In the 1930s, there was a growth in consumerism, as a result increasing the awareness of consumer protection by public policies. After Donoghue v Stevenson, the concept of consumer liability arose and became the beginning of the law of negligence. Negligence is the failure to exercise the care that a reasonable man would, and duty of care is an obligation to ensure the safety of others. This essay will start with a summary of Donoghue, followed by the significance and limitations of its decision, and conclude why it is still important.
Significance of Donoghue v Stevenson
Donoghue v Stevenson is a landmark case for the modern law of negligence as it establishes principles which can be used to predict outcomes of novel cases, “freeing the possibility to prove a case only by the dependence on a precedent”. In the case, Mrs Donoghue suffered from gastroenteritis after a decomposed snail emerged from her bottle of ginger beer, and brought a claim against the manufacturer. The courts held that there was a duty of care owed to Mrs Donoghue and the ratio was that duties of care should not only be owed to parties in physical proximity with each other. The decision of Donoghue marks the starting point of a test of when duties of care will arise – the neighbour principle:
“You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who then in law is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”
This leads to Professor Feinman’s definition of negligence, where “people should exercise reasonable care when they act by taking account of the potential harm that they might foreseeably cause to other people.” After Donoghue, the tort of negligence was extended beyond the tortfeasor and the immediately affected party. It rejected the “fallacy” that there was no liability in tort unless there was contractual proof, and established that a claimant could recover damages against a defendant despite not being in privity of contract with one another. For instance, a duty of care is always owed by manufacturers to consumers even though the consumer may not have purchased the product herself as in Donoghue, protecting consumers from buying faulty goods.
The Donoghue decision was applied in Home Office v Dorset Yacht Co in which boys damaged the plaintiff’s yacht and the prison authorities were held liable for not monitoring the actions of the youth offenders. Even though the damage to the yacht was not directly committed by the defendants, they were liable for the failure to control the boys’ behaviour. This post-Donoghue judgment expanded the neighbour principle to impose liability for damage based upon omissions rather than actions, or caused by a third party.
Not only did the Donoghue decision give rise to the concept of duty of care, the neighbour principle also forms a basis for the test of a breach of duty. In Wagon Mound (No.2), the reasonable man test was used to conclude that there was a breach in the duty of care owed by the defendants because they did not take precautions against the foreseeable risk of a fire as a result of oil spillage like reasonable men would. It can be seen that the reasonable man test stems from the neighbour principle based on proximity and foreseeability, in that a reasonable man should be able to identify risks to the people around him as a consequence of his actions and take precautions to mitigate or eliminate the risk.
Limitations of Donoghue v Stevenson
While the neighbour principle plays a significant role in laying a foundation for the duty of care, the general approach that it introduces, which can be applicable for all situations, mostly deals with physical injuries. It fails to offer a feasible approach to predicting the outcomes of cases that fall outside the category of physical injuries, for example in cases of pure economic loss. At the time of Donoghue, these claims were excluded from the law of negligence, and it was not until Hedley Byrne v Heller that there was a recognition of the possibility to recover pure economic loss. The Hedley case involves pure economic loss resulting from a negligent misstatement, and it was held that a duty of care could exist in respect of a statement leading to pure economic loss based on a special relationship between parties, taking into account principles of foreseeability and proximity. However, the key issue leading to the conclusion of this case was the presence of a disclaimer at the top of the reference, which removed the liability of the defendant. On the other hand, Smith v Eric S Bush deemed the liability waiver ineffective as it did not stand up to scrutiny under the Unfair Contract Terms 1977, and extended the liability to proximate third parties by applying the Hedley principle of special relationship. The contrast in these two judgments demonstrate the limitation in the Donoghue decision, that it does not apply to every case and that the neighbour principle “failed to capture something else which was going on in the law of negligence” such as policy concerns.
Another criticism to the neighbour principle is that the term “neighbour” is too broad and can be applied to almost any relationship. This contributes to the floodgate argument which refers to the over-proliferation of claims and the compensation culture in which more victims get compensated than there should be. Hence there have been increasing restrictions to constraint the expansion of liability after Donoghue. In Anns v Merton, Lord Wilberforce realised the inadequacy of the neighbour principle alone in establishing a duty because a failure to comply with the byelaws’ requirements in constructing a building could affect more than the tenants who move in immediately, so the focus was on whether the claims against the Council were statute-barred under the Limitation Act 1939. The test was thus refined to include any substantial policy considerations which might limit the scope of the duty owed, in addition to the principles in Donoghue, known as the Anns’ two-stage test. It was then replaced after Caparo v Dickman in 1990. Lord Bridge reinforced in his speech that proximity and fairness are not precise enough to have utility as practical tests, but it would clearly be unfair for the auditors to owe a duty of care so widely to all purchasers of shares, just as how a bank should not owe a duty to all its lenders relying on their accounts. Subsequently, the threefold Caparo test was developed, taking into consideration foreseeability of the damage, proximity between parties, and fairness for such duty to exist. Nevertheless, despite the refinement of the neighbour principle, the basic principles of proximity and foreseeability set out by Donoghue are still evident in the Caparo test in current use and are not completely abolished. This corresponds to Lord Reid’s speech in Home Office, that Donoghue “may be regarded as a milestone, and the well-known passage in Lord Atkin’s speech should … be regarded as a statement of principle. It is not to be treated as if it were a statutory definition.”
Conclusion
Overall, the decision in Donoghue is still important. It does have flaws in that it does not cover certain areas of the law and that it is too extensive, however as Lord Macmillan stated in Donoghue, “The categories of negligence are never closed.”, suggesting that the law is constantly evolving and no single test is capable of covering every aspect of the law of negligence. Keith Patten also pointed out that “Negligence did not become less expansionist because of the decision in Caparo.”, therefore the importance of Donoghue should not be undermined under these two circumstances. Rather, it is the impact that it had on the modern duty of care that should be emphasised on – setting general principles whereby a party would owe a duty of care to another.