Extra-Contractual Obligations – Prof. Lara Khoury – Winter Semester Mini-Summary – by Martin Doe
General
· It’s often about the alternatives that could be taken to avoid the injury with regards to their burden or reasonability.
· We’re actually trying to deter risk of injury – not necessarily the actual injury
· The German Gesetzbuch is more civil – it lists everything. The Quebec CCQ tries to set out broad principles.
· Fairness to the defendant (CML) or the plaintiff (CVL) is a controlling principle.
· Value judgments and subjective common sense are hidden behind legal discourse.
· Shouldn’t ECO encourage people to also take care of their own safety when it attempts to deter risky behaviour? Where is this limit reached?
· Seriousness of fault should be determined by the risk it creates.
· Reasonable Foreseeability is odd in the sense that there is complete hindsight. This problem pervades ECO.
Acts and Omissions
Different political, moral, and social aspects involved – described in the UK case Stovin v. Wise and by Van Gerven.
FOR liability in omissions:
1. Mere omission vs. omission in action
2. Special relationship between the victim and defendant
3. Creation of risk to one’s own benefit – relates to extension of strict liability for others, things, and animals
4. Good faith – altruistic duties
5. Burden of prevention
AGAINST liability for omissions:
1. Individual liberty - affirmative action interferes with liberty
2. Fairness – why should the law pick one specific individual to prevent the harm?
3. Economic risk-bearing – activity which creates a risk should bear its own costs rather than someone who is creating no risk
4. Causal difficulty in cases of omission – direct cause of injury is between immediate wrongdoer and the victim (not the third parties who did not prevent the injury)
CML – more individualistic – reluctance in the CML to impose duties to act1. A duty to act will arise if there is reasonable foreseeability and a special relationship between the plaintiff and the defendant. (Crocker v. Sundance)
2. The court will look to several factors to determine if a special relationship exists:
· Precedence of established special relationships – e.g. employer-employee, parent-child, doctor-patient, occupier-visitor. (used precedence of Jordan and Crocker in Murphy v. Little Memphis)
· Control, authority, and supervision – e.g. teacher-student relationship.
· Creation of risk
o imminent danger?
o Placed in danger by defendant? (e.g. kicked out onto highway in Jordan House)
o arising within the context of the relationship? (e.g. put into fight in Murphy)
· Benefit to defendant – e.g. profit (Jordan House, Crocker, Murphy)
· Burden of prevention – seems Learned-Hand like (Murphy)
· originated within the tavern
CVL – less of a problem with imposing a duty to act
1. A duty to act will arise if there is reasonable foreseeability (by RP test). (Eaton v. Moore)
2. Also a. 2 of Quebec Charter: “Every person must come to the aid of anyone whose life is in peril, either personally or calling for aid, by giving him the necessary and immediate physical assistance, unless it involves danger to himself or a third person, or he has another valid reason.” (lots of internal limitations, though and rarely litigated)
But good faith obligations are expanding in both systems.
Rescuer’s liability has been limited by statute to gross negligence (CCQ 1471 or Act to Promote Good Citizenship).
Duty of Care
General idea: Loss lies where it falls unless there is a good reason to shift the loss to someone else.
· Cardozo: “A man is entitled to be as negligent as possible to the whole world if he owes no duty of care.”
· Weir: “You need not tell a stranger that he is about to walk off a cliff unless it is your cliff.”
1. Preliminary filter before actually being able to assess whether there can be liability
2. Mechanism of social control over liability – by deciding who we are liable towards, we decide if it is in the best interests of society to impose liability and/or who is best suited to care against that injury.
3. Policy questions – Only concept that allows the courts to step out of the juridical arena and discuss policy.
Problematic areas:
1. Failure to act (omissions)
2. Psychiatric injury
3. Secondary victims
4. Pure economic loss
5. Negligence of public authorities
CVLa. 1457 – general duty of care imposed on everybody – “another” means everybody, including:
· All types of injuries, including solatium doloris (Augustus v. Gosset) and pure economic loss (Elliott)
· Secondary victims (Regent Taxi, confirmed in Hopital Notre-Dame v. Laurent)
CML
Lord Atkin’s Neighbour Principle: (Donoghue v. Stevenson)
1. Reasonable Foreseeability – “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour”
2. Proximity – Persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question
Palsgraf pits the two principles against each other in an exclusive sense:
· Cardozo (CML foreseeability in duty of care): “Life will have to be made over, and human nature transformed, before prevision so extravagant can be accepted as the norm of conduct, the customary standard to which behavior must conform.” “Negligence, like risk, is thus a term of relation. Negligence in the abstract, apart from things related, is surely not a tort, if indeed it is understandable at all.”
· Andrews (CVL proximity in causation): “If his act has a tendency to harm some one, it harms him a mile away as surely as it does those on the scene.” “Every one owes to the world at large a duty of refraining from those acts that may unreasonably threaten the safety of others. Such an act occurs. Not only is he wronged to whom harm might reasonably be expected to result, but he also who is in fact injured, even if he be outside what would generally be thought the danger zone.”
Evolution of duty of care (CML)Always look at precedent first! – property damage or bodily injury are never a problem
Donoghue (UK) à Dorset Yacht (UK) à Anns (UK) + Kamloops (SCC) à Murphy + Caparo (UK) à Cooper (SCC)
(1) Donoghue v. Stevenson [1932]
“Neighbour principle” = I owe a duty of care to those who I can reasonably foresee will be injured by my actions
(2) Dorset Yacht [1970]
The court will attempt limit the scope of any new duty of care and consider policy questions before extending a new duty of care.
(3) Anns v. Merton [1977] – affirmed in Canada by Kamloops v. Nielsen (1984)
Two-stage test in Anns:
1. Proximity – shown through reasonable foreseeability – prima facie duty of care
2. Policy (e.g. floodgates argument)
(4) Murphy v. Brentwood District Council + Caparo (1990) (UK only)
Three-stage test in Murphy: (separates reasonable foreseeability and proximity)
1. Reasonable foreseeability
2. Proximity (but, unclear what “proximity” means – work on a case-by-case basis since there is no fixed definition) à proximity will be more than reasonable foreseeability (more restrictive than Anns test)
3. Is it just and reasonable to impose a duty of care?
(5) Cooper v. Hobart (2001)
Reformulation of the two-stage test (from Anns):
1. Proximity:
a. Reasonable foreseeability
b. Policy considerations that deal with the relationship between the parties
2. Policy – all other policy considerations (e.g. floodgates)
à Some have argued that Cooper represents a movement towards the English adoption of Murphy (i.e. the idea is that the policy aspect of proximity represents a separate proximity step as in Murphy – bolstered by McLachlin in Norsk)
Secondary Victims
Secondary victims = victims who suffer loss consequent to the physical (including death), psychological, or material injury of the primary victim (i.e. no direct injury from the wrongdoer)
Potential categories of secondary victims:
· Spouses/dependents/children/siblings
· Friends
· Employers
· Witnesses (bystanders) or indirect (e.g. TV) viewers
· Creditors
CVL – no problem (Regent Taxi and Hopital Notre-Dame)CML
If the secondary victim suffers damages as a result of the death of the primary victim, this is generally regulated by Fatal Accident legislation (regardless of nature of injury).
Pecuniary loss – usually does not pose a problem as long as causation can be proven
Non-pecuniary/psychological damages
Traditionally, the CML is reluctant to compensate for non-pecuniary loss unless linked to material or bodily injury (in which case a secondary victim would become primary). This general reluctance is linked to (1) fear of floodgates, (2) judicial skepticism of claims, (3) general reluctance to compensate non-pecuniary loss or secondary victims.
This is now slightly expanded according to the following conditions: (Alcock)
1. Injury must be “positive psychiatric injury” and not solatium doloris
2. Psychiatric injury must be foreseeable to person of “normal fortitude” (also in obiter in Page v. Smith)
3. Must have sufficient relationship of love and affection with the direct victim. (1) Spouse, (2) parent, and (3) child of victim raise a (rebuttable) presumption of such a relationship. (Lord Ackner in Alcock)
· Alcock leaves the door open to something so horrific that a mere bystander could sue.
4. The secondary victim must have witnessed the accident or its immediate aftermath (the latter is vague 2-9 hrs).
5. The secondary victim must have seen or heard the accident directly – not through 3rd party or crowd on TV.
6. The accident must cause a sudden assault on the nervous system – must be traumatic.
Pure Economic Loss
Pure economic loss = pecuniary loss that is not consequential on a physical or material injury
Both systems are concerned with not extending liability too far (floodgates concern), but as always CML deals with it through duty of care and CVL through causation.
CVL – no problem – another can include secondary victims suffering PEL (Elliott) but it must be a direct and immediate consequence of the fault (JE Construction)CML
“Bright line rule” – default position is no recovery because only direct economic loss is reasonably foreseeable (Weller)
Reason for reluctance:
1. Floodgates (main) – fear of liability for (1) an indeterminate amount; (2) an indeterminate time; and (3) an indeterminate class of people (Cardozo J in Ultramares v. Touche)
2. Plaintiff is the best loss bearer – is in a better position to foresee the damage, calculate potential loss, get first-party insurance
3. Dealt with through contractual relations with the immediate victim – the parties can include a clause to provide for compensation for PEL (LaForest in CNR v. Norsk Pacific Steamship)
4. Strict division between contract and tort law (less and less true) – PEL belongs in contract law
5. Economic interests are seen as less valuable than personal or proprietary interests
But there have been some openings:
1. Negligent Misstatement – quasi-contractual liability due to foreseeable reliance and inducement (strict in Hedley Byrne, broadened in VK Mason)
2. Relational Economic Loss – Plaintiff suffers economic loss consequent on a relation with the direct victim
· Personal injury – usually regulated by statute (e.g. Fatal Accidents) and limited to spouse or dependents.
· Material damage – depends on contractual nature and proximity of the relationship (by Anns test)
· Must be contractual relationship. (Norsk)
· Physical propinquity, assumed or imposed obligations, and causal connections are relevant to evaluating the relationship (McLachlin in Norsk)
· Joint ventures are recognized as relationships within this duty of care. (Norsk, Bow Valley)
· However, restraint should be used and duty of care should not be found easily. (Bow Valley)
Causation
Factual vs. Legal Causation – selecting from amongst those factors which are the legally effective causes.
The real issue is one of policy and common sense – fairness to defendant or to plaintiff – do we think that the defendant should be liable for the consequences of his act and to what extent? However, the policy discussion and value judgments are hidden behind the legal discourse.
Different arguments can be raised to limit legal causation to totally or partially:
1. The loss is indirect
2. The loss was not reasonably foreseeable
3. There are other wrongdoers
4. There are other non-faulty causes
5. After the fault, other subsequent events arose which could have contributed to the damage
6. The plaintiff is at fault
Theoretical approaches to causation (not that useful in practice)Causa sine qua non – equivalence of conditions (CVL) // but-for test (CML)
· Retain all the causes without which the damage would not have occurred – “would the injury have occurred but for a certain element?” (involves imagining hypothetical situations that do not involve the factor in question)
Reasonable foreseeability test (primary test in CML)
· Was the kind of injury that was caused reasonable foreseeable from the person’s action
Adequate causation theory (primary test in CVL)
· selective process – “which of these factors in the normal state of affairs is of a nature to cause the damage?” (normal state of affairs is based on past experience) – more restrictive than the causa sine qua non test
Causa proxima (not used in either system) – last event that happened just before the injury occurred
“Thin skull rule” or Predisposition (both CML and CVL)
Pre-existing conditions that exacerbate or increase the chance or injury are irrelevant – you “take your victim as you find them” – only the type of injury needs to be foreseeable (Smith v. Leech Brain, Marconato v. Franklin)
CVL – mainly directness and adequate causation
a. 1607 – “immediate and direct consequence of the debtor’s default” à implies directness
The civil law uses directness, but it is unclear whether reasonable foreseeability should help determine this (YES – Pratte majority in Brisson, Kaufman in Joly v. Ferme Re-Mi, Baudouin in Caneric; NO – St-Germain dissent in Brisson, Gagnon in Joly v. Ferme Re-Mi)
There is also the idea of “cause generatrice” that will limit liability if there is active intervention on the part of the plaintiff. (Morrisette v. T. McQuat)
CML – mainly reasonable foreseeability
Early on, directness was used in the CML. (In re Polemis) But this is replaced by reasonable foreseeability due to the fear that defendants will be penalized excessively for injuries disproportionate to the fault. (Wagon Mound I)
Reasonable foreseeability only needs to be with respect to the kind of damage (even if the manner in which it occurred was unforeseeable). (Hughes v. Lord Advocate)
· It now depends on how specifically the kind of injury is defined (Narrow – Tremain v. Pike; Broad – Leech Brain)
Multiple Causes