Dear Colleagues;
Interested in what people think of the decision in Trent Strategic Health Authority (Respondents) v Jain and another (Appellants) [2009] UKHL 4 http://www.publications.parliament.uk/pa/ld200809/ldjudgmt/jd090121/trent-1.htm . The Appellate Committee of the House of Lords unanimously holds that a public authority which carelessly applied for, and obtained, an ex parte order closing down a nursing home run by the respondents (resulting in a loss of the business despite the fact that a later review showed that the immediate closure had been completely unnecessary), owed no duty of care in negligence for the economic loss.
Two streams of authority are used to support the decision by Lord Scott, who gives the main judgement. One, those cases rejecting a duty owed to the "subjects of investigation" by statutory bodies charged with protecting the interests of members of the public (while it is not cited, Sullivan v Moody in Australia is this type of case). Here the powers to close down nursing homes were given for the purposes of protection of the residents, not protection of the proprietors. (While this claim was not based on an allegation of "breach of statutory duty", there was a similar result in an Australian BSD claim in Saitta v Commonwealth [2003] VSC 346, where it was held that the duty of the Commonwealth to pay benefits to nursing homes was one that was designed for the benefit of the residents, not (as alleged in that case) the benefit of one of the private contractors engaged to run the home.)
The second line of cases are those where one party involved in litigation, or potential litigation, is said not to have a common law duty of care to their adversary (or potential adversary?) Since the statute gave a power to the authority to effectively "prosecute", these cases no duty was owed. Customs & Excise Commissioners v Barclays Bank plc [2006] UKHL 28; [2007] 1 AC 181 is cited for this "litigation adversarial immunity" proposition. I wonder whether this is a genuinely valid principle, especially where the resources of a large government department are on one side, versus a small business operator. Still, it was used to support the no-duty finding here.
Another interesting aspect of the decision is the way the Human Rights Act is invoked. Most of their Lordships offer the view that if the litigation had been commenced after 2 October 2000 that the plaintiffs would have been able to recover damages under that Act for breach of a Convention right. Lord Scott in particular develops this argument in great detail. But the fact that there is a Convention right seems to be used at [11] as a reason not to develop the common law duty of care to provide a remedy in a case of fairly clear injustice and abuse of power. (UK colleagues can help me here- there seems to be a hint in para [19] that if the Jains fail in the UK, they will still be able to approach the ECHR in Strasbourg for a remedy in relation to the pre-2000 breach. Is that right? If so then clearly the many things that are said by Lord Scott about how the actions of the authority breached the Convention are no doubt meant as "guidance" for the ECHR to award them some damages against the UK government?)
I can see the arguments either way here on the duty issue. But for those of us in non-Convention common law jurisdictions the guidance on duty of care offered by the House of Lords must be taken with increasingly large grains of salt if duty of care decisions are to be stifled by reference to the Convention.
Regards
Neil F
Neil Foster
Senior Lecturer, LLB Program Convenor
Newcastle Law School
Faculty of Business & Law
MC158, McMullin Building
University of Newcastle
Callaghan NSW 2308
AUSTRALIA
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