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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Glaister & Ors v Appelby-In-Westmorland Town Council [2009] EWCA Civ 1325 (09 December 2009) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2009/1325.html Cite as: [2009] EWCA Civ 1325, [2010] PIQR P6, [2009] NPC 143

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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MIDDLESBROUGH COUNTY COURT
Mr Recorder Storey QC
7DL01684

		Royal Courts of Justice Strand, London, WC2A 2LL
		09/12/2009

Lord Justice Toulson :

1. On 5 June 2004 Mr Geoffrey Glaister, the first claimant, suffered a serious accident at the Appleby Horse Fair. He had gone to the fair with his wife and daughter, the second and third claimants. They were standing on a grass verge on Long Marton Road, close to where horses were tethered, and were watching horses and carriages being raced, when Mr Glaister heard a commotion behind him. He turned to see what was happening. He saw an un-tethered horse close to him. The horse must have broken loose because its tethering lead was hanging loose. No one knows who the horse belonged to, where it came from or how it had broken free. Someone called to Mr Glaister to take hold of the tether. He was concerned for his family's safety and about what might happen if the horse strayed into the racing line, and so he tried to take hold of its lead. As he bent down to do so, the horse turned and kicked him in the head, causing him serious injury. The accident has left him with permanent disabilities and greatly reduced earning power. At the time of the accident he was aged 44.
2. Mr Glaister sued the Appleby-in-Westmorland Town Council ("the Town Council") and so did his wife and daughter. Their claim was in respect of psychological injuries allegedly brought on by the shock of the accident.
3. It was originally alleged on his behalf that the accident was caused by negligence on the part of the Town Council, in particular, in allowing horses to be tethered in close vicinity to other horses racing along the highway and failing to ensure that the tethered horses were properly supervised, but that part of the claim was abandoned. The action proceeded on an alternative claim that the Town Council negligently failed to take proper care to see that public liability insurance was arranged which would have covered the circumstances of the accident. The matter went to trial on that allegation. It was heard by Mr Recorder Christopher Storey QC in the Middlesbrough County Court on 3 and 4 July 2008 and 21 January 2009. Judgment was reserved and was delivered on 2 March 2009. The recorder found for the claimants on the issue of liability and gave judgment for damages to be assessed. The Town Council appeals against his judgment.

The facts

4. Appleby-in-Westmorland is a small town in Cumbria with a population of about 2500. The Appleby Horse Fair is an event which has been held for several centuries and probably since the middle ages.
5. The fair takes place each June. It lasts for a week. Historically it was an event for trading horses and livestock. The activities today include horse showing and selling horses, informal horse racing and "sulky" racing. A sulky is a form of carriage. There are also trade exhibitors. The event attracts several thousand travellers together with their horses and caravans. For many years a large number of the travellers have been accommodated on Fair Hill, which is owned by the Town Council, but the activities of the fair extend to other land in private ownership and to parts of the highway. In about 2003 a "flashing lane" for racing was built adjacent to Long Marton Road (but not used), and for many years it has been the custom of the highway authority to obtain a temporary road closure order covering Long Marton Road for the duration of the fair. The highway authority for Long Marton Road was Cumbria County Council and it duly obtained a road closure order for the 2004 fair.
6. For years the event has brought to Appleby large numbers of visitors and tourists who like to observe the gypsy caravans, buy from stalls, visit the markets which are set out and watch the horses. The peak daily attendance at weekends is around 45,000. Many visitors stand on the verge of Long Marton Road to watch the "flashing" of the horses, as Mr Glaister and his family were doing when he suffered his accident.
7. The recorder found that there was no one body which had exclusive control over the fair, but that over the last 40 years various attempts had been made by combinations of public bodies to exert some control over it. There was a committee called the Appleby Fair Joint Committee ("the Fair Committee") and another committee called the Appleby New Fair Joint Committee ("the New Fair Committee"). The Fair Committee was composed of representatives of the Town Council and the travellers. The recorder said that this committee existed largely to be the recipient of an informal grant of a licence to use Fair Hill for the duration of the fair and to administer matters arising from the grant. It controlled the activities on Fair Hill.
8. The New Fair Committee comprised representatives of the Town Council, Eden District Council, Cumbria County Council, Cumbria Police, Cumbria Fire Service, DEFRA, the RSPCA, Appleby Chamber of Trade and the travellers. It had no formal constitution. Its chairman was Mr Alan Morgan, who was a member of both the Town Council and Eden District Council. It held meetings at about 6 month intervals before and after each year's fair. The recorder found that the New Fair Committee itself had no duties or powers to direct operations relating to the conduct of the fair, but its various constituent members had different statutory powers and duties which bore on different aspects of the fair, such as environmental issues, highway safety and fire precautions. He found that the Town Council "was the leading body in the Fair's organisation at the time of this accident"; but, having observed that the constituent members of the New Joint Committee had different powers and responsibilities, he did not attempt to define the particular powers or responsibilities of the Town Council. Perhaps this was unnecessary, since no allegation was being made that the Town Council was to blame for the accident.
9. The minutes of the New Fair Committee showed that the committee discussed various health and safety issues. The recorder noted in his judgment that Mr Morgan, who was called as a witness by the Town Council, agreed in cross-examination that in 2003 it was appreciated that the "primary connection of the fair was with Fair Hill, but the fair activities spread well beyond Fair Hill" and that "there were serious safety concerns with serious injuries having incurred". He was questioned about a minute of Eden District Council in 2003, which referred to the fair being urgently in need of management control and the possibility of income being used for a variety of purposes including "insuring the event". The recorder said that he regarded as particularly significant an answer given by Mr Morgan that "we were considering insurance to cover all ills arising from the event as a whole, but the problems were getting the cover and finding an insurer".
10. The Town Council encouraged visitors to the fair by promoting it on its website.
11. The claimants called evidence from an insurance broker who said that it would have been possible to have arranged joint insurance cover for the various councils and authorities involved in the organisation of the fair in respect of their public liability risks, i.e. risks of liability for injury or damage caused by their negligence, but such cover would not have extended to the liabilities of individual participants at the fair, such as trade exhibitors.

The defined issue

12. The pleaded case was that the Town Council owed a duty to visitors to the fair to ensure, as a condition or prerequisite of permitting travellers and gypsy horse dealers to use Fair Hill as a caravan site and tethering ground for horses for sale, that "there existed Public Liability insurance against the risk of injury to members of the public attending the Fair". The pleading did not specify who were to be the insured parties. Before the trial counsel for the parties agreed that the crucial issue could be defined as follows:

"Was D under a duty of care to ensure that appropriate public liability insurance in respect of negligent acts or omissions by participants in the Fair was in place?"

13. The agreed minute also recorded that the claimants contended that the Town Council should have done so by way of a condition of the licence for the use of Fair Hill and not that there was a duty on the part of the Town Council itself to obtain or effect such insurance.
14. The agreed definition of the issue left unclear what precisely was meant by the expression "participants in the Fair", i.e. whether it included those who had come to show, race or sell horses or whether it was limited to bodies which had some responsibility for organising aspects of the fair.

The judgment

15. The recorder held that the Town Council owed visitors to the fair a duty to take reasonable steps to ensure the placement of the kind of public liability insurance which the broking evidence showed would have been available.
16. He found that if the Town Council had made the grant of a licence to the Fair Committee for the use of Fair Hill conditional on such insurance being in place, the probability was that the constituent bodies of the New Fair Committee, or the committee acting on their behalf, would have taken steps to obtain such cover on a joint basis.
17. He concluded that it was fair, just and reasonable to impose a duty of care on the Town Council to see that such insurance was put in place for the following reasons:

1. The Town Council was the body on whose land the primary site of the fair lay, and the community which it represented was a financial beneficiary of the fair.

2. The Town Council, through Mr Morgan, took the leading role in the New Fair Committee.

3. The Town Council, together with the other bodies represented on the New Fair Committee, was well aware by the early 2000's that the risks to safety were considerable and that there was a good deal of procrastination about taking measures to improve control of the event and obtaining appropriate insurance cover. The claimants' loss was therefore foreseeable.

4. The Town Council knew that visitors were attracted to the fair, with economic benefit to the town, and that they would spectate at the various activities which were part of the fair. Furthermore, by its promotion of the fair on its website the Town Council intended that people should visit the fair's activities.

5. It was practicable for steps to be taken to effect public liability insurance which could give some protection to those potentially affected by safety issues.

6. Although the claim was for economic loss, the present claim was to be distinguished from other types of pure economic loss because "it rides directly on the back of a personal injury claim", and public policy lent towards providing a remedy for losses arising from personal injury, rather than eliminating such remedy.

7. A responsible body such as the Town Council, knowing of the risks involved, and knowing that visitors were intended by it to be attracted to the fair, was in a position to see that steps to protect the interests of those visitors were taken.

18. The recorder did not consider it unfair or unreasonable that such a duty of care should extend to seeing that insurance was in place to cover liabilities arising from activities on land over which the Town Council had no direct control, since the location in question was only a short distance from Fair Hill and the Town Council was "the leading light" amongst the bodies who had statutory powers and duties relating to the activities of the fair.
19. The recorder concluded that if an appropriate policy had been effected, the insurer was highly likely to have required far better control measures to be adopted than had been adopted previously, but that probably there would still have been a negligent failure by "the bodies concerned" including the Town Council to see that proper segregation of visitors and horses was taking place, and that the absence of such insurance had caused the claimants to lose the remedy of suing a defendant who was appropriately insured.

The grounds of appeal

20. Mr Michael Kent QC, on behalf of the Town Council, criticised the judgment on a variety of grounds. They may be summarised under three heads.
21. First, he submitted that on numerous points of fact the judgment was either simply wrong and unsupported by the evidence (for example, the finding that the Town Council was the "leading body" in the New Fair Council and in the organisation or coordination of the fair as a whole) or it failed to include important matters.
22. Secondly, he submitted that even if the Town Council was under a duty of care to the claimants to ensure the placement of the kind of public liability insurance which would have been available, the recorder was wrong to find that its failure to do so caused any loss to the claimants, since there was no reason to doubt the ability of any would-have-been insured party to meet any judgment which the claimants might have obtained against it, with or without the protection of such a policy.
23. Thirdly, he submitted that the reasons given by the recorder for the imposition of such a duty of care on the Town Council were inadequate and that it was under no such duty.
24. Mr Philip Havers QC, on behalf of the claimants, contested these criticisms. As to the first, he submitted that it was open to the recorder to make the factual findings that he did. He met the second point by a suggested analysis of the recorder's reasoning to which I will come. As to the third point, he submitted that the recorder did not place too high a burden on the Town Council.

The criticisms of the recorder's findings of fact

25. With the court's encouragement, counsel concentrated their oral arguments on the second and third issues (causation and duty) and I do not consider it necessary to examine in detail the criticisms made of the recorder's primary findings of fact. I am prepared, for the purposes of this appeal, to assume without deciding that it was open to him to make all the primary findings which he did and that there were no other material findings of fact which he should have made on the evidence.

Causation

26. It is usually natural to consider issues of duty before causation of loss, but in this case the way in which the claimants' case on duty was developed during Mr Havers' response to the Town Council's submissions on causation makes it convenient to begin with causation.
27. At the beginning of his judgment the recorder set out a number of questions to be answered. The last was:

"vii. If such insurance could have been arranged, would it have covered the risk which eventuated?"

At the end of the judgment his answer was as follows:

"86…Here it is clear that the very risk which eventuated was one which had been perceived …and I find that on a balance of probabilities if cover had been effected with a competent broker it would have been tailored to meet the perceived risk.

87. The expert was careful to point out however that for indemnity to be obtained, there would have had to be a negligent failure of control. There is a cart and horse situation which arises here, in that if a policy had been effected, the insurer was highly likely to have required far better control measures to be adopted than had been adopted hitherto, and these might have obviated this accident. However, given that despite the desirability of such measures having been recognised before the accident…many still have not been taken despite the happening of the accident, I find on a balance of probability that even if insurance had been in place, there still would have been a negligent failure by the bodies concerned including ATC [the Town Council] to see that proper segregation of visitors and horses was taking place.

88. Therefore I answer question vii affirmatively, and I hold that it is the defendant's failures which have caused the Claimants to lose their remedy of suing a Defendant or Defendants who were appropriately insured for the risk which eventuated."

28. The Town Council's criticism of the recorder's judgment on causation was set out with attractive simplicity in its skeleton argument drafted by Mr Snowden as follows:

"The Judge failed to identify which of the "insured bodies"…would have been legally liable to the Respondents and how, and he failed to indicate why such body or bodies would not have been good for the money in any event, and would have had to have turned to PL insurance (so as to require the Respondents to have a remedy against the Appellant for failing to ensure that such insurance was in place)."

29. On a plain reading of the judgment, this criticism appears to be well-founded and fatal to the claimants' case. Their 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 Town Council. Had any such allegation been made, no doubt the relevant body would have been made a defendant in the action. 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 the claimants 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 the claimants. It would seem to follow that the recorder's conclusion that the claimants suffered any loss from the absence of an appropriate public liability policy is unsustainable.
30. Mr Havers responded by advancing a subtle and ingenious analysis of the recorder's reasoning. It went as follows:

(a) If the Town Council had not been negligent, the New Fair Committee or its constituent bodies would have obtained appropriate public liability insurance.

(b) The insurer's agreement to provide such cover would have been subject to a requirement that more extensive, but still practicable, safety measures should be taken by the insured, such as putting up barriers to separate the public from the flashing lane and from tethering areas.

(c) The insured would have owed a duty of care to visitors to put in place the measures required by the insurers.

(d) The insured would have failed to do so and, in particular, would have failed properly to segregate visitors from horses.

(e) The claimants would therefore have had a claim in negligence against the insured for their failure to have put in place the measures required by the insurer and such negligence would have been covered by public liability insurance, with the result that the claimants would have had a claim against the insured which was covered by the policy.

31. Points (a) and (b) can certainly be found in the judgment. But the critical step in Mr Havers' analysis is point (c), i.e. that by reason of the conditions of the policy the insured would have come under a duty more extensive than any owed to the claimants by any relevant body at the time of Mr Glaister's accident. That is his answer to the argument that, supposing the claimants to have had a valid claim against any such body, there is no reason to doubt its ability to meet such a claim, with or without the benefit of public liability insurance. On Mr Havers' analysis, the relevance of the placement of such insurance to the claimants' loss is not that it would have provided the insured with an indemnity, but that a necessary incident of the policy being taken out would have been that the insured would have incurred a duty of care to visitors to ensure that there was proper segregation and supervision of tethered horses.
32. The argument for imputing this reasoning process to the recorder is that he must have intended it because it is the only way that his finding of causation of loss can logically be sustained. But the analysis presents problems at a number of levels.
33. First, it has an air of artificiality because it involves a tortuous line of thought which the recorder certainly did not express. If that was how he analysed the case, he would surely have explained it.
34. Secondly, on Mr Havers' analysis, steps (d) and (e) become otiose because it would not have mattered whether the insured complied with the insurer's conditions or not. If it did, the accident would not have happened. If it did not, on the claimants' argument they would have had a claim against the insured in negligence. So it was not necessary for the recorder to have decided which outcome was more probable. But he certainly considered it necessary to decide whether the insurance would have "covered the risk which eventuated". This suggests that his reasoning process was not as Mr Havers contends. There is a difference between (1) an alleged benefit to a claimant from having a cause of action against a defendant who has insurance cover in respect of the claim and (2) an alleged benefit from having a cause of action against a defendant which he would not have had but for requirements imposed by the defendant's insurer. The language of the judgment, including the formulation of the final question which the recorder set himself (whether the insurance would have covered "the risk which eventuated"), points to him focusing on the former and not the latter.
35. Thirdly, there is force in Mr Kent's submission that there is a fallacy in simply equating an insured's duty to an insurer with an insured's duty to the claimants. If the insurer had stipulated as a condition of cover that the insured was to undertake organisational responsibilities which it did not undertake, that might vitiate the protection afforded to the insured by the policy but it would not necessarily or automatically enlarge the insured's legal duty to the claimants. There might have been a correlation between safety measures insisted on by the insurers and an insured's duty to the claimant, but it is not axiomatic.
36. Fourthly, loss is only recoverable in negligence if the defendant owed the claimant a duty in respect of the kind of loss which the claimant has suffered: Caparo Industries PLC v Dickman [1990] 2 AC 605 and South Australia Asset Management Corporation v York Montague Limited [1997] AC 191. If the relevant duty of care in the present case was no wider than that which the recorder found, i.e. to ensure the placement of an appropriate public liability policy, but it would have been an incident or consequence of the placement of the policy that the insured would have owed a duty of care to the claimants to see that tethered horses were properly segregated from visitors and properly supervised (because of stipulations imposed by the insurer), the claimants would have no cause of action against the Town Council for failing to procure an incidental or consequential benefit which it had no duty to procure. Mr Havers met this point by submitting that the Town Council did indeed owe a duty of care to the claimants to see that the horses were properly segregated and properly supervised. So I turn to the issue of duty.

Duty of care

37. I begin with the broader duty of care advanced by Mr Havers in the course of his submissions. Shorn of verbal niceties, the submission amounted to saying that the Town Council owed a duty of care to the claimants to see that arrangements were put in place, albeit not necessarily by itself, for the proper segregation and supervision of tethered horses.
38. This in essence was what the claimants first alleged in their pleadings. The first two particulars of alleged negligence were that the Town Council

(a) failed to provide any or adequate system of supervision and/or tethering for the horses, and

(b) failed to cause or require or otherwise ensure that the horses so tethered were supervised by an adequate and/or experienced person.

39. Those allegations were abandoned and in my judgment rightly so. Mr Havers' argument amounted to an attempt to resurrect them under a different guise. Quite apart from the question whether it is open to him to do so, the argument is in my view unsustainable in any event.
40. As Mr Kent rightly observed, this is not a case where it is alleged that there was negligence by a local authority in the exercise of a statutory power or a negligent failure to exercise a statutory power. If a case of that kind had been advanced, it would have been necessary to examine the relevant statutory power. The Town Council was not the occupier of the land where Mr Glaister's accident occurred nor did it cause or direct the various activities of the fair which took place beyond its own boundaries, including the tethering and racing of horses. I can see no arguable basis for holding that it owed a duty of care to assume responsibility for those activities.
41. If the Town Council had no duty of care itself to organise the safe segregation and supervision of horses, I cannot see how it owed a duty of care to procure that a third party did so.
42. I would accept that on the recorder's findings the Town Council could have insisted on some third party agreeing to take responsibility for the segregation and supervision of tethered horses by refusing otherwise to allow its land to be used for the fair (and this would have been simpler than the more roundabout route of refusing consent unless an appropriate insurance policy was put in place, in the expectation that the insurer would only agree to do so if additional safety measures were undertaken). But that is not a sufficient basis for imposing on the Town Council a legal duty to see that the activities of others on land which was not its own were safely conducted.
43. Furthermore, even if the Town Council had been under a duty of care to see that some other party took on responsibility for seeing that tethered horses were properly supervised, the recorder found that as a matter of probability there would have a negligent failure by the body concerned to see that this was done.
44. In those circumstances to hold the Town Council responsible for the consequences of Mr Glaister's accident, which would have occurred even if the Town Council had insisted on some suitable body taking on responsibility for seeing that tethered horses were properly segregated and supervised, would amount to making the Town Council responsible for the negligent act or omission of a third person for whom it had no direct legal responsibility.
45. A defendant, D, is not ordinarily liable to a claimant, C, for personal injury or physical damage caused by the negligence of a third person, T, merely because D could have foreseen and prevented it. Something more is required to place on D a duty to protect C from the consequences of foreseeable negligence on the part of T. The reasons for requiring more are partly to do with the nature of our system of tort and the concept of blame which underlies it, i.e. matters of legal policy, and partly pragmatic.
46. The general policy of the law does not extend to holding D legally to blame for injury to C caused by the negligence of T on the ground that D could have prevented it. The moral tenet that you shall love your neighbour as yourself, and thus protect him from harm which you can foresee he may suffer from a third person's fault, has not been converted into a legal principle. As a matter of generality, to hold a person liable to a victim for injury for which the defendant was not directly to blame, but was caused by the negligence of a third person which the defendant could have foreseen and prevented, would shift the basis of tort liability towards a system for the transfer of losses resulting from injuries not merely caused by the default of the defendant but which a defendant might have been able to prevent. The practical consequences of such a policy shift would be potentially very far reaching.
47. I emphasise that this is no more than a starting point, albeit an important one. There are many cases where D may be liable to C for injury caused by the negligence of T, but these are usually cases where either a particular relationship between the claimant and defendant is such as to place the defendant under a duty of care for the safety of the claimant or a particular relationship between the defendant and the third person is such that the defendant should carry a responsibility to protect others against the conduct of the third person. Examples of the first category are cases where the defendant is an occupier of land and the claimant is a lawful visitor, and cases whether the defendant is the employer of the claimant. An occupier of land owes a general duty of care for the safety of lawful visitors, and this will include responsibility to see that visitors are reasonably safe from activities by a third person which the occupier permits to be carried out on his land. Similarly an employer owes a general duty for the safety of his employees, including safety from the foreseeable behaviour of other employees. Cases where the relationship between the defendant and third person is such as to give rise to liability to a claimant for damage caused by a third person include cases where the third person is an employee or agent of the defendant, who is held responsible for his conduct, and cases where the defendant has a quasi-parental responsibility for the acts of the third person, such as Home Office v Dorset Yacht Co Limited [1970] AC 1004 (where prison officers took young offenders on an outing and allegedly failed properly to supervise them).
48. Mr Havers suggested that the nature of the Appleby Fair made the present case unique, but the potential significance of the arguments put forward in this case is not so limited. Many parish, town or city councils, county councils or regional authorities try in different ways to encourage and support tourism in their area (by which I do not mean land of which the body concerned is the occupier and therefore under a statutory duty of care to visitors.) In many villages, towns and cities there are annual festivals of one kind or another. They vary in size from the small church fete or village show to big carnivals. I would reject the idea that those bodies, public or private, which try to encourage attendance at such events or undertake some responsibility in relation to them thereby expose themselves to legal liability for the negligence of other bodies participating in the event. I do not see the justice of it and I am concerned that the fear of it is likely to act as a deterrent to those, like Mr Morgan, who freely give their time and energies to the encouragement of such events. If that were to happen, the result would be an impoverishment of our community life.
49. I turn to what has been referred to as the free-standing duty of care to procure the placement of public liability insurance, which the recorder held that the Town Council owed to visitors to the fair. The duty here advanced is one stage more remote than seeking to hold the Town Council directly liable for personal injury caused by the negligence of a third person on the ground that the Town Council should have foreseen and prevented it. The claim in this case is for economic loss alleged to have been suffered as a result of the absence of a public liability policy which the Town Council could have taken steps to ensure was in place.
50. This is a novel claim. Mr Havers acknowledged that he was not able to point to any previous similar case. His nearest case was Gwilliam v West Hertfordshire Hospitals NHS Trust [2002] EWCA Civ 1041, [2003] QB 443. In that case the hospital organised a fund-raising fair in its grounds, for which it hired a trampoline attached to wall called a splat-wall. The supplier was negligent in the way that the equipment was set up with the result that the claimant suffered injury when bouncing on it. She sued the supplier but it transpired that his public liability insurance had expired a few days before the fair and so she settled her claim against him for a fraction of its true value. She sued the hospital for the balance of the value of her claim against the supplier on the ground that the hospital owed a duty to visitors to the fair to exercise reasonable care in selecting people responsible for operating equipment at the fair, including a duty to ensure that they were covered by public liability insurance or to warn visitors where there was no insurance. The hospital had asked the supplier whether he was insured and had been told that he was. His answer was true at the time when it was given, but it appeared that unfortunately he failed to renew his policy through oversight and the hospital had not asked to see a copy of the policy. The judge at first instance held that the hospital owed no duty of care to the claimant in respect of which she could recover damages. Her appeal was dismissed, but the three members of the Court of Appeal (Lord Woolf CJ, Waller and Sedley LJJ) arrived at their decision for different reasons. Gwilliam was considered by this court in Naylor v Payling [2004] EWCA Civ 560 (Waller, Latham and Neuberger LJJ) and the judgments in that case show some difference of view as to whether Gwilliam stands as authority for any particular proposition.
51. As I read the judgments in Gwilliam, their reasoning can be summarised as follows. Lord Woolf categorised the claim not as one for economic loss but as a claim for damages for personal injury. The hospital owed the claimant a duty of care under s 2 of the Occupiers' Liability Act 1957 to take reasonable care for her safety in using the premises to which she had been invited. That included a duty to take reasonable care to satisfy itself as to the competence of the supplier of the splat-wall. In order to discharge that duty the hospital ought to have asked him about his insurance position as evidence which was relevant to whether or not he was likely to be competent. Having asked the question, it was reasonable for the hospital to accept the supplier's answer.
52. Waller LJ considered that on the particular facts of the case the occupier's duty of care to its visitors required it to take reasonable steps to satisfy itself as to the supplier's financial viability to meet any claim against it, whether by insurance or otherwise. He agreed with Lord Woolf that the hospital was under no duty to verify the supplier's statement about his insurance position by requiring to see a copy of the policy.
53. Sedley LJ said that there was a difference in principle between harm to a person or property and insurance against inability to recover damages for such harm. The occupier owed a duty to take reasonable care to use only competent contractors, but he did not consider that the occupier owed any duty of care to its visitors to take steps to ensure that its independent contractors would be insured or otherwise able to meet any claim for damages for negligence. He expressed concern about the ramifications if the court were to impose such a duty on a public institution which invited people into its grounds. He asked rhetorically (58):

"What is there, in a legal system which offers equality before the law by seeking to treat like cases alike, to contain this case in a category peculiar to its own facts? If the ambit of a public institution's duty to its visitors embraces an obligation to check on contractors' insurance, why will a private person whose garden is used for a local fete not equally be liable to pay a sum representing full personal injury damages to a visitor injured, perhaps badly, by the negligent supervision of a coconut shy or a greasy pole by an uninsured stall holder? Or why will a householder who fails to check that his or her builder is insured not have to pay heavy damages to a neighbour who has been unable to make a worthwhile claim against the builder when a nail through a water pipe brings the neighbour's ceiling down or a carelessly handled blow torch burns their house down?"

54. I agree with the observation of Neuberger LJ in Naylor v Payling (37) that Gwilliam is a difficult case on any view and that, given the diversity of routes by which the members of the court reached their decision, it would be dangerous to draw any conclusion of general application from the case. In truth, it contains no single ratio decidendi, but for my part I would agree with the approach of Sedley LJ.
55. The fact that this is a novel claim is not necessarily fatal because the categories of negligence are never closed. But the Privy Council and the House of Lords have approved the well-known judgment of Brennan J in Sutherland Shire Council v Heyman (1985) 60 ALR 1, 43-44, where he expressed the view that:

"the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable "considerations which ought to negative, or to reduce or limit the scope of the duty or the class of the person to whom it is owed". "

See Yuen Kun Yeu v Attorney General of Hong Kong [1988] AC 175, 191 and Caparo (618, 633-634).

56. As Lord Oliver observed in Caparo (634), Brennan J was echoing a theme expressed in Hedley Byrne & Co Limited v Heller and Partners Limited [1964] AC 465 by Lord Devlin, whose speech in that case has come to be seen as particularly significant. (See the observations of Lord Goff in Henderson v Merrett Syndicates Limited [1995] 2 AC 145, 178 & ff.) In Caparo (634-635) Lord Oliver cited a lengthy passage from Lord Devlin's speech about the development of the law since Donoghue v Stevenson [1932] AC 562, in which he concluded:

"The real value of Donoghue v Stevenson to the argument in this case is that it shows how the law can be developed to solve particular problems. Is the relationship between the parties in this case such that it can be brought within a category giving rise to a special duty? As always in English law, the first step in such an enquiry is to see how far the authorities have gone, for new categories in the law do not spring into existence overnight."

57. Lord Oliver in an important passage (632-635) observed that the extension of the concept of negligence since the decision in Hedley Byrne to cover cases of pure economic loss had given rise to "a considerable and as yet unsolved difficulty of definition". The postulate of a simple duty to avoid any harm that was, with hindsight, reasonably capable of being foreseen was untenable without the imposition of some intelligible limits to keep the law of negligence within the bounds of common sense and practicality. He observed that those limits had been found by the requirement of what has been called a "relationship of proximity" between the claimant and the defendant and by the imposition of a further requirement that the attachment of liability for the harm which had occurred be "just and reasonable". But it was impossible to identify some common dominator by which the existence of the essential relationship could be tested, and that "to search for any single formula which will serve as a general test of liability is to pursue a will-of-the-wisp". The most that could be attempted is a broad categorisation of the decided cases according to the type of situation in which liability has been established in the past in order to found an argument by analogy.
58. These words needs to be emphasised because there is sometimes a tendency (as the present case shows) to pluck out the words "fair, just and reasonable" as if they provide some comprehensive touchstone. In itself, the expression means little more than that the court should only impose a duty of care if it considers it right to do so. The various speeches in Customs & Excise Commissioners v Barclays Bank plc [2006] UKHL 28, [2007] 1 AC 181 underline the point that the "threefold test" provides no straightforward answer to the question whether in a novel situation a party owes a duty of care (Lord Bingham at 6, Lord Hoffmann at 35-36, Lord Rodger at 53, Lord Walker at 71 and Lord Mance at 93). In considering whether there is sufficient "proximity" to make it just and reasonable to impose a duty of care, the courts examine carefully the nature of the relationship between the parties and begin by considering whether it is reasonably analogous to other cases in which such a duty has been recognised. The court is looking to see whether there is "that special relationship of proximity which is required to give rise to the duty of care" to protect the claimant from economic loss (using the language of Lord Oliver in Caparo at 650F) – which is another way of framing the question posed by Lord Devlin in Hedley Byrne "Is the relationship between the parties in this case such that it can be brought within a category giving rise to a special duty?".
59. The present case does not resemble any other category of case in which liability has been established, so as to found an argument by analogy. None of the factors exist which have lead to the imposition of a duty of care not to cause economic loss in other cases, such as an assumption of responsibility by the defendant (Hedley Byrne) or the provision of a professional service to the claimant (Henderson v Merrett) or the provision of advice about a transaction involving the claimant in the knowledge that the claimant would be likely to rely on it (Smith v Bush [1990] 1 AC 831).
60. For a duty of care to arise, there needs 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 can 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. This need is reflected by the usage of the words "special duty" or "special relationship".
61. There was no such relationship in the present case between the Town Council and the many tens of thousands of members of the general public, including the claimants, who visited the fair.
62. The recorder considered that the ordinary limitations on liability for pure economic loss did not apply in this case since the claim, in his words, rode on the back of a personal injury claim (which it is to be noted was never advanced against anybody) and that public policy lent towards providing a remedy for losses arising from personal injury. It is not entirely clear what claim he had in mind. If he had in mind a claim against the owner of the horse, the claimants were unable to pursue such a claim because it was not known who the owner was; but that of itself has nothing to do with the non-existence of a public liability policy insuring the organisers of the fair. If he had in mind a claim against an authority which had some responsibility for the activity which led to Mr Glaister's accident, that claim was open to be pursued. In either case I can see no sound basis for saying that public policy militates in favour of the duty of care which the recorder found was owed by the Town Council.
63. Looking at the matter as one of general principle, if D had no duty to protect C against the physical consequences of an accident caused by the negligence of T, I would not regard it as just and reasonable to impose on D the more remote duty to protect C against the economic consequences of C being unable to enforce a judgment against T.

Conclusion

64. Mr Glaister acted in a selfless and public spirited way. The consequences for him and his family have been tragic. I can understand the recorder's wish to try to secure some compensation for him but in my judgment his attempt to do so was wrong in law. For the reasons which I have given, I am unable to accept that the Town Council owed to the claimants a duty of care either to ensure the placement of public liability insurance, as the recorder found, or to ensure that there was safe segregation and supervision of tethered horses in the area where the accident occurred. Moreover, if there were a breach of a duty of care to procure the placement of such insurance, but no wider duty of care for the claimants' safety, it did not cause any loss falling within the scope of the duty. For those reasons I would allow the appeal.

Lord Justice Jacob:

65. I agree.

Master of the Rolls:

66. Mr Glaister and his family deserve great sympathy for the serious injuries which he suffered as a result of his public spirited action. However, it seems to me clear that his claim against the Town Council must fail for the reasons so admirably articulated by Toulson LJ, with which I wholly agree.
67. Particularly as, in an earlier judgment, I described the decision in Gwilliam v West Hertfordshire Hospitals NHS Trust [2002] EWCA Civ 1041, [2003] QB 443 as "a difficult case", it may be helpful to confirm expressly that, like Toulson LJ, I find the reasoning of Sedley LJ in that case more convincing than that of either of the other two members of the court.