Date: Sat, 20 Oct 2007 08:20

From: Robert Stevens

Subject: Johnston v NEI

I would suggest that this obligation, i.e. to "protect their staff from attacks by third parties" derives from the relationship between the parties and not the contract per se. If, for example, a volunteer worked at a charity shop gratis (i.e. there is no contractual relationship because the "worker" is literally a "volunteer") and as a result of the "employer's" negligence is subject to an assault, I have no doubt that there would be a duty of care owed in negligence. I would be amazed if any court in any jurisdiction considered that a different result should apply because in one case there was a contract of employment and in my example there was none. This duty may well be said to derive from the employer's "voluntary assumption of responsibility" but it can hardly derive from the non-existent contract. Thus, the contract of employment may well provide the context for the substance of the obligation, but it is not, per se, the source of the obligation.

Let us assume, for the sake of argument, that there is no contract in your example. I agree that the 'voluntary assumption of responsibility' is the key to why there are positive, non-delegable, duties owed by the employer which are not owed by persons generally. In your example this is because of the undertaking made by the employer.

In the context of a contract of employment this undertaking is embodied in the contract. There are not two sets of promises made by an employer, one set embodied in the contract and another set outside it. There is just one set of promissory obligations.

So whilst I completely agree that a contract is unnecessary, I deny that this shows that the duties undertaken are not contractual where the relationship is contractual.

It is just like Hedley Byrne v Heller. If consideration had been provided by the advertising agency there would have been a contract between them and the bank. There would not then be room for another non-contractual assumption of responsibility. There is just one assumption of responsibility. There would not be a contractual promise and a tortious promise. There is just a promise.

Nor do I attribute to you the argument that "the only rights that employees have against employers are those found in their contract, as Michael seems to think I am". Since I assume that the employer-employee relationship involves obligations in contract, tort and equity (for example, obligations of confidentiality - which, no doubt, someone will now tell me is an implied obligation in the contract, and not an equitable obligation at all) I would not attribute to someone else a much narrower view of that complex relationship.

Bottom line, is that I agree with Ken's statement that: "If you're asserting that the implied contract obligation is more onerous than the tort obligation, then it's reasonable to ask why you think so. Note that I didn't ask for a ‘novel’ theory. Any theory will do. But I am interested in why you think what you say is something more than bare, unsupported assertion". At the end of the day, litigation has to be about practical remedies (you can theorise about this "until the cows come home"). If the claimants have no substantive remedy in tort in Johnston the claim that they have a right to nominal damages for breach of contract is about as useful as the proverbial chocolate fireguard.

Well I think I have discussed several reasons why the employee may wish to assert a claim based upon contract rather than rely upon a tort.

(i) In Johnston itself it gives them a cause of action. Without it they have none. The question then becomes whether the loss they undoubtedly suffered was too remote. I therefore agree with Lord Scott at paragraph 74 of Johnston that a claim for breach of contract has some prospect of success whilst a claim in tort had none. Only asserting a claim in tort was a mistake by counsel, as Lord Scott implies.

(ii) You can get a specific remedy by relying upon the right to a safe place of work contained in the contract. Liability for negligence compensates for harm suffered only.

(iii) If the employee suffers consequential economic loss as a result of the breach (e.g. diagnosis costs) this should be recoverable for breach of contract. There is no tort claim.

(iv) The contract explains why the employer has duties which are both positive to protect the employee and why they are non-delegable. I agree that it is possible to make non-contractual undertakings to others to the same effect, but here they are contractual.

(see Adam's comment re: abuse of process and costs).

It might be interesting to see what the House of Lord’s reaction would be to a Johnston claim based in contract. I recollect some suggestion in the House of Lords in the case of McFarlane v Tayside Health Board that a suitably worded contract might have produced a different result in that case (which was that parents who had given birth to a healthy child could not recover in the tort of negligence for the economic cost of raising a healthy child where a doctor had performed a sterilisation operation negligently or given negligent advice about sterilisation). This was soon followed by obiter comments at first instance (in Richardson v LRC Products Ltd) that there could be no claim against the manufacturer of an allegedly defective condom for the cost of raising a healthy child, even though there was a clear contract, and one of the obvious consequences of a defective condom is the conception and birth of healthy child. I mention this simply as an example of how the courts tend to make implied contractual terms march to the beat of the tort drum.

But if you read McFarlane and Rees the core idea underpinning the decisions is that children are not simply a loss. The incommensurable gain of the child offsets the economic costs and individual parents are not able to prove that the same is not true for them. Now, regardless of whether you accept that reasoning it is applicable whether the claim for loss is based upon a tort or a breach of contract. So we can explain as a matter of legal doctrine why the result is the same regardless of whether there is a contract.

However, demonstrating that it makes no difference in some cases whether the claim is brought for breach of contract or upon a tort does not demonstrate that it makes no difference in any case.

Robert

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