Given the difficulties in understanding and applying the tests for establishing novel duties of care in Caparo v Dickman, would it be better to return to the test set out in Anns?

by tsangjw1 (student)

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This paper seeks to examine whether a retreat to the test set out in Anns v Merton London Borough Council is desirable, given the complexities of the tests established by Caparo Industries plc v Dickman. To qualify a return to the Anns’ approach, this paper has set out two requirements: departure from the Caparo’s tests must be necessary, and the Ann’s two-stage test must be able to remedy the obscurities created by the Caparo’s approach. Points of discussion include the survival of the Caparo’s approach, the feasibility and practicality of the two-stage test as a substitute, and the formulation of new alternatives. This paper will then go on to conclude that it is unfeasible to revert to the test established in Anns.

In assessing whether the two-stage test should be readopted, the first threshold is the survival of the current test for duty of care. To establish a novel duty of care under first part of the Caparo test, the damage suffered by the claimant must be reasonably foreseeable; there must be a relationship of proximity between the claimant and the defendant; and it must be ‘fair, just and reasonable’ for the court to impose a duty of care. Although it seems to be a methodical approach in finding novel duties, the notions of foreseeability, proximity and fairness are very vague and abstract concepts which are incapable of giving explicit guidance to judges as to how these requirements can be satisfied. For instance, it does not tell the courts what facts need to be established for a given legal claim to arise. Lord Roskill referred the three requirements in Caparo as ‘labels or phrases descriptive of the very different factual situations which can exist in particular cases’. Due to the fact that the three stages are not capable of any precise definition, it is almost impossible for the courts to apply the test in ways which seem impartial to the public and critics. The courts cannot declare that the test has been applied rightly by referring to any guidelines because there is none and it becomes easy to attribute courts’ decisions to any factors. For example, some critics claimed that ‘the concept of proximity “masks” the real policy-based reasons for arriving at particular duty determinations’. As the second part of the Caparo’s test, the incremental and by analogy approach imposes a redundant constraint on the courts and signifies a return to pre-Donoghue position. This is retrogressive, tantamount to an impediment to the development of law. However, despite there are much difficulties in using the Caparo’s tests, Lord Mance in Customs & Excise Commissioners v Barclays Bank plc recognised that the approach has provided ‘a convenient general framework although it operates at so high a level of abstraction’. Also, cases decided based on the three-stage test suggest what is ‘fair, just and reasonable’ to the courts, but these merits of the approach are trivial. In short, the difficulties in applying Caparo’s tests have indicated that a departure from the current approach is necessary. This is consistent with the attitude of the House of Lords (Supreme Court) in the Nicholas H’s case when the three-stage test was explicitly ignored.

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The second hurdle for a return to the test set out in Anns is the practicality of the two-stage test as a substitute to the Caparo’s approach. To justify a retreat from Caparo to Anns, it must be satisfied that the difficulties encountered by courts in Caparo’s tests would be resolved by the two-stage test. Most of the difficulties in applying the current test originate from the indeterminacy of the three-stage test requirements, thus it is important to assess whether the two-stage test is adequately precise to be understood and applied by courts. In order to establish a duty of care under the two-stage test, the courts must consider whether the damage is reasonably foreseeable to the defendant and whether there is any policy consideration which will negate a duty of care. This test may make problems appear simpler because there are only two stages involved. However, the controversial part of the two-stage test lies with the second fold, which spells out a role for policy factors. Policy consideration gives too much discretion for judges; it ‘encompass[es] every reason imaginable for denying liability’ and the fact that courts can take into account government policies in establishing novel duties of care is detrimental to the independence of the judiciary. This could easily give rise to a situation where the imposition of duty of care becomes discretionary, the very consequence that the courts want to avoid. The two-stage test does not provide the precision that the Caparo’s approach lacks as there is still no clear and unequivocal guidance as to how a duty of care can be deduced. Besides, the only basis for establishing novel duties of care is reasonable foreseeability of damage and this has been perceived by Lord Keith as giving too much weight to foreseeability as the determinative criterion. Another inherent feature of the two-stage test is the perceived illegitimacy resulting from the role of policy consideration in establishing duty of care, and a return to the Anns’ approach means courts’ decisions may seem illegitimate again. Therefore, the two-stage test is unfeasible as a substitute to the Caparo’s approach.

Since it has been established that a departure from the current approach set out in Caparo is necessary and that the two-stage test is impractical and ineffective as a substitute to the Caparo tests, the better option is to move forward with a new alternative. In the Nicholas H, Lord Steyn found a new way to determine duty of care by weighing the various factors which support the imposition of a duty of care against those which point against the finding of a duty of care. Stapleton argues the same idea of weighing factors both for and against the recognition of a duty in her article. This approach is more precise than Caparo and Anns as the finding of novel duties of care is based on identifiable factors instead of abstract notions such as proximity and fairness. However, the weighing of factors remains a subjective task and this will vary from case to case. Nevertheless, the determination of duty of care on a case-by-case basis is inevitable nowadays especially when it is increasingly clear that the formulation of a single ‘directive formula’ is not possible because of the various fact situations and a variety of reasons for courts to consider. The inapplicability of the Caparo’s tests in the Nicholas H allows the inference that there are likely to be more departures from Caparo in future cases which involve establishing novel duties of care. As a corollary of this, the formulation of a new approach by the judiciary is unavoidable.

Concluding from the facts that the Caparo’s tests are largely without substance and the two-stage test set out by Anns not only fails to function as an alternative to Caparo’s tests but also creates more problems of its own, the retreat to Anns is not an option to be considered and a new approach for establishing novel duties of care is needed. However, if the formulation of a new test is necessary, it is dubious as to how it should be done. The formulation may take place in courts, through judicial decision-making, or even in the Parliament, an Act of Parliament would put all debates in halt.

Caparo Industries plc v Dickman [1990] 2 W.L.R. 358, [1990] 2 A.C. 605.

ibid.

Christian Witting, ‘Duty of Care: An Analytical Approach’ (2005) 25 OJLS 33

[2006] 4 All ER 256, [2006] UKHL 28

Nicholas J. McBride and Roderick Bagshaw, Tort Law (3rd edn, Longman 2008)

Marc Rich & Co. A.G. v Bishop Rock Marine Ltd [1995] 3 W.L.R. 227, [1996] A.C. 211.

Michael A. Jones, Textbook on Torts (8th edn, OUP 2002)

Robert Stevens, Torts and Rights (OUP 2007)

Yuen Kun Yeu v Attorney-General for Hong Kong [1987] 2 All ER 705

Marc Rich & Co. A.G. v Bishop Rock Marine Ltd [1995] 3 W.L.R. 227, [1996] A.C. 211.

Stapleton, ‘Duty of Care Factors: A Selection from Judicial Menus’ in Cane and Stapleton (eds), The Law of Obligations – Essays in Celebration of John Fleming (OUP,1998)

ibid.