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Clarifying Local Authorities’ duties to prevent economic loss

Michael Kent QC and Steven Snowden have been successful in the Court of Appeal for the appellant local authority in the case of Glaister v Appleby-in-Westmorland Town Council, in which judgment was handed down yesterday (9.12.09).

In June 2004 Mr Glaister and his family attended the Appleby Horse Fair. He suffered serious head injuries when he was kicked by a runaway horse and his family suffered psychiatric injuries from witnessing the incident. Appleby Fair is a week-long gathering of gypsies and travellers, primarily for the purpose of buying and selling horses, which has occurred for centuries. A number of the gypsies camped on a small piece of land outside Appleby (known as Fair Hill) which was owned by the Town Council and there was a tradition of washing the horses in the river in the town, but the greater part of the activities occurred on other land, some of which was leased by the gypsies from local farmers for the duration of the Fair. Most of the showing of horses, which involved them being raced, took place up and down the public highway (for which the Town Council was not the Highway Authority) and Mr Glaister was stood on the verge watching this when his accident occurred. He was unable to identify whose horse it was, where it had come from or how it had come to be free.

He brought a claim against the Town Council on the basis that it owed him a duty and was in breach because it stood to gain from the Fair, it was aware of dangers inherent in the activities of the Fair, it participated in an informal group of concerned authorities and agencies which sought to minimise the disruption of the Fair, it ought to have used the “lever” of refusing access of Fair Hill to force the other agencies together to exercise more control and direction over the Fair, and it ought to have ensured that participants in the Fair had insurance so that claims such as the claimants’ would be met.

Despite this being a novel extension of the duty to prevent what was in the circumstances a pure economic loss (albeit one loosely associated with a personal injuries claim), the Recorder at first instance found for the claimants.

The Court of Appeal (Lord Neuberger MR, Toulson and Jacob LJJ) accepted the appellant’s case that no duty was owed by the Town Council in the circumstances. The leading judgment from Toulson LJ held that the scope of the Council’s duty did not extend to segregating spectators from horses, or ensuring that others did so. Moreover there was no basis for finding that any special relationship existed such as would have been required to make the Council liable to the claimant for failing to prevent harm by others. He clearly expressed the view that it would be wrong to make the Council responsible to the claimants merely because it advertised the event or encouraged attendance at it, referring to the risk that there would be an “impoverishment of our community life” if bodies or individuals were to be deterred by the risk of being held liable in such circumstances. He stated that the law should develop incrementally, by analogy with existing duty situations, and that consideration of what was “fair, just and reasonable” was not of itself sufficient to identify whether a duty of care should exist in a given situation. Some form of “special duty” or “special relationship” was required to give rise to a duty in cases of pure economic loss. The Court endorsed the views of Sedley LJ in the earlier case of Gwilliam v West Herts Hospitals NHS Trust.

The case is interesting as a check on the tendency to find some way to give compensation to an innocent injured party, and as a clear re-statement of the principles relevant to claims for pure economic loss.

Michael Kent QC and Steven Snowden were instructed by Crutes LLP of Newcastle.

A copy of the judgment is available here.

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