Has the Law Remained True to the Neighbour?

“Donoghue v. Stevenson [1] is a remarkable example of common law judges at work, distinguishing, over-ruling, criticising and explaining hundreds of decisions extending over a century before arriving at an obvious principle of liability for negligence.” [2] This is how John O’Connor blandly epitomises the precedential decision made in Donoghue v. Stevenson [3] in his article in The Irish Jurist. However tasteless this description may seem I am inclined to believe that this perfectly evokes the true nature of the decision as is obvious to us now. Lord Atkin’s leading judgement in this case created the now fundamental aspect of negligence law, the “neighbour principle” which derived from the Christian principle “love thy neighbour”. O’Connor perfectly describes this principle as obvious because today it is the most basic principle used in duty of care or negligence cases. However it was a ground-breaking decision when it was made in 1932.

According to Eoin Quill in his book, Torts in Ireland [4] the first case reporting to have approved Lord Atkin’s neighbour principle in Ireland was Kirby v. Burke & Holloway [5] . In this case Gavan Duffy J. accepted the neighbour principle put forward by Lord Atkin in Donoghue v. Stevenson [6] because it was similar in rationale to Oliver Wendell Holmes Jr.’s reasonable person test. Holmes’ reasonable person test makes the point that a reasonable person will take the following factors into account before acting: (i) compare the foreseeable risk of harm his actions may have to the practicality of the actions (ii) the scope of the risk created by the actions (iii) the possibility the risk created by the action will cause harm to others (iv) any other options that may create a lesser risk, and the cost of taking such options.

Another leading Irish case involving Lord Atkin’s “neighbour principle” is Ward v. McMaster [7] in 1986. The issues at hand in this case were whether the plaintiffs, who bought a defective bungalow, were entitled to damages against the builder, the housing authority who financed the purchase and the firm of auctioneers who inspected the house before it was purchased. Costello J. found in favour of the plaintiffs basing some of his judgement solely on the judgement made in Donoghue v. Stevenson [8] . The learned trial judge says in his judgement that a builder owes a duty of care based on the principle in Donoghue v. Stevenson [9] which includes hidden defects contained in the dwelling and any consequential loss from the purchase of such a dwelling. Costello J. also stated that the “neighbour principle” also applies during the execution of statutory functions provided there is a relationship of close proximity between the parties. Fifty-four years after the decision made in Donoghue v. Stevenson [10] the Irish Supreme Court still remained true to Lord Atkin’s neighbour principle which shows the principle’s fundamentality in tort law.

Home Office v. Dorset Yacht Co. Ltd [11] is a leading English case on duty of care and negligence and heavily involves the neighbour principle. The Court of Appeal found in favour of the Home Office stating that it should not be liable for the actions of the youth offenders. Lord Denning stated in his judgement that there was no precedent for liability incurred because of damage done by escaped prisoners. However, the House of Lords overturned the Court of Appeal’s decision. Lord Reid stood true to Lord Atkin’s neighbour principle and applied the principle in his judgement. In his judgement he stated that the taking of the yacht by the borstal trainees whilst under minimal supervision of the officers was reasonably foreseeable. He made the decision, based on the neighbour principle, that the officers prima facie owed a duty of care to the owners of the yacht which was damaged by the borstal trainees whilst under the officer’s supervision. Lord Reid then went on to confirm the importance of the Lord Atkin’s judgement; “Donoghue v. Stevenson [12] may be regarded as a milestone, and the well-known passage in Lord Atkin’s speech should I think be regarded as a statement of principle…I think the time has come when we can and should say that it ought to apply unless there is some justification or valid explanation for its exclusion.” Here we can see that almost forty years after Donoghue v. Stevenson [13] the details of the judgement were still as relevant as ever and the English courts are very unwilling to veer away from the precedent it set.

In Stanton’s book The Modern Law of Tort [14] the author evokes the opinion that Donoghue v. Stevenson [15] is the “most important tort case decided in the twentieth century”. Stanton introduces the view that because Lord Atkin fabricated the neighbour principle from a moralist’s point of view it became the perfect basis for developing the tort of negligence in common law. Stanton also mentions in his book that by 1980 “the neighbour principle had been recognised as a general principle of tort liability”. This statement clearly illustrates that the neighbour principle is a fundamental part of the tort of negligence and the law has stayed true to Lord Atkin’s judgement decades after it was made. I am inclined to agree with Stanton’s views about the residual effect of the creation of the neighbour principle. It has indeed expanded the scope of negligent liability into other areas of tort such as economic loss. This is evident in the English case, Lennon v. Commissioner of Police of the Metropolis [16] where, on transferring to a different police force, the plaintiff was assured by a personnel executive officer of the defendant that he would not lose his entitlement to housing allowance if he were to take time off before the transfer. When the plaintiff’s service under the police force of the defendant ceased the plaintiff took what he thought to be unpaid leave. However it turned out to be a break in his continuity of service hence losing his entitlement to housing allowance for all time. The court held that the plaintiff owed the defendant a duty of care for the economic loss incurred. The plaintiff was awarded the sum of £43,810 in damages. The defendant appealed this decision however the appeal was dismissed thus enforcing Lord Atkin’s neighbour principle in the tort of economic loss.

Frank Martin and Ubaldus De Vries’s article Leading Cases of the Twentieth Century: A Commentary” [17] provides some very interesting academic observations on Donoghue v. Stevenson. The article mentions that the case has shaped our beliefs as to who the onus lies on for the burden of duty of care in negligence cases at common law. Comparing the views expressed in this article with the opinions conveyed in Stanton’s The Modern Law of Tort we are led to a similar conclusion that the neighbour principle has expanded to include all types of negligence cases from personal injury to economic loss. Martin and De Vries also support the views expressed by Steve Hedley, a legal scholar from Cambridge in his paper “M’Allister (or Donoghue) (Pauper) v.Stevenson[1932] AC 562″ [18] where he states that the neighbour principle “establishes a baseline of liability, that we expect those who can foresee harm to others to take reasonable steps to avoid it—whoever they are, and whoever the others are”.

Aside from the fact that Donoghue v. Stevenson [19] established a now fundamental principle of the tort of negligence the beauty of the decision in the case is that it created a basis for development of this principle. This issue is brought to light in the English case Anns v. Merton London Borough Council [20] where a test for determining whether a duty of care existed was developed called the “Anns Test” or the “Two-Stage Test”. This test was developed by Lord Wilberforce. The first stage of the test is to establish whether there is “a sufficient relationship of proximity based upon foreseeability” which is basically Lord Atkin’s neighbour principle. The second stage of the test is to consider the reasons why there should not be a duty of care. Lord Wilberforce developed this test based on two points of the facts of the case. The first point was whether the local council owed any duty of care to inspect the houses of owners or tenants during the building process. The second point by which Lord Wilberforce developed the Anns test was what period of limitation was applicable to claims by owners or tenants of such houses against the local council. Lord Wilberforce went on to conclude that on the basis that the duty of care did exist and was owed to the owners and tenants of the houses.

I am inclined to agree with the view expressed by Eoin Quill in his book, Torts in Ireland [21] , that, not disregarding its importance as a fundamental principle of negligence, the neighbour principle should not be used specifically as a “test” for negligence but should be used as a basis for developing a fair judgement based on the facts of the case. To call it a test would suggest opting for a rigid approach towards applying the principle however this approach could not be suitable for every case. Similar to the Anns [22] case, the judgement in Glencar Explorations plc and Andaman Resources plc v. Mayo County Council [23] was an enhancement of the fundamental neighbour principle approach. In Glencar [24] the Irish Supreme Court went one step further than the judgement of the Anns [25] case and developed a three step test to establish whether a duty of care existed in the circumstances of the case. The first step is to establish whether there is a sufficiently proximate relationship between the parties. The second step is to determine whether the harm to the plaintiff is reasonably foreseeable by the defendant. The final step is to verify that the enforcement of the duty is fair, just and reasonable in the situation. As Anna Louise Hinds states in her article The Duty of Care in Irish Tort Law [26] the decision made in the Glencar [27] case is in line with the approach favoured by the English courts such as the judgement in the Anns [28] case.

The English case Hedley Byrne & Co Ltd v. Heller & Partners Ltd [29] marked the neighbour principle’s arrival into another area of tort law, namely economic loss and thus another enhancement of the basic neighbour principle. The Hedley Byrne [30] case established, in English law, that a duty of care will exist where there is a “special relationship” between the parties. In this case the court found, by using the neighbour principle, that there was sufficient proximity between the parties to impose a duty of care upon the defendant. This duty of care consequently arose to the creation of a “special relationship” between the defendant and plaintiff in which the defendant had to be cautious in giving advice to the plaintiff in case so as to steer clear of negligent liability. The augmentation of the neighbour principle taken in the Hedley Byrne [31] case became known simply as the Hedley Byrne principle. The Hedley Byrne principle was approved by the President of the High Court, Cahir Davitt in Trust Ltd v. Hugh Moore & Alexander Ltd [32] in 1964. The Hedley Byrne principle was applied in this case where the relationship between a limited company and its shareholders was deemed to be of sufficient proximity thus establishing a duty if care regarding documents detailing shareholders interests in the shares. The Hedley Byrne principle has been considered in a number of ensuing cases such as Bank of Ireland v. Smith [33] and McAnarney v. Hanrahan [34] .

The more recent English case Caparo Industries plc v. Dickman [35] is now a leading duty of care case. The case brought to light a new development on Lord Atkin’s neighbour principle. In this case the House of Lords pioneered a more restricted approach to imposing a duty of care with regard to negligent misstatements. The House of Lords developed a “three-fold test” in this case to determine whether or not a duty of care should be imposed. The first step in the test is the risk must be a result which is reasonably foreseeable because of the defendant’s conduct. The second step in the test is that a relationship of proximity must exist between the defendant and the plaintiff. The final step in the test is that it must be fair, just and reasonable to impose liability on the defendant in the circumstances of the facts of the case. In Vivienne Harpwood’s book, Modern Tort Law [36] she includes a fantastic quote from Lord Roskill in the Caparo [37] case. On explaining the issue of the court’s standing on the issue of negligence he said “there is no simple formula or touchstone to which recourse can be had in order to provide in every case a ready answer to the question whether, given certain facts, the law will or will not impose liability for negligence or, in cases where such liability can be shown to exist, determine the extent of that liability”. [38] In essence Lord Roskill was saying that the courts should rely on the neighbour principle, the Hedley Byrne principle, the Anns test as a basis for developing a fair and reasonable judgement based on these precedents but also on the facts of the cases at hand.

In Yuen Kun Yeu v. Attorney General of Hong Kong [39] Lord Keith stated that proximity is basically a synonym for forseeability in duty of care cases. Lord Keith’s sentiments were reiterated in Margereson v. JW Roberts Ltd, Hancock v. Same [40] where the court held that the defendants, owners of an asbestos factory, ought to have reasonably foreseen that the local children in the area who played close to the factory may be at risk, in later life, to developing pulmonary injuries because of the dust contamination from the factory. The court relied on a similar reason as outlined by Lord Keith in the Yuen Kun Yeu [41] case mentioned above to make the decision in this case. Basically, they used a variation of Lord Atkin’s neighbour principle to make the judgement where proximity constituted a sufficient relationship between the parties for there to a duty of care. Reasonable foreseeability does not always have to apply where the neighbour principle applies. In Grant v. Austraillian Knitting Mills [42] the plaintiff contracted dermatitis which was brought on by a chemical used in the factory to produce woolly under-garments. The Court held that the defendant owed a duty of care to the plaintiff even though the dermatitis he suffered from was an extremely rare illness in which there was only one complaint of in 5 million.

The neighbour principle developed in the ground-breaking case Donoghue v. Stevenson [43] is not always used as a device finding in favour of the plaintiff. Many cases are dismissed because of the precedent set in that case. One such case is Hay or Bourhill v. Young [44] where a pregnant woman who witnessed the aftermath of a fatal motorcycle incident in which John Young, the defendant, was killed, claimed that on seeing the blood on the ground after the accident wrenched and injured her back in the process. She also claimed that she was thrown into a state of terror and sustained a severe shock to her nervous system. Also at the time of the incident, she was pregnant and five weeks later she gave birth to a child was still born as a result of the injuries she supposedly sustained at the time of the accident. The House of Lords held that the late defendant was not under any duty of care to the plaintiff in driving at an excessive speed on the motorcycle and colliding with a car as her injuries were not a foreseeable result of the accident and could not have been reasonably anticipated. The House of Lords consequently dismissed her appeal.

In Barbara Harvey and John Marston’s book, Cases and Commentary on Tort [45] the authors make an interesting point when providing commentary on Marc Rich & Co AG and Others v. Bishop Rock Marine Co Ltd and Others, The Nicholas H [46] that in this area (negligence) the common law develops increasingly by considering previous cases where a duty has been recognised. The authors mention that no cases provide a realistic precedent for this case. The authors then go on to mention that the case at hand could only be decided by a concentrated focus on all the particular features and then applying already established legal principles to the facts of the case at hand. Harvey and Marston talk about how counsel in this case took the House of Lords through some landmark cases of common law such as Donoghue v. Stevenson [47] and outlined the applicable principles from that case which can be easily identified and do not require any further examination. Evidently this shows that the neighbour principle as cited by Lord Atkin is a fundamental aspect of negligence cases and the law today remains as true as it ever did to this principle.

Chapter four of Vivienne Harpwood’s book Modern Tort Law [48] provides an interesting insight into the impact of Lord Atkin’s judgement in Donoghue v. Stevenson [49] in regard to duty of care in psychiatric injury cases. Amongst the first nervous shock cases were Dulieu v. White [50] and Hambrook v. Stokes [51] . These cases made the notion of nervous shock more acceptable for solicitors and more nervous shock claims began to show up in the courts. The judgement made in Donoghue v. Stevenson [52] then brought in new limitations which were based on the ideas of foresight and proximity. This led to theories being developed for the regulation of nervous shock cases. The first of these theories was the “impact theory”. The impact theory outlined that damages should only be awarded to the claimant if they were in the foreseeable area of impact at the time the incident, which supposedly caused them nervous shock, happened. The other theory which stemmed from the limitations set out by Donoghue v. Stevenson [53] as regards to nervous shock claims was the “area of shock” theory which outlined that even if the claimant happens to be outside the area of foreseeable impact, the claimant may still be able to file a claim if they were inside the foreseeable area of shock. This theory was used in cases such as Hay or Bourhill v. Young [54] and Brice v. Brown [55]. Alcock v. Chief Constable of South Yorkshire [56] also provides an interesting insight into the effect the neighbour principle had with regard to duty of care in psychiatric injury cases. In this case, the House of Lords mulled over 10 nervous shock claims of family members of some of the fatalities of the Hillsborough football stadium catastrophe. The police in this case admitted to negligence for allowing too many people enter the stadium in which 95 people lost their lives on the 15th of April 1989. The House of Lords rejected all 10 claims basing their judgement loosely on Lord Atkin’s neighbour principle. The House of Lords stated that there were three relevant factors to determine whether a duty of care exists in a claim for psychiatric injury. The first factor to be considered was the proximity of the person space and time-wise to the scene of the incident. The second factor to be considered is the relationship between the claimant and the victim of the incident. The final factor to be considered, according to the House of Lords, is the manner in which the shock has been caused.

The landmark development of the neighbour principle in Donoghue v. Stevenson [57] by Lord Atkin is also a very important aspect as regards to the test for breach of duty of care in negligence. This issue arose in The Wagon Mound No. 2 [58] . In this case the defendant’s ship, The Wagon Mound, was moored at a dock close to two ships owned by the plaintiff. The Wagon Mound leaked oil into the harbour which was in turn ignited by some sparks which came from a welding machine, hence destroying the three ships moored at the dock. The Judicial Committee of the Privy Council held that a reasonable person who was in the position of the engineer of The Wagon Mound ship ought to have been aware of such a risk. The Council held that a reasonable person would only have neglected to have assessed such a risk if they had some reason to do so. The reasonable person test used in this case stems from the original neighbour principle developed by Lord Atkin based on the two points; proximity and foreseeability.