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Tale of the tort minefield that sends us back to the contracts

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legal matters

We have seen recently that, compared with contract law, the law of tort is a bit of a minefield.That is not to say that contractual disputes are free from problems: questions as to whether there was a contract in the first place; if so, what terms were agreed; and then, most interesting of all, what do those terms mean, are literally meat and drink (and the mortgage) to the lawyers. But at least you have a recognisable framework within which to work and can readily identify the gaps that need to be filled.

The law of tort is more a creature of policy and current trends.The starting point is whether a duty of care is owed in the first place.This depends upon identifying who might be described as 'your neighbour', whether you ought not to cause them the loss they have suffered and whether it is 'just and reasonable' that you should be liable to them in all the circumstances.Here the floodgates of the compensation culture run up hard against the breakwater of judicial resistance. The more claimants seek, America-style, to expand the scope of the common law and to cash-in on the consequences, the greater the challenge to the courts to draw the line. Inevitably, well-advised claimants set their sights on those with the deepest pockets. Thus public bodies and substantial corporate entities - or, failing those, anyone with an insurance policy - are fair game.

The recent appeal in the case of Naylor v Payling (Judgment 7.5.04) demonstrates the point admirably.

Payling visited a nightclub owned by Naylor, who employed an independent contractor to supply doormen to provide security at the club.

While such staff may have colourful and varied backgrounds, in this case the local authority ran a security staff accreditation scheme - a sort of 'bouncer's bond'.During the course of Payling's visit he got on the wrong side of one of the doormen, who physically ejected him from the club and caused him severe head injuries as a result. At the trial of Payling's claim, it was accepted that the doorman's conduct breached the established rules of neighbourliness and that he had been negligent.

It transpired, however, that neither the doorman, nor the company that employed him, were worth much and, more importantly, that the security company did not hold any public liability insurance to cover the activities of its employees. In the circumstances the claimant was anxious to pin liability for his injuries on the nightclub owner.Payling sought to push the boundaries of the common law out further and argued that Naylor, as a nightclub owner, owed him, as a visitor, a duty to ensure that any security company he used was insured against this kind of incident. The trial judge held that Naylor did owe such a duty to Payling and was accordingly liable for his losses.

Naylor appealed this ruling. The Court of Appeal urged the parties to take a step back and take a hard look at two basic questions: what was the nature of the duty owed by Naylor to Payling; and was that duty breached?

The court explained that Naylor owed visitors to his club a duty to take reasonable steps to ensure their safety and no more - that duty did not extend to being insured or to having sufficient assets to meet any liability that might arise. Special circumstances, or statutory regulations, were required before the law would cast a free-standing duty on employers to satisfy themselves that independent contracts had insurance cover.

The circumstances of this case were not special. Rottweileresque they may be, but the job of a doorman is not classified as a hazardous activity by the law.The local authority had accredited the security firm and its employees had performed satisfactorily for 18 months.

The themes underlying this case will be familiar to those who operate in a construction context with its many layers of service provision. The difference is that the provision of construction services, and the insurance status of those who provide them, usually is regulated - either by statute or, more commonly, by contract.

You see, back to contracts again.

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