Date:
Thu, 20 Nov 2003 11:58:40 -0500
From: Jason Neyers
Subject: ODG: Interesting cases
Dear
Colleagues,
I
have read with great interest the new HL cases posted on the list
today. For what it is worth, I think that the Transco plc v. Stockport
Metropolitan Borough Council case is rather disappointing for
a number of reasons:
1)
As is to be expected, I find Lord Hoffmann's reliance on insurance
in determining "non-natural user" unhelpful and rather
silly. Rather than being a tangential flight of fancy, as Harold
intimates, it seems to be at the heart of Hoffmann's decision:
see para [46] & [49].
"[46]
A useful guide in deciding whether the risk has been created by
a "non-natural" user of land is therefore to ask whether
the damage which eventuated was something against which the occupier
could reasonably be expected to have insured himself. Property
insurance is relatively cheap and accessible; in my opinion people
should be encouraged to insure their own property rather than
seek to transfer the risk to others by means of litigation, with
the heavy transactional costs which that involves. The present
substantial litigation over £100,000 should be a warning
to anyone seeking to rely on an esoteric cause of action to shift
a commonplace insured risk."
"[49]
In my opinion the Court of Appeal was right to say that it was
not a "non-natural" user of land. I am influenced by
two matters. First, there is no evidence that it created a greater
risk than is normally associated with domestic or commercial plumbing
... Secondly, I think that the risk of damage to property caused
by leaking water is one against which most people can and do commonly
insure. This is, as I have said, particularly true of Transco,
which can be expected to have insured against any form of damage
to its pipe."
2)
Lord Hoffmann's assertion that it is not consistent "with
the judicial function of your Lordships' House to abolish the
rule ... It has been part of English law for nearly 150 years".
How can it be beyond the judicial function to abolish a rule that
is in conflict with other more highly developed areas of law,
i.e. one that is wrong as a matter of simple justice? That, at
least to me, is the heart of the judicial function. Two of their
Lordships in Shogun Finance Limited thought it was part of the
judicial function to overrule Cundy v Lindsay (1878) 3 App Cas
459 how is it not here?
3)
Lord Hobhouse's whole speech, which makes no sense to me whatsoever.
He starts out by saying that their is a logical reason for the
rule in para. 57: "He who creates the relevant risk and has,
to the exclusion of the other, the control of how he uses his
land, should bear the risk. It would be unjust to deny the other
a risk based remedy and introduce a requirement of proving fault."
Yet then goes about showing all the cases which contradict this
rationale, or which implicitly support fault reasoning, to be
rightly decided. How is that possible?
4)
The implicit assertion by a number of their Lordships that nuisance
is a strict liability tort on the basis that "it is no defence
that the defendant has used all reasonable care to minimise the
annoyance" (para 97). This does not make it a strict liability
tort, all that it means is that reasonable care may require one
from refraining from engaging in an activity in that particular
location since it still creates an unreasonable interference with
the rights of others. But this is no different than an orthodox,
non-policy, understanding of negligence, see Bolton v. Stone "If
cricket cannot be played without creating a substantial risk,
then it should not be played at all".
5)
The implicit assertion by a number of their Lordships that when
considering whether or not to overrule a legal rule we should
ask yourselves whether it "imposes liability in cases where
it would not otherwise exist", i.e. allows for more compensation
(para. 98). How is that possibly relevant? If it is relevant,
why is it only relevant when jettisoning a rule as opposed to
creating new ones? Moreover, if this is the test then every existing
rule that limited compensation should be jettisoned, should it
not? Bye, Bye negligence : (
One glimmer of hope in an otherwise unrewarding judgment was LORD
WALKER OF GESTINGTHORPE's rejection of any role for the general
benefit of the community in answering Rylands questions. As he
argued in para. 105:
Where
Lord Moulton's formulation becomes questionable is, as Lord Goff
pointed out in Cambridge Water (at p 308) his reference to land
use "for the general benefit of the community". It is
understandable that any court might be inclined to deal more strictly
with a defendant who has profited from a dangerous activity conducted
on his own land, and less strictly with persons conducting similar
activities for the general public good. But in this area (which
is some way removed from the "give and take" of minor
nuisances) the court cannot sensibly determine what is an ordinary
or special (that is, specially dangerous) use of land by undertaking
some utilitarian balancing of general good against individual
risk. The court must beware of what David Campbell has called
"unsustainably ambitious claims to be able to identify the
social welfare function" (see Of Coase & Corn: A (Sort
of) Defence of Private Nuisance (2000) 63 MLR 197, 204). That
inclination is apparent in the judgment of the Court of Appeal
in Dunne v North Western Gas Board [1964] 2 QB 806. The temptation
to make a utilitarian judgment even led Viscount Simon and Lord
Macmillan in Read v J Lyons & Co Ltd (at pp 169-70 and p 174)
to contemplate that in wartime the manufacture of explosive munitions
might be regarded as an ordinary use of land. Regardless of any
national emergency that sort of activity is (in Lord Goff's words
in Cambridge Water at p 309) "an almost classic case of non-natural
use".
How
this squares, however, with his support of Lord Hoffman's speech
which espouses utilitarianism is another question altogether.
