Accidents – Duty of care – Economic loss

(1) Geoffrey Glaister (2) Geraldine Glaister (3) Natalie Glaister v Appleby-in-Westmorland Town Council: CA (Civ Div) (Lord Neuberger of Abbotsbury MR, Lords Justice Jacob, Toulson): 9 December 2009

The appellant local authority appealed against a decision that it had negligently failed to take proper care to see that public liability insurance was arranged which would have covered the circumstances of an accident in which the first respondent sustained an injury. The first respondent had visited a horse fair with the second and third respondents, where he was kicked in the head by an untethered horse, causing him serious injury. The case of the respondents (R) was that they suffered economic loss as a result of the absence of the insurance policy which the local authority could have taken steps to ensure was in place. The recorder found that there was no one body that had exclusive control over the fair, but noted the new fair committee, comprising public bodies including the local authority, which sort to exert some control over it. The recorder held that it was fair, just and reasonable to impose a duty of care on the local authority to see that the insurance was put in place because, among other things, the local authority was the body on whose land the primary site of the fair lay, it took the leading role in the new fair committee, and it was aware of the risks to safety. The recorder held that the absence of the insurance had caused R to lose the remedy of suing a defendant who was appropriately insured. The local authority submitted: (1) it was not under a duty of care to ensure the placement of the kind of public liability insurance which would have been available, and even if there was such a duty the recorder was wrong to find that its failure to carry out the duty caused any loss to the respondents; (2) the judge had failed to identify which of the ‘insured bodies’ would have been legally liable to R and how.

Held: (1) The fact that the claim in question was a novel one was not fatal because the categories of negligence were never closed, Sutherland Shire Council v Heyman [1955-95] PNLR 238 HC (Aus), Gwilliam v West Hertfordshire Hospitals NHS Trust [2002] EWCA Civ 1041, [2003] QB 443 and Payling v Naylor (t/a Mainstreet) [2004] EWCA Civ 560, [2004] PIQR P36 considered. For a duty of care to arise there needed to be something particular about the relationship between the defendant and the claimant, in relation to some particular transaction or activity likely to have economic consequences for the claimant, such that the claimant could properly expect to be entitled to rely on the defendant to safeguard him from economic harm likely to result from want of care on the part of the defendant. That need was reflected by the usage of the words ‘special duty’ or ‘special relationship’, Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 HL and Caparo Industries Plc v Dickman [1990] 2 AC 605 HL followed. There was no such relationship in the present case between the local authority and the members of the public, including R, who visited the fair. Also it was not clear what claim the recorder had in mind. If he had in mind a claim against the owner of the horse, R were unable to pursue such a claim because the owner was not identified; but that of itself had nothing to do with the non-existence of a public liability policy insuring the organisers of the fair. If the recorder had in mind a claim against an authority that had some responsibility for the activity which led to the first respondent’s accident, that claim was open to be pursued. In either case, there was no sound basis for saying that public policy militated in favour of the duty of care which the recorder found was owed by the local authority.

In the circumstances, the local authority owed R no duty of care to ensure the placement of public liability insurance and even if such duty existed, but no wider duty of care for R’s safety, any breach of the duty did not cause loss falling within the scope of the duty. Furthermore, to hold the local authority responsible for the consequences of the first respondent’s accident would amount to making the local authority responsible for the negligent act or omission of a third person for whom it had no direct legal responsibility.

(2) R’s pleadings contained no specific allegation of negligence on the part of any body responsible for any part of the organisation of the fair other than the local authority. Although the recorder said that if appropriate insurance had been in place there would still have been a negligent failure by the bodies concerned to see that proper segregation of visitors and horses was taking place, he did not specify any particular body which would have been legally liable to R if it had been sued; and he neither found nor could have found that any such body would have been unable to satisfy any judgment obtained by R. Accordingly, the recorder’s conclusion that R suffered any loss from the absence of an appropriate public liability policy was unsustainable.

Appeal allowed.

Michael Kent QC, Steven Snowden (instructed by Crutes) for the appellant; Philip Havers QC, Paul Kirtley (instructed by Donelly McArdle Adamson) for the respondents.