only generally agreed that, once foreseeability and negligence have been established, other control mechanisms to prevent the opening of floodgates could include reliance, vulnerability and legal rights of the injured party, and assumption of responsibility, knowledge of the magnitude of the risk and control of the negligent party.)  What was agreed by all save one, was that the law in this area should, or must, develop incrementally.  Indeed, given the perceived difficulties encountered in attempting to lay down principled control mechanisms that could broadly be applied, and also the impossibility of exhaustively defining the categories of cases where pure economic loss recovery should be available, it must be conceded that this is possibly the only logical way to proceed if the ambit for recovery of economic loss is to be broadened.  What can be hoped for is that in allowing the law to develop as so, established principles will emerge, in a similar vein to Hedley Byrne, and as perceived by McLachlin J., which will permit certainty of law to be maintained.  Given the untenable position in the United Kingdom, and the unsure situation in Ireland (which may contain dangers reminiscent of Anns), and also the fallacy of the exclusionary rule based on the floodgates and ‘bright line’ rule arguments, the position on recovery of economic loss subsequent upon a negligent act must be altered in these Isles if an equitable synthesis, such as was alluded to in the introduction, is to be achieved.  If a principled and transparent approach is not available, as is unfortunately suggested by the High Court of Australia in Perre v. Apand, then an incremental approach, as was also suggested, must be adopted if the situation as it stands is to be modified, allowing recovery in areas of economic loss where it is both safe and reasonable to do so.

The law relating to negligently inflicted psychiatric damage, or ‘nervous shock,’  has developed from a similar starting point as that of Cattle v. Stockton in economic loss.  It was held by the House of Lords, in 1861, that :

        “mental pain or anxiety the law cannot value, and does not pretend to redress, when

        the unlawful act complained of causes that alone”.

Fortunately, the law in this area has not been so slow to change and adapt itself to modern social expectations and professional and medical knowledge.  In Ireland, the courts were quick to discern that the distinction between mind and body, and injuries suffered therein, was not so wide or obvious as the decision in Lynch v. Knight maintained.  Two Irish decisions in the late nineteenth century, Byrne v. Southern and Western Ry. Co.and Bell v. G.N. Ry. Co., permitted recovery to ‘primary victims’ for psychiatric damage caused by reasonable fear of personal injury.  Although the English courts were not as swift to employ the same principle, as demonstrated by the refusal of recovery in Victorian Railways Commissioners v. Coultas, they gradually followed suit, for instance in Dulieu v. White & Sons.  It is now well established that psychiatric damage subsequent upon reasonable fear of personal injury, regardless of whether such injury materialises, is recoverable under law.  Indeed, once the fear of personal injury is reasonably foreseeable, it matters not whether the psychiatric injury itself is foreseeable.

The above principle, concerning so-called ‘primary victims,’ i.e. those who were foreseeable participants in the accident, is well established and gives little difficulty.  Where problems and uncertainties do arise is in the area governing so-called ‘secondary victims,’ i.e. those who were not foreseeable participants in the accident.  Courts have been much less willing to allow recovery in instances where the victim was not directly involved in the accident, such as aftermath cases and cases of fear of injury to another person other than the plaintiff, fearing once more the opening of floodgates, as well as the difficultly of proving that the injury exists and the possibility of fraud.  The case of McLoughlin v. O’Brian, in the wake of Anns, heralded a welcome new approach, moving away from the trend of refusal of recovery that the above fears encouraged.  The case concerned a mother suffering from psychiatric illness as a result of witnessing the aftermath of an accident in which one of her children died and her husband and two other children were injured.  In allowing her to recover, three of the Law Lords felt that the test of reasonable foresight of the psychiatric damage, easily demonstrated in this case, was sufficient to determine liability.  Two of the Lords, however, Lords Wilberforce and Edmund-Davies, felt this was not sufficient.  Lord Wilberforce felt that policy factors such as proximity of the relationship, proximity to the accident or its aftermath, and direct perception should be “inherent in any claim” as necessary limitations on the application of reasonable foreseeability.  The Irish courts, roughly a decade later, followed a similar line to the majority of McLoughlin, in the case of Mullally v. Bus Éireann.  In similar aftermath circumstances to McLoughlin, Denham J., then of the High Court, ruled that it comes “under the fundamental principles of the law of negligence to hold the defendants liable for reasonably foreseeable psychiatric illness caused by his negligence”.  Further, Denham J. admits to have been “guided more by Lord Bridge” (of the majority of McLoughlin) than by Lord Wilberforce in coming to her decision.

The issue of recovery for ‘secondary victims’ suffering from psychiatric injuries came to the fore again in England following the Hillsborough disaster in 1989, in the case of Alcock v. Chief Constable of South Yorkshire Police.  Decided as it was during the conservative trend initiated by Murphy, the liberal approach of Lord Bridge and the majority of McLoughlin did not find favour with the House of Lords of the day.  Instead, limiting factors, such as were enunciated by Lord Wilberforce in McLoughlin, were favoured, with emphasis upon the factors of time, space and relationship between the parties, as well as the mode of perception.  Thus recovery was denied, firstly, to those who were not spouses, parents or children of the primary victims because they failed to establish a close enough relationship; secondly, to those who had come upon the aftermath some hours later because they failed to establish spatial proximity; and thirdly, to those who had witnessed events on live television because it was felt not to be reasonably foreseeable that such images would be broadcast.  The Irish courts, too, have made not insignificant altercations in the law in this area following the case of Mullally v. Bus Éireann.  In Kelly v. Hennessy, yet again another aftermath case in similar circumstances to McLoughlin, the Supreme Court appears to have taken a slight step back from Mullally, in a similar, but not quite so dramatic, fashion as the House of Lords in Alcock.  Whereas Denham J. had advocated a test of reasonable foreseeability of the psychiatric injury in the High Court in Mullally, Hamilton C.J. thought it prudent to insist in Kelly, beyond the establishment of reasonable foreseeability, that the plaintiff at least be present at the immediate aftermath, and also that “the relationship between the plaintiff and the person injured must be close”.  Denham J., in her decision in Kelly¸ appears to have moved even further from her decision based on reasonable foreseeability in Mullally.  While apparently attempting not to “choose between either the general or the more restricted approach in common law,” as she did in favour of the former in Mullally, she then goes on to insist on the imposition of proximity factors, specifically proximity of relationship between persons, proximity in a spatial context, and proximity in a temporal sense, and then decides the case on the basis of these.

The decisions in Alcock and Kelly display a clear desire in both English and Irish jurisdictions to restrict and curtail the potential of recovery for ‘secondary victims’ suffering from psychiatric injury.  The prime reason can only be that ever present fear of opening the floodgates, which motivated Lord Wilberforce in McLoughlin, and perhaps as well the difficultly of proof and the possibility of fraud, as already noted.  Granted, the Irish approach in Kelly might not seem quite as restrictive as that of Alcock, especially given the verdict in the latter case, but it must be remembered that the Irish courts have never had to apply their approach to a catastrophe of such widespread proportions as the Hillsborough disaster, and it also seems very likely that the plaintiff in Kelly would still have succeeded under the approach taken by the House of Lords.  Having accepted that the courts are retreating somewhat from the decisions of McLoughlin and Mullally, in favour of a more cautious and exclusionary approach, it must therefore be inquired as to whether the concerns which precipitate it are justified, and, if so, whether the new approach provides an appropriate balance between such concerns and the obvious need to compensate deserving victims of negligence?  

The spectre of opening the floodgates and exposing defendants to innumerate claims of recovery, as well as overwhelming the judicial system, moved Lord Wilberforce (and Lord Edmund-Davies) to disagree with the majority of the Lords in McLoughlin and argue for extra factors and control mechanisms to be employed in order to prevent such a scenario developing.  Such sentiments encouraged the Law Lords in Alcock to choose the restrictive approach which they have now given to the rules governing recovery in the area at hand.  In light of its powerful effects, the validity of the floodgates argument therefore needs to be assessed.  One of most crucial points to be discovered, and bearing in mind the words of Lord Wilberforce himself that “fears of a flood of litigation may be exaggerated,” appears to be that the courts in these instances have made a basic and fundamental mistake, as indicated by current medical knowledge, concerning the actual susceptibility of the population in general to symptoms of psychiatric illness.  It is now widely accepted that lasting shock as a result of receiving a sudden fright is an extremely rare possibility, and at least two cases of the courts of first instance in England have recognised this.  In Hevican v. Ruane the trial judge noted that:

        “on the statistical and medical evidence before me, psychiatric illness resulting from

        nervous shock, whether received as a result of witnessing an accident involving a  

loved one or hearing about it, can be no more than the most remote of possibilities,”

and similar conclusions were reached in Ravenscroft v. Rederiaktiebolaget Transatlantic.  Yet the House of Lords in Alcock expressed “serious doubt [as to] whether Hevican v. Ruane and Ravenscroft v. Rederiaktiebolaget Transatlantic were correctly decided,” without challenging the medical evidence upon which these decisions were founded.  Further, if a person should happen to fall into the small category of those who are susceptible to psychiatric illness resulting from shock upon perceiving an accident, then whether or not such psychiatric illness will be activated will be primarily determined by the physical relationship between that person and the primary victim, as opposed to how, when and where such a shock is suffered.  What this suggests is that, within the already limited category of persons who may have the potential to suffer psychiatric damage as a result of witnessing an accident, that number will be further limited in any specific accident to persons who most likely have extremely strong relational links to primary victim or victims.  In considering the criticisms noted above, then, it appears the House of Lords, and also the Irish Supreme court to some extent, have both fundamentally misinterpreted and misrepresented the floodgates argument and the possibility of indeterminate liability in the area of psychiatric damage suffered as a result of witnessing an accident.

If the floodgates argument and the concerns that it provokes do not stand up to criticism and cannot be justified, then the second question posed, above, does not need to be answered.  That is, as to whether the new approach taken, in the event of these arguments and concerns proving legitimate, provides an appropriate balance between such concerns and the obvious need to compensate deserving victims of negligence?  The concerns are not legitimate and so the balance must, by default, be inappropriate; any approach that gives them undue credence cannot be equitable.  Where, then, does the correct and equitable balance lie, if not in Alcock and Kelly?  If it is conceded, in light of current medical knowledge, that the floodgates argument concerning limitless litigation is not sustainable due to the potential of only a small category of persons to suffer psychiatric illness, and also due to the fact that such psychiatric illness is primarily triggered only in those given persons with close proximal relationship to a primary victim, with little regard to factors of time and space, then the dangers that were feared from the reasonable forseeability tests of McLoughlin and Mullally subside greatly.  The fact that it is reasonably foreseeable that a person with a close physical bond to the primary victim or victims of an accident might suffer psychiatric injury if they witness the accident or its aftermath does not mean that they will suffer such injury.  In fact, medical evidence indicates that in most cases they will not.  This means that in allowing for a reasonable foreseeability test the floodgates will not be opened so widely as to cause grave concern.  It also means that proper recognition can be given to circumstances where such a close physical bond does exist between the primary and secondary victims, instead of allowing for nonsensical cut-off lines that deny recovery to such persons as fiancées, grandparents and even brothers who have suffered legitimate psychiatric illness due to witnessing an accident or its aftermath in which their loved ones were involved.  The law should be allowed to recognise that such persons have suffered psychiatric illness because of close physical bonds and that the possibility of such illness was reasonably foreseeable.  Finally, in the event that a person not closely physically connected with a primary victim should suffer psychiatric damage, then it can quite simply be argued that such an illness was not reasonably foreseeable, and any dangers of indeterminate liability in that respect are also disposed of.  In conclusion, the reasonable foreseeability test of McLaughlin and Mullally appears a most attractive option in that not only does it not contain the dangers of indeterminacy that it was thought to have, but it also allows safe a redress of the inherent injustices posed, and indeed delivered, by the Alcock-style approach at the same.

That the equitable synthesis aspired to in the introduction is a difficult objective to achieve has not been doubted by the discussion and analysis conducted above.   What has been most prominently displayed, however, is that if the law as it currently stands in relation to economic loss and negligently inflicted psychiatric injury is allowed to remain unchanged, then such a synthesis or balance will never be realised.  What will be attained, instead, is a protracted and indefinite continuation of two symptomatic examples of failure within law to redress pressing and deserving claims in achievable circumstances, by insisting on adhering to outmoded, irrelevant, hypocritical and misinterpreted excuses.  Thus the advocacy for change becomes necessary as well as desirable, even at the expense of provoking uncertainty, if the law is to move away from its current lopsidedness to a more central position of equity and even-handedness towards which it should aspire.

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Bibliography

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5.        Harris, J.W. ‘Murphy Makes it Eight – Overruling comes to Negligence’ (1991)

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