CHAPTER 1

NATURE AND FUNCTION OF TORTIOUS LIABILITY

Tortious liability: If someone is responsible in tort, he must compensate.

The law of tort is concerned with providing a remedy to those who have been harmed
by the conduct of others.

Ex: Compensation for accidents or for personal injuries.

COMPENSATION

Compensation also known as damages is a form of monetary payment. Damages is

usually granted either by:

1. An equivalent for what has been lost;

2. A substitute for what has been lost.

Ex: A drives negligently and causes a collision in which B is seriously injured

and his car destroyed. Damages may be awarded to B to cover:

(a) The cost of purchasing an equivalent replacement car.

(b) Any expenses he incurred (loss of earning, medical expenses)

(c) As a substitute for things ha has lost which cannot be replaced ( pain and
suffering, loss of amenity)

OBJECTIVES OF THE LAW OF TORT

1. To compensate wrong doings.

2. To encourage higher standards of safety.

3. To deter the occurrence of future harm.

4. As a punitive mechanism.

LOST PREVENTION

Sometimes the claimant / plaintiff will also seek an injunction to damages.

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 An injunction is an order of the court preventing the occurrence of future harm.

DETERRENCE

One of the functions of the tort law is to deter certain conduct that would lead to
tortious liability.

However, this argument has been criticised:

1. It is difficult to deter negligence when the defendant himself is unaware of the

time that he is making a mistake.

2. For instance, since it is the insurer and not the defendant who pays the
damages, damages do not deter conducts leading to tortious liability.

RETRIBUTIVE / PUNITIVE SYSTEM OF TORT LAW

The tort system can be seen as a mechanism for retribution against the wrong doer. In
such a case exemplary / punitive damages are awarded.

According to Lord Devlin, tort law can be viewed as a deterrent to the abuse of power
by public officials or as preventing the defendant’s unjust enrichments at the
claimant’s expense.

It has also been suggested that the tort system provides the claimant with a means
whereby he can derive satisfaction from having his grievance publicly aired and the
defendant pictured in the wrong.

LAW OF TORT AND CONTRACT LAW

Under contract law, usually the defendant will be liable for breach of contract.

For tort law, the defendant will be liable when he has breached a tortious duty
(Ex: accident).

The case of Henderson V Merrett Syndicates Ltd, shows the existence of the principle
of concurrent liability. This means that it is possible for a person to owe a tortious
duty irrespective of whether a contract exists between the parties.

Henderson V Merrett Syndicates Ltd

Lloyd’s of London, an insurance market, is organised in syndicates – groups who

share the business, risk and reward, of underwriting insurance policies and similar
projects. The syndicate acts as a market which offer insurance on the other hand and
investment opportunity on the other. The active business of a syndicate is run by
underwriting agents. The liability of an investor (known as a name) is unlimited-
names share the profits but are also exposed to unlimited liability in the event of

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losses.

In the present case, hurricanes in America had led to unprecedented losses for
insurers. After the hurricanes, Lloyd’s called upon the investors to cover their share of
losses. Litigation followed in which names sued the people running the underwriting
agents for negligent management of the investment fund. Mr Henderson was one of
the names and Merrett SyndicatesLtd was one of the underwriting agents.

It was accepted that the underwriting agents had a duty to exercise due care and skill.
The question was whether the agents could be liable to the indirect investors (the
names behind in the syndicate which had formed another syndicate). The problem was
that there was a contractual relationship between the head syndicate managers and its
direct members but not necessarily a contractual relationship between the head
syndicate managers and the members of the sub-syndicate. This led to the question of
whether a duty could arise in tort, raising the matter of “assumption of responsibility”.

Held: It was held that Merrett Syndicates Ltd was liable to both types of shareholders,
as there was enough foreseeability to extend pure economic loss liability to “un-
proximate” third parties. The major significance here was, however, the allowance of
claims in both contract and tort, which blurred the divide between the two. Some of
the first party ‘names’ claimed in tort to overcome the three-year limit in which an
action must be taken in contract. In allowing such an action, the House of Lords
overruled Lord Scarman’s ruling in Tai Hing Cotton Mill Ltd V Liu Chong Hing
Bank Ltd (1986), in which it was held that there is nothing advantageous to the law’s
development in searching for a liability in tort where the parties are in a contractual
relationship. The allowance of concurrent actions was immensely controversial, as it
ran contrary to legal orthodoxy.

CRITICISM OF THE TORT SYSTEM

1. Delay

2. Expense

TORTIOUS LIABILITY

Every tort has particular elements which must be present in order for a claim to
succeed. Tort is a fault based system.

JOINT AND SEVERAL TORTFEASORS

If injury results from a single act caused by more than one person, those responsible
are called joint tortfeasors.

If injury results from the combine effect of two or persons acting independently, those
responsible are called several tortfeasors.

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The difference between joint and several tortfeasors is: if a joint tortfeasor is released
from liability, the other tortfeasor will be released. However, the release of one of the
several tortfeasors will not release the other tortfeasors from liability.

CONTRIBUTION BETWEEN TORTFEASORS

If two or more persons are liable to the claimant for some damage, anyone of those
persons can be liable for the full lost even though his contribution to the damage was
significantly smaller than that made by others.

In such a case, that person can seek a contribution from the other tortfeasors under the
Civil Liability (Contribution) Act 1978.

The Act provides that the amount of contribution to be made by a tortfeasor is such as
may be found by the court to be just and equitable having regard to the extent of that
person’s responsibility for the damage in question. However, if the defendant from
whom contributions claimed has limited his liability, the amount which can be
claimed from him in contribution proceedings cannot exceed what he would have
been liable to pay to the claimant.

VICARIOUS LIABILITY

This occurs when an employer is liable for torts committed by his employee in the
course of the employee’s employment. The employee must not be an independent
contractor as he must be employed under a contract of service. Usually, the employee
will perform an authorised act in an unauthorised manner. However, if the employee
performs an act which is wholly unconnected with what he is employed to do, then
the employer will not be liable for his tort. Vicarious liability is not a defence for the
employee as both the employer and the employee will be jointly liable.

HUMAN RIGHTS

By becoming a member of the EU, UK enacted the Human Rights Act 1998 which
incorporates the European Convention on Human Rights (ECHR).

Section 6(1) of the Human Rights Act provides that it is unlawful for a public
authority to act in a way which is incompatible with a Convention rights and damages
may be awarded for such convention.

Article 8 ECHR Provides for the right to respect to private family rights.

Article 10 ECHR Provides for the right to freedom of expression.

Article 5 ECHR Provides for the right to liberty.

Article 6 ECHR Provides for the right to a fair hearing.