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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 131
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A839./04
A840/04
A842/04
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OPINION OF LORD WHEATLEY
in the cause
MORRISON SPORTS LIMITED
Pursuers;
against
SCOTTISH POWER plc
Defenders:
_________
BRIAN KENNEDY
PITCHERS
Pursuers;
against
SCOTTISH POWER plc
Defenders:
_________
BALJIT SINGH &
OTHERS
Pursuers;
against
SCOTTISH POWER plc
Defenders:
ญญญญญญญญญญญญญญญญญ________________
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Pursuers: Ivey QC; Stuart, The Anderson Partnership
Defenders: Cullen QC, Barne; Shepherd & Wedderburn
18 July 2007
[1] These
are three related actions which seek to pursue the interests of various property
occupiers and owners following a fire in buildings at 23
Moss Street, Paisley in
March 1998. The first named pursuers
operated a sports goods shop from the address, having taken a lease from the
pursuer in the second action, who is the owner of the premises. The pursuer in the third action is the
proprietor of adjoining property.
Electricity was supplied to the premises by the defenders, and the
pursuers claim that the fire was started because of a fault in the electricity
supply system for which, the pursuers aver, the defenders were responsible.
[2] The
exact mechanism by which the pursuers claim that the fire started is fully
developed in the pleadings. It is
sufficient for present purposes to note that the pursuers say that the
defenders carried out some electrical work in the premises two years before the
fire. In the course of the subsequent investigation,
it emerged that a possible cause for the fire might be found in a metal shim
which, in the course of the electrical work, had been wrapped around the end of
the prongs of a cut-out fuse, so that it could fit more effectively into its
fuse holder. The presence of this shim,
which appeared to be nothing more than a strip of metal wound round the end of
the fuse, and which was not in any sense a standard part or piece of equipment,
caused resistive heating, leading to arcing and thus causing the fire. The pursuers therefore claim that the fire
was caused by the fault of the defenders, and that they have suffered financial
loss thereby.
[3] The
pursuers have tabled two cases of fault against the defenders. The first of these is based on general common
law duties of care which are said to have been breached. It is agreed that these are relevantly
averred and that a proof before answer will require to be held to investigate
them. However, in this respect, the pursuers'
first plea-in-law in each of the three actions suggests that the defenders'
duties of common law care were both direct and vicarious. In the defenders' view, there are no
sufficient averments to suggest why the defenders had themselves failed in these
duties of care, as distinct from being responsible for the actions of their
employees. The only passage in the
pursuers' pleadings where the defenders are said to be directly involved in the
discharge of duties of care is in the esto
case pled at the end of Article 5 of condescendence, where it is said that
the defenders had a duty to replace the fuse with one which did not require to
be fitted with a shim to enable it to be secured into the fuse holder. It is accepted by the pursuers that this
averment is incorrect, and should properly refer to a duty imposed on the
defenders' employees, rather than the defenders directly. These semantic discrepancies were not pursued,
it seemed to me, with any particular enthusiasm. I therefore do not consider that the
distinction between the defenders' direct and vicarious responsibilities in the
present pleadings is of sufficient significance to merit further comment.
[4] However,
the pursuers go on to aver that the fire was caused by the defenders' breaches
of statutory duty, and in particular by their contravention of Regulations 17,
24 and 25 of the Electricity Supply Regulations 1988, as amended by the
Electricity Supply (Amendment) Regulations 1990. The defenders now submit that a simple breach
of these regulations, by itself and irrespective of carelessness, does not give
rise to any civil liability so far as they are concerned, and they seek to have
all references to the pursuers' statutory cases deleted at this stage. The pursuers, on the contrary, claim that
they are entitled to refer to the alleged breaches of the statutory duties
which they say are incumbent on the defenders in order to establish their case
for damages against them. The question
at issue in this debate, therefore, was whether or not a breach of the cited
statutory duties gives rise to a private civil right of action which allows a claim
in damages in respect of that breach.
[5] There
is no doubt that in certain circumstances a person who has suffered damage as a
result of a breach of statutory duty may have a private common law right of
action based on that breach, which is distinct from an action based on
negligence arising out of a breach of common law duties of care. It
will not generally be presumed that such a statutory breach will afford such a
right; but if a pursuer can demonstrate
that, having regard to the terms and construction of the particular statutory
provision in question, firstly that a statutory duty was introduced for the
purpose of protecting a limited class of the public into which the pursuer
falls, and secondly that Parliament intended to confer on the members of that limited
class a private right of action for breach of that duty, such a private right
of action may exist. In X (Minors) v Bedfordshire County Council [1995] 2 AC 633, Lord
Browne-Wilkinson, in dealing with a case involving (as in the present case) a
breach of statutory duty simpliciter,
said (at p 731):-
"The principles
applicable in determining whether such statutory cause of action exists are now
well established, although the application of those principles in any
particular case remains difficult. The
basic proposition is that in the ordinary case a breach of statutory duty does
not, by itself, give rise to any private law cause of action. However, a private law cause of action will
arise if it can be shown, as a matter of construction of the statute, that the
statutory duty was imposed for the protection of a limited class of the
public and that Parliament intended to
confer on members of that class a private right of action for the breach of
duty. There is no general rule by
reference to which it can be decided whether a statute does create such a right
of action, but there are a number of indicators."
[6] A
similar approach was taken by Lord Diplock in Lonhro Ltd v Shell Petroleum
Co Ltd (No. 2) [1982] 18 A.C. 173
at p 185:-
"The sanctions Order
thus creates a statutory prohibition upon the doing of certain classes of acts
and provides the means of enforcing the prohibition for a criminal offence
which is subject to heavy penalties including imprisonment. So one starts with the presumption laid down
by Lord Tenterden C.J. in Doe d. Murray v
Bridges (1831) 1 B & Ad. 847, 859 where he spoke of the 'general rule'
that 'where an Act creates an obligation, and enforces the performance in a
specified manner.... that performance cannot be enforced in any other manner,' -
a statement that has frequently been cited with approval ever since, including
on several occasions in speeches in this House.
Where the only manner of enforcing performance for which the Act
provides is prosecution for the criminal offence of failure to perform the
statutory obligation or for contravening the statutory prohibition which the
Act creates, there are two classes of exception to this general rule.
The first is
where on the true construction of the Act it is apparent that the obligation or
prohibition was imposed for the benefit or protection of a particular class of
individuals, as in the case of the Factories Act and similar legislation".
It should be added that this
particular area of jurisprudence seems to be founded specifically in English
remedies in tort, but it appears at least on one occasion to have been adopted
and accepted in Scotland.
[7] The
question of whether a breach of the statutory standard does in any particular
case found an action in private law therefore involves an examination of a
number of issues. The first of these
will generally be the terms of the relevant legislation. It appears to be accepted that the
construction of each statute depends ultimately on its own terms, and it is in
general difficult to formulate principles which will apply in every case; Todd
& Ors v Adams & Chope (The Maragetha Maria) [2002] 2 Lloyds Rep 293 para.16; Clerk & Lindsell
on Torts 19th Edition (2006) para. 9-04. However, it is worth noting at this stage, as
the learned authors of Clerk & Lindsell indicate, that when the question of
whether the statute does give rise to an action in private law has been
determined in favour of a particular pursuer, there are then further issues
which still have to have be examined. It
must be shown that there was a breach of the statutory duty in question, which
caused the loss sought to be recovered.
Further, the pursuer must show that the damage suffered fell within the
ambit of the statute; in other words
that it was the kind of damage that the legislation was intended to prevent,
and that the pursuer belonged to the category of persons that the statute was
intended to protect. It is therefore
insufficient simply to relate the loss to the breach of statutory duty; there must be some reasonable relationship
between the damage caused to the individual claimant and the purpose for which
the statute was enacted. In addition, the
authors note that questions of foreseeability and the normal rules of
remoteness of damage will also have to be considered; the terms of the statute may determine the
nature of the civil liability thus created;
and the question of any available defence must be considered.
[8] The
first matter, therefore, which has to be examined is whether the statutory
provisions expressly or implicitly provide that a breach of the statutory duty
will provide a civil remedy of the kind described. Normally, (as in the present case), the
legislation is silent as to whether any remedy exists. In these circumstances it is necessary to
look to the terms of the statute and any associated regulations to see whether
there can be discerned on the part of Parliament an intention to provide a
private civil right of action arising out of a breach of those provisions. In conducting this exercise, the court will
wish to consider various presumptions or "indicators", of the kind referred to
earlier in the speech of Lord Browne Wilkinson in the case of X (Minors) v Bedfordshire County Council, and discussed in the various
authorities. There is however little
guide as to what weight should be attached to each of these various indicators,
although it has been said that where the damage is physical, and in particular
relates to personal injuries, it may be more likely that Parliament will be
deemed to have intended to create a private remedy than where the damage is
purely economic loss (Clerk & Lindsell supra,
para. 9-11).
[9] Accordingly
I turn to examine the legislation which the pursuers seek to invoke. As I have said, it does not specifically make
provision for civil liability. The
regulations cited by the pursuers in support of their claim were made under the
enabling powers contained in section 40(6) of the Electricity (Scotland)
Act 1979 and section 16 of the Energy Act 1983.
[10] Section 16(1) provides:-
"The Secretary
of State may make such regulations as he thinks fit for the purpose of -
(a) securing that supplies of electricity by
Electricity Boards or other persons are regular and efficient; and
(b) eliminating or reducing the risk of
personal injury, or damage to property or interference with its use, arising
from the supply of electricity by an Electricity Board or any other person,
from the use of electricity so supplied or from the installation, maintenance
or use of any electrical plant."
[11] Section 16 was superseded by section 29 of the Electricity Act
1989. Section 29(1) of that Act
provides:-
"The Secretary
of State may make such regulations as he thinks fit for the purpose of -
(a) securing that supplies of electricity
are regular and efficient;
(b) protecting the public from dangers
arising from the generation, transmission, distribution or supply of electricity,
from the use of electricity interconnectors, from the use of electricity
supplied or from the installation, maintenance or use of any electrical line or
electrical plant; and
(c) without prejudice to the generality of
paragraph (b) above, eliminating or reducing the risk of personal injury, or
damage to property or interference with its use, arising as mentioned in that
paragraph."
Section 29(3)
provides:-
"Regulations
under this section may provide that any person -
(a) who contravenes any specific provisions
of the regulation; or
(b) who does so in specified circumstances,
shall be liable
on summary conviction to a fine not exceeding level 5 on the standard
scale; but nothing in the subsection
shall affect any liability of any such person to pay compensation in respect of
any damage or injury which may have been caused by the contravention."
[12] The Electricity Supply Regulations 1988 (as amended by the
Electricity Supply (Amendment ) Regulations 1990) were made by the Secretary of
State for Scotland
in relation to Scotland
in exercise of the above powers conferred on him by the said section 16
and section 40(6). Regulation 17
provides:
"All supplier's
work shall be sufficient for the purposes for, and in the circumstances in,
which they are used and so constructed, installed, protected (both electrically
and mechanically), used, and maintained as to prevent danger or interruption of
supply as far as is reasonably practicable."
[13] Regulation 24 provides:-
"The supplier
shall take all reasonably practical steps to inspect his installations and
works to ensure compliance with these regulations."
[14] Regulation 25(1) provides:-
"The supplier
shall ensure that all his works on a consumer's premises which are not under
the control of the consumer (whether forming part of the consumer's
installation or not) are:-
(a) suitable for their respective purposes;
(b) installed and, so far as is reasonably
practicable, maintained so as to prevent danger;
(c) ............"
[15] Counsel for the defenders submitted that it was clear that
nothing in these various statutory provisions indicated that Parliament had
intended to create a private civil right of action which might arise out of any
breach of the legislation. The present
action refers to secondary legislation; but the first matter that had to be examined was
whether the parent Act, in the absence of explicit provision, allows the
relevant ministers or Secretary of State power to create such a private
right. Reference was made to Clerk &
Lindsell, para. 9-44 and to Todd &
Ors v Adam & Chope, para.
16. In the present case neither
section 16 in particular, nor section 29, appeared to suggest that
those enabling sections contemplated such a private remedy. The basic position therefore, in the absence
of a clear indication, was that there must be a presumption that a breach of
the statutory duty in the present case does not give rise to a private civil
right of action (see Clerk & Lindsell, para 9.06; X
(Minors) v Bedfordshire CC per Lord Browne-Wilkinson at p. 731). Also, because the creation of any private
civil rights would depend upon a construction of statutory provisions, the
nature of that construction should be narrow and restrictive (Lonhro Ltd v Shell Petroleum Co Ltd (No.2) supra;
Clerk & Lindsell, para.9-12);
only limited and closely defined exceptions should be allowed to escape
the presumption that no such rights could be created.
[16] Counsel further argued that the power to create regulations
does not in itself create any private rights.
The fact that the regulations are designed to secure the prevention of
injury and damage to property was a neutral consideration, and section 16
provides for enforcement under the criminal, and not the civil, law. It was important to note that the exempting
powers contained in section 16(2)(g) were very wide; this clearly suggested that Parliament had
not intended to create private civil rights for the benefit of those persons
whom the Act was designed to protect.
Accordingly, there was nothing in the parent Act (nor under the earlier
provisions in section 40(6) of the 1979 Act) which supported the pursuers'
claim. The pursuer had therefore failed
to satisfy the necessary test that there must be clear and cogent evidence that,
as a matter of statutory construction, Parliament intended that the legislation
should create a private civil right of action in the present circumstances.
[17] This view was reinforced, in counsel's submission, by an
examination of the secondary legislation.
As is to be expected, the Electricity Supply Regulations as amended also
fail to contain any specific indication that any private rights of action are
to be created. The regulations, it was
argued, set up a sophisticated enforcement, regulatory and administrative
scheme for the supply of electricity (particular reference was made to
Regulations 33-39) and while there were provisions about safety, those did
not themselves create a civil liability for any breach of the regulations. In Part VII of the Regulations careful
consideration is given to enforcement;
but again nothing is said about the creation of any private civil
liability. All this indicated, in
counsel's submission, that no such liability was contemplated by the
legislation.
[18] Counsel for the defenders then argued that there were further
indicators that could be inferred from an examination of the regulations which clearly
suggested that no such private rights were intended to be created. The regulations are aimed at protecting
public safety and securing the supply of electricity; this suggested that they were not intended to
confer private rights. Other means of
enforcement are available under the regulations; regulation 39(3) and(4) provides for
compensation to be made to customers by electric suppliers in certain
circumstances. The duties described in
the legislation were incumbent not only on suppliers of electricity, but also
on consumers and the general public.
That individuals as well as corporate bodies can be prosecuted under the
regulations emphasised the public nature of the remedies provided. There was therefore clearly no special or
limited class of persons to be protected in terms of the legislation. That there are recognised common law duties
of care in this area, distinct from any civil rights that may proceed from a
breach of a statutory duty, all suggested that no private remedies are
available. Reference was made to R. v Deputy
Governor of Parkhurst Prison, Ex p. Hague [1992]1 A.C. 58 per Lord Bridge of Harwich at pp.159-161
and Lord Jauncey of Tullichettle at pp. 170-171.
[19] Counsel then considered the significance of section 29(3)
of the 1989 Act quoted above. This makes
reference to the fact that nothing in the statute should restrict anyone's
right to claim for "compensation".
First, counsel maintained that this section had no bearing on the 1988
Regulations, as it was contained in a subsequent enactment. Schedule 17 of the 1989 Act made it
clear that these were savings and transitional provisions, so
section 29(3) was irrelevant to the present case; the 1988 Regulations were not made under
section 29. Section 29(3)
looked to the future, and the proviso at best for the pursuers simply protected
common law rights. The term "compensation"
as used in the section was not the same thing as loss and damage following a
breach of statutory duties; it was
extremely unlikely that the statute had created such a civil private right by
this means. In any event "compensation"
had a special meaning in terms of section 39 of the Act; and it
was clear when compared with the terms of section 29 that, whatever
Parliament meant, no such general private right as claimed by the pursuers was
intended to be created. Finally, section
29 clearly does not contemplate purely economic loss such as the recovery of
rent or loss of profit. In these
circumstances there can be no possibility of the pursuers in these actions
suing for loss of rent or loss of profits.
[20] Finally, counsel looked at some cases in order to find helpful
comparisons. He relied in particular on
the case of Beckett & Sons (Lyndons)
Ltd v Midland Electricity Plc
(Jan 14. 2000, QBD). In that case a fire
broke out in some chicken sheds and an egg-packing factory through a fault in
the electricity supply. The claimants'
primary case was that Regulation 25(1) of the Electricity Supply Regulations
1988 (cited in paragraph [14]) was, as in part of the pursuers' case here, the
source of a discrete private civil remedy based on a breach of that
regulation. The defendant's case was
that the legislation was concerned with the obligation of the supplies of
electricity to the public at large, and did not of itself give rise to a
separate civil remedy for any such breach.
The Deputy High Court Judge (Mr Peregrine Simon, Q.C.) noted that
the relevant legislation was silent on the question of this kind of remedy, and
that the question at issue was whether the claimant had a right of action in
damages irrespective of the existence of other statutory remedy. Referring to the judgment of Lord Browne-Wilkinson
quoted earlier, the Deputy Judge found that it was arguable that the claimants
fell within a class which was intended to be protected by the regulation, namely
those affected by the risks of damage to property. However, he concluded [para. 31] that
the claimants had failed to show that Parliament intended to confer a private
civil right to claim damages for a breach of the statutory duty. Firstly, he considered that the sanction of
criminal consequences for any breach provided in the regulations secured the
necessary statutory protection, and that this indicated that no private right
of action was intended. Secondly, he
decided that Parliament had not intended breaches of the regulations to be "widely
invoked", because the power to bring criminal proceedings is confined to the
Secretary of State and the Department of Public Prosecution. Thirdly, the claimants had argued that the
reference in s. 29(3) to compensation was an indication that Parliament
intended to create a civil action for breach of the statutory standard; however, the learned judge came to the view
that the term was restricted in its application to a claim for compensation
under criminal legislation. Although the
third ground was not of particular assistance, counsel argued that the first
two reasons that the Deputy Judge found for rejecting the idea of a separate
civil right of action, in a case which was virtually identical to the present,
were highly persuasive and should be followed.
[21] For the pursuers, counsel accepted that the regulations were
silent on the question of whether a civil right of action existed, but argued
that it was incorrect to suggest that that was an end of the matter. None of the safety regulations under the
Health and Safety legislation did so either.
In these circumstances the Court required to look at the various
indicators to determine whether Parliament intended to give a civil right of
action to those affected by a breach of these regulations. Counsel submitted that section 16 of the
Energy Act 1983 demonstrated two clear aims;
the first was to secure the supply of electricity; the second was to protect users of
electricity against personal injury and damage to property. As a primary purpose of the legislation was
to provide protection against such personal injury and damage, it would seem
obvious that it was also intended to provide a private civil right for damages
in the event of breach of those provisions.
Similarly, the secondary legislation in the form of the regulations
cited by the pursuers in support of their claim was also directly concerned
with the prevention of personal injury and damage to property; it followed therefore that Parliament could
not be said to have wanted to exclude such civil rights of action. It was certainly true, as the defenders
submitted, that the regulations also contained a number of technical, regulatory
and compliance provisions but in the present case these regulations were of no interest. The regulations depended upon by the pursuers
were limited and specific to protect individuals from the dangers of
electricity and were not just social, administrative or regulatory in character
(see Clerk & Lindsell, supra, para.
9.13; X (Minors) v Bedfordshire
County Council at p. 731). The
principal indicators in the present case would therefore suggest that the
legislation contemplated the creation of a private civil right of action.
[22] The second indicator examined by the pursuers was concerned
with an examination of the remedy expressly provided by the relevant regulations
in the event of a breach. The fact that
only a criminal sanction was expressly provided in the present legislation did
not mean that a civil right of action was precluded. Reference was made to Clerk & Lindsell, supra, para. 9-22; and Groves
v Lord Wimborne [1898] 2 QB 402. That part of the indicator was therefore
neutral. However, pursuers' counsel
further submitted that the remedies provided by a breach of the 1988
Regulations were simply not adequate, taking into account the interests of
parties who have suffered as a result of a breach of the regulations. The only sanction provided by the statute is
a fine up to level 5 on the standard scale.
Compensation orders were available but these are discretionary. The enforcement and compliance parts of the Regulations
were of little use to those who have suffered loss. Accordingly, this strongly suggested that there
was a need for there to be a private right of action arising out of the
legislation, in order to give to any injured party an effective remedy. The fact that there would in any event be a
common law remedy in the same circumstances following a breach of the
regulations was neither here nor there (Clerk & Lindsell supra, para. 9-25). The defenders' claim in response that simply
because there was a criminal sanction indicated that the Act envisaged that any
remedy was to be public rather than private simply did not follow; there were many examples, for example in the
Health and Safety regulations, which did not bear this out (X (Minors) v Bedfordshire County Council, at p. 731F and G).
[22] The pursuers further argued that because these regulations
referred to suppliers, consumers and others, that did not mean that Parliament
could not have intended to confer private rights on such a large group or class
of persons. These various groups were
subject to different parts of the legislation.
It was accepted that consumers would form a numerous group, indeed most
of the population. However, that did not
necessarily mean that a private right was not created. While the number of persons in the protected class
will be large, they will not be exposed to risk all the time; there was therefore a threshold
protection. The importance of the risk
will determine the scope of the class protected, and this will be subject to
the normal standards of applicability, relevance and remoteness.
[24] Counsel for the pursuer then referred to section 39 of the
1989 Act. This contains provisions in
respect of what is termed "compensation".
Counsel for the defenders had maintained that the 1989 Act did not apply
to the 1988 Regulations, but pursuers' counsel argued that the Act was designed
to apply to all regulations present and future, and it was a legitimate
inference that the preservation of rights in respect of compensation applied to
all civil remedies that might arise from a breach of the regulations.
[25] There was a final indicator which pursuers' counsel suggested could
be discovered in the particular consequences of a breach of the regulation. Counsel for the defenders had suggested that
purely economic loss would be less likely to suggest that Parliament intended
to create a civil right than a breach which resulted in personal injury or
damage to property; therefore, some of
the heads of loss in this case, such as loss of rental income or profits would
be excluded from the sort of remedy that the pursuers contended for. However, the pursuers argued that all this
loss in the present case flowed in fact from damage to property. In the circumstances, the weight of all the
indicators suggested that Parliament had intended that the regulations cited by
the pursuers were intended to create a private civil right of action for damages
for any breach of those regulations.
[26] In the circumstances of the present case I considered that the
pursuers' submissions were to be preferred. It is clear that breach of a public right does
not by itself give rise to a claim for damages:
that must be based on a private law cause of action. As the legislation with which this case is
concerned makes no specific provision as to whether civil private rights of
actions will follow from any breach, what has to be examined is whether there
are any indications within the relevant provisions that Parliament intended to
create such a right. This exercise, as
has been pointed out on a number of occasions, will depend on the terms of the
particular statute. The fact that the
statute is silent does not in itself indicate that the matter is necessarily unclear. Such inferences have been drawn in the past; reference was made in argument to breaches of
many of the provisions of the Health and Safety at Work legislation which carry
civil as well as criminal liability, although section 47 of the Health
& Safety at Work etc Act 1974 does specifically provide what parts of the
relevant legislation will, and what parts will not, give rise to civil
liability.
[27] The first and most immediate indication as to whether a
particular statute or set of regulations intend to create a private civil right
of action arising from a breach of that legislation would seem, from what is
said in the authorities cited in argument, to depend upon an examination of the
nature and purpose of the legislation in question. If that legislation is designed to prevent or
diminish the danger of personal injury to a member of a particular class
capable of being defined by the statute itself, that will afford a very strong
indication, amounting almost to a presumption, that a breach of the provision will,
if other conditions are satisfied, carry a private civil remedy as well. "Where the statute is designed to protect
physical safety, there is a greater willingness to interpret the statute as
conferring a right of action, despite the existence of a penalty. Industrial legislation provides plentiful
examples: ..." (Clerk & Lindsell, para. 9.24).. In Butler
(or Black) v Fife Coal Co Ltd
[1912] A.C.149, Lord Kinnear (at page 165), in the context of considering
whether upon a proper statutory construction of a particular Act it was apparent
that the obligation or prohibition was imposed for the benefit or protection of
a particular class of individual said:-
"There is no
reasonable ground for maintaining that proceeding by way of penalty is the only
remedy allowed by the statute.... We are to consider the scope and purpose of the
statute and in particular for whose benefit it is intended. Now the object of the present statute is
plain. It was intended to compel mine
owners to make due provision for the safety of the men working in their mines,
and the persons for whose benefit all these rules are to be enforced are the
persons exposed to danger. But when a
duty of this kind is imposed for the benefit of particular persons there arises
at common law a correlative right in those persons who may be injured by its
contravention".
I refer also to the passage already
cited from Lonhro Ltd v Shell Petroleum Co Ltd (No.2) at page
195, and to Clerk & Lindsell, paras.9-11, where the learned authors note in
this context that "as a general proposition where the damage is physical,
particularly personal injuries, the claimant is on stronger ground than where
the damage is economic loss.....".
[28] From these various passages I infer that the first
characteristic of any legislation, breach of which will give rise to a private
civil right of action, is that it is designed to provide protection against the
risk of personal injury. The same principle
can be applied, in my view, to provisions designed to prevent damage to property
and the loss thereby ensuing. This is
particularly so in the legislation in the present case, where breaches of the
relevant provisions contemplate equally the possibility of either physical
injury or damage to property.
[29] In the present case there is no serious challenge to the idea
that section 16 of the Electricity Act 1988 and regulations 17, 24 and 25
of the Electricity Supply Regulations 1988 are concerned with questions of
safety and the protection and diminution of danger of personal injury and
damage to property. That would appear to
be a clear indication that a breach of
such legislation might afford a private civil remedy, as well as any other
consequences described in the legislation.
Equally clearly, had the relevant regulations been concerned not with
personal injury and damage to property, but rather with directory or regulatory
matters concerned with issues such as compliance and enforcement, registration
or even technical matters, it would be much more difficult to read an inference
of civil private rights into the legislation.
Breach of some regulations, such as those concerned with social welfare
are generally considered not to carry the provision of civil remedies (X (Minors) v Bedfordshire C.C. at p. 731-732;
Clerk & Lindsell; para 9.03). In Roe
v Sheffield City Council & others [2004] Q.B.653, in dealing with the
statutory duty on a tramway company to maintain the highway between and around
the rails of their system, Pill L.J. at para.[49] said:-
"It is, in my
judgement, likely that, having authorised an interference with the highway,
Parliament intended to create a private course of action where the duties
imposed on the tramway company in the statute conferring the right are
breached. The situation is much more
akin to the statutes imposing duties on employers than to the schemes of social
welfare considered in cases such as X
(Minors) v Bedfordshire County
Council [1995] 2 A.C.633. The duty
is limited to the physical construction and maintenance of works and is quite
specific. As to the alleged, though in
context somewhat nebulous requirement for a limited class, road users will be
very numerous but one, in my judgement, sufficiently a class for present
purposes. In Phillips v Brittania Hygienic
Laundry Co Ltd [1923] 2 K.B.832, 841, Atkin L.J. considered that
'one who cannot be otherwise specified than as a person using the highway' met
the requirement. He could bring himself
within the benefit of the Act. The road
user's position is in the circumstances very different from the beneficiaries
of welfare legislation contemplated by Lord Browne-Wilkinson in the X (Minors) case [1995] 2 A.C.633".
While there are differences between
the statutory remedies which were being considered in that case, and those
which apply in the present, I find little difficulty in applying that line of
reasoning to sit comfortably with the facts and circumstances of this case, and
accordingly I feel able to conclude in general terms that legislation which
seeks to secure the safety of the public is likely to provide a private civil right
of action in respect of any breach of that legislation. It is of coursre possible to have legislation
which contains provisions which are both regulatory and directory on the one
hand and which are designed to protect the public on the other; in the circumstances the latter provisions of
the legislation may create a private civil remedy while the former may
not.
[30] However, a further aspect which has to be examined in order to
determine if Parliament intended that a particular piece of legislation should
afford a civil private right of action is whether there can be identified a
class of persons which the legislation was designed to protect. In addition, a common law action for breach
of statutory duty only arises when a claimant who falls within that category
can establish that Parliament intended that the breach of the relevant
statutory duty should be actionable by an individual harmed by that breach. I refer to the passage from the speech of
Lord Browne-Wilkinson in X (Minors) v
Bedfordshire County Council, cited
earlier.
[31] So the questions which arise in this respect are these:- are the pursuers in the present case members
of a class of the kind which Parliament intended to protect and for which Parliament
intended to confer private law rights of action? I can see no reason why they should not be so
regarded. In Phillips v Britannia Hygienic
Laundry Co [1923] 2 KB 832 at 841. Aitken LJ considered that a
sufficient class of particular of individuals could be defined even though all
members of the public were members of that class:-
"The duty may be
of such paramount importance that it is owed to all the public. It would be strange if a less important duty,
which is owed to a section of the public, may be enforced by an action while a
more important duty owed to the public at large can not. Right of action does not depend on whether a
statutory commandment or prohibition is pronounced for the benefit of the public,
or for the benefit of a class. It may be
conferred on anyone who can bring himself within the benefit of the Act,
including one who cannot be otherwise specified as a person using the highway."
I refer also to the passage from
the judgment of Pill L.J. in Roe
v Sheffield City Council cited earlier.
[32] In the present case I see no reason why consumers of
electricity cannot be regarded in the same way as persons using a highway. The purpose of the relevant regulations cited
by the pursuers is the protection of consumers of electricity from injury to
persons or property. That all such persons should be so protected is a matter
of considerable significance. The
pursuers are each variously persons who are entitled to that protection. They are therefore in my opinion brought
within the benefit of the Act.
[33] Also, it appears in the present case that the class of person
sought to be protected is not completely unqualified. The Act and regulations grants protection to,
and demands duties of various kinds of, all manner of persons concerned with
electricity, suppliers, consumers and members of the general public. The protection offered by any legislation may
be to different classes of person in different ways, and while all members of
the public may at some time come within the ambit of the legislation for
certain purposes and at various times, the specific provisions with which the
present case is concerned are directed at consumers of electricity at the point
where they are affected by dangers in the supply of electricity. There is therefore every reason to suggest
that the present pursuers fall within that class of person which the relevant
legislation is designed to protect.
[34] While the nature and terms of the legislation and the class of
persons the Act is deemed to protect are the strongest indication of the
intentions of Parliament in this area, further indicators can be found on an
examination of other remedies provided by the legislation, particularly in
respect of the further crucial question of whether Parliament intended to
confer private rights of action on members of the protected class. These are not necessarily topics which in the
past have always proved to be particularly persuasive. However,
in X (Minors) v Bedfordshire County Council, Lord Browne-Wilkinson said (again
at p. 731):-
"If the statute
provides no other remedy for its breach and the Parliamentary intention to
protect a limited class is shown, that indicates that there may be a private
right of action since otherwise there is no method of securing the protection the
statute was intended to confer. If the
statute does provide some other means of enforcing the duty that will normally
indicate that the statutory right was intended to be enforceable by these means
and not by private right of actions: Cutler & Wandsworth Stadium Ltd [1949] A.C. 398; Lonrho Ltd v Shell Petroleum Co Ltd (No. 2) [1982] A.C. 183. However, the mere existence of some other
statutory remedy is not necessarily decisive.
It is still possible to show that on the true construction of the statute
the protected class was intended by Parliament to have a private remedy. Thus the specific duties imposed on employers
in relation to factory premises are enforceable by an action for damages,
notwithstanding the imposition by the statute of criminal penalties for any
breach: see Groves v Wimborne [1898] 2 QB 402."
[35] In the present case, the pursuers argued that the remedy
provided by the statute was patently inadequate, restricted as it is to a fine
at level 5 of the standard scale. I
agree that the remedy provided by the legislation in the instant case is liable
to be quite insufficient having regard to the potential interest of pursuers
who have suffered loss or damage as a result of breaches of the legislation. Compensation orders can be made by a court
following successful criminal prosecution, but these are entirely
discretionary. By no means every breach
of the legislation is prosecuted Because the remedy provided by the legislation
in the present case is clearly insufficient (as distinct, for example, from the
remedies provided in the legislation which featured in Lonrho v Shell Petroleum Co
Ltd and Cutler v Wandsworth Stadium Ltd [1949] A.C. 398,
which were regarded as significant), that remedy does not necessarily secure
the protection the statute was meant to give.
That, in my view, is if anything an indication that Parliament must have
intended that a further remedy be made available to members of the protected
class, such as is now contended for by the pursuers. In Grove
v Wimborne the only penalty was a
modest fine in the event of a breach of the legislation, which could be given
at the discretion of the Secretary of State to the injured party. This was held to be inadequate; and the fact that the injured party might not
receive any benefit, that the fine itself was assessed by reference to the
nature of the offence rather than the extent of the injury, and the limit of
the fine, were all held to indicate that Parliament had not intended to
dispense with a private civil right of action.
The same considerations would in my view appear to apply in the present
case.
[36] Nor was I persuaded by the defenders' submissions that, as a
general proposition, Parliament did not intend to create private law rights
because common law remedies already exist in the area covered by a breach of
the regulations; such private rights, it
is accepted, are available in other areas such as the Health and Safety at Work
legislation. Nor was I convinced by the
proposition, again put forward in general terms by the defenders, that because a
statute provides a criminal remedy it must have intended a public rather than a
private remedy. There is no real reason
why that proposition, baldly stated as it was, should necessarily be valid, and
again it is not a principle that applies to other statutory provisions. Finally, there appears to be little reason in
logic to hold that because there are significant exemptions provided in the
legislation, that suggests that Parliament did not intend to confer private civil
rights of action. Such indicators are
therefore far from being decisive or helpful.
[37] Neither in my view was there assistance to be gained from the
competing contentions on the meaning and effect of section 39 of the 1989
Act. I am not certain that the terms of
that section can be applied retrospectively to the 1988 Regulations; nor that those terms can suggest that it was
the specific intention of Parliament to provide a private civil remedy for a
breach of those regulations. The term
"compensation" seems to me to refer to the provisions concerning compensation
later in the Act (section 39). Claims
for personal injury or for loss following damage to property do not appear elsewhere
in the legislation to be referred to as compensation; it would be surprising if that were so. Nor does the reservation of a civil claim of
one kind, such as compensation, by itself give an indication that Parliament
intended to create a specific private civil right in respect of a breach of
those statutory provisions. This
indicator, therefore, is also of no significant value.
[38] Finally, in this context, the defenders submitted that it was
necessary to consider the nature of the financial consequences of a breach in
considering whether a private civil right of action was meant to be
created. The argument was that it was
less likely that such a right would be created when the consequences involved
were losses of purely a financial kind as opposed to damages for personal injury. This argument would seem to suggest that, for
the same breach of the legislation, a claimant could recover damages for personal
injury and for damage to property, but not for loss of rental or for loss of
profits. In the present cases that would
mean that in each of the actions raised by Mr Pitchers and Mr Singh,
the pursuer could not recover any of the damages he seeks, which are
essentially for loss of rental income; and
that in the Morrison Sports Limited case, the pursuers could not recover their
claim for loss of profits. This argument
did not seem to me to be persuasive. If
a private civil right of damage is created then I can see no reason why the
normal rules concerning consequential damages should not be applied. What is claimed by the pursuers in this
regard amounts to losses following directly from damage to property, as pursuers'
counsel maintained. The essence of the
remedy provided by the statute is in respect of the breach, not in the nature
of the consequential loss. I can find no
reason why distinctions were sought to be made by the defenders as to the kind
of damages which could be recovered, once a breach of statutory duty had been
established, could be justified. Nor is
there any apparently logical reason why the nature of the consequential loss
should determine whether or not a private civil right exists. I am not therefore persuaded that the
averments of loss of rental income or loss of profits should be deleted from
the pleadings at this stage.
[39] Finally, I should deal with the case of Becket & Sons (Lyndons) Ltd v Midland Electricity plc. The
first matter of interest is that in circumstances similar to the present case,
the learned judge (at para. 31) found it arguable that the claimants fell
within a class which was intended to be protected by the present legislation from
the risk of damage to property. However,
he concluded that the claimants then failed to show that Parliament intended to
confer a private right to claim damages for a breach of statutory duty. The first reason he gives for this conclusion
was that the regulations provided a clear method of securing the protection which
the statute was intended to confer by providing the sanction of criminal
prosecution. As I have indicated in
paragraph [34] of this Opinion, I do not consider that in the circumstances the
legislation cited in the present case does provide adequate protection. Secondly, the learned judge found, in the exclusive
power to bring criminal proceedings retained by the Secretary of State or the
Director of Public Prosecutions, a suggestion that Parliament did not intend a
breach of the regulations to be widely invoked.
I do not consider that this conclusion is justified. Such a restrictive view does not appear to
operate elsewhere in the legislation, for example, in the Health & Safety
at work legislation. The final reason
given refers to the reservation of compensation claims in section 29(3) of
the Act; while I agree with the conclusions reached by the learned judge, I do
consider that it is in any way a decisive indicator. In the circumstances, therefore, I cannot
with respect agree with this part of the learned judge's decision in that case,
and I do not consider myself bound by it.
[40] I now turn to the minor pleading matters referred to by junior
counsel in their opening addresses. It
is agreed that the second plea for the pursuers should be deleted. The remaining criticisms were chiefly
concerned with the sort of minor pleading points that ideally should be dealt
with between parties before the case comes into court. For instance, in the course of the latter
part of Article 4 of the Condescendence the pursuers make a series of calls on
the defenders. These, it was said, were
unnecessary, because the nature and extent of the fire were agreed. However, liability appears still to be
disputed and there may be some relevance in these calls; if the defenders are satisfied there is no
relevance in them they can be ignored.
In Article 7 of Condescendence, the defenders complain that there
is no vouching of the various heads of loss claimed by the pursuers, and they
are therefore impeded in their ability to investigate these claims. The pursuers argue that this is all a matter
of proof, and while that is correct to some extent, I am equally satisfied that
in terms of good practice, the vouching promised by the pursuers, which is
clearly available, should be immediately given to the defenders. Nor am I in a position to consider whether
the possibilities of double recording of loss as claimed by the pursuers can be
established on the present pleadings; I
assume this is not the case but, again in any event the matter can be
definitively determined at proof. Counsel
for the defenders also submitted that it was not clear that the value of the
furniture and fittings was a loss to the tenant rather than the landlord in the
action raised by Morrison Sports Ltd, or whether the loss in respect of the
destruction of the building in the action raised by Brian Pitchers was the
reconstructed loss or the contemporaneous valuation; and if the latter whether it included the
value of the site. While all these
matters could have been more satisfactorily specified, I am satisfied that
where appropriate there is sufficient detail to allow the defenders to check
the pursuers' claims; or alternatively
that the areas said to be in dispute can be satisfactorily resolved at
proof. However, I would add that the
defenders' general plea to the relevancy will remain, and if the pursuers
unjustifiably and unreasonably fail to disclose necessary details of their
claims for loss to the defenders in good time, or if the defenders fail to
answer calls properly made, they may find themselves restricted at proof in
what they will be allowed to prove.
[41] In the circumstances I propose to repel the pursuers' second
plea-in-law in the Morrisons Sports Ltd case and the defenders' first
plea-in-law in all three actions, and remit the pleadings as they stand to
proof before answer.
