As a landmark case in English tort law, Donoghue v Stevenson [1932] AC 562 established certain principles still applicable in courts today – Lord Atkin’s ‘neighbour principle’, that is, the idea that one ought to avoid ‘acts or omissions which you can reasonably foresee would be likely to injure your neighbour’, is perhaps the foundation upon which liability for negligence is based. However, Conaghan and Mansell label his statement ‘extraordinarily empty’, and too broad to provide a comprehensive framework for judges to abide by, giving rise to what Tony Weir described as ‘the staggering march of negligence’. Due to this there have been several reformulations of the reasoning used in Donoghue v Stevenson so as to achieve a more coherent method of deciding where a duty of care is owed and what actions can be classed as a breach of said duty.
In the case itself, the appellant, Donoghue, drank from a bottle of ginger beer manufactured by Stevenson, the defendant. Unbeknownst to her, the dark glass of the bottle obscured the remains of a decomposing snail, which caused her to suffer ‘severe gastroenteritis’. Mrs Donoghue had to sue the manufacturer of the ginger beer rather than the café owner for selling it, as she had not bought it herself, meaning there was no contract in place. The argument put forth by the claimant alleged that Stevenson had been negligent in producing the drink and that she was owed a duty of care. The House of Lords had to decide whether there was a sufficient legal relationship between the manufacturer of a product and its consumer, as prior to the case such a relationship only existed outside of a contract when the product was inherently dangerous. It was held by a 3:2 majority that she was entitled to succeed in a claim for damages. While Lord Atkin’s principle remains the most renowned dictum of the case, Lord Macmillan’s position that “the law concerns itself with carelessness only where there is a duty to take care and where failure in that duty has caused damage” provided a framework to ground Atkin’s argument . Macmillan also noted that ‘the categories of negligence are never closed’, pre-empting attempts to create exhaustive lists of negligent and non-negligent acts. After establishing that ‘you must not injure your neighbour’, Atkin then sought to set out ‘who, then in law, is my neighbour’, arriving at the conclusion that it is anyone ‘closely and directly affected by my act that I ought reasonably to have them in contemplation’.
This statement (and the decision of Donoghue v Stevenson as a whole) hinged upon the harm caused to being reasonably foreseeable, there being a relationship of proximity between the defendant and claimant, and finally for there to be a morally sound reason to hold the defendant liable. While only loosely set out by Atkin, these three tests were more clearly crystallised by Caparo Industries plc v Dickman . In this case, the claimants sought to takeover Fidelity plc by buying up shares. The company had been underperforming, yet Caparo Industries still saw it as a viable investment due to audits undertaken by the defendant, Dickman. After gaining control, Caparo realised that the finances were even worse than suggested by the audit, and sued Dickman for negligence, arguing that they had a duty of care to accurately report finances. It was held that Dickman did not have a duty of care to Caparo Industries. Using the three-stage test, it would certainly be reasonably foreseeable that a failure to report finances would financially harm shareholders, though as Markesinis and Deakin note ‘it is no longer sufficient… to establish a prima facie duty of care by referencing simply to foreseeability of harm’. The defence argued that in addition to the foreseeability, the Companies Act 1985 mandated that auditors have ‘a duty to report carefully’ to shareholders, and that this satisfied the requisite proximity. However, Section 237 of the Companies Act, which establishes the role of an auditor, makes no reference to auditors assisting shareholders in the making of decisions as to future investment in the company, only to helping them ‘exercise their class rights in general meeting’. The decision made in this case arguably narrows the liability allowed by Atkin, as the claimant must put forth policy reasons when arguing liability.
This narrowing can also be seen in the courts’ rejection of the ‘Ann’s Test’, established in Anns v Merton London Borough Council, in which Lord Wilberforce (using the precedent set in Donoghue) argued that for there to be a duty of care there must only be a ‘sufficient relationship of proximity based upon foreseeability’, and a reason not to impose a duty of care. The case found a local council breached its duty of care to tenants of housing as they had negligently allowed the buildings to be erected on inadequate foundations. After time these foundations caused cracks in the walls and other defects, and the tenants sued the council for negligence. While no physical damage was caused, Wilberforce’s two criteria were matched, greatly expanding and reaffirming the importance of the neighbourhood principle. Donoghue was not the only case considered by the House in deciding on Anns, the two other cases followed it both chronologically and in its guiding principle (Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd, and Dorset Yacht Co. Ltd. v. Home Office). The courts’ expansion of liability can certainly be seen to have arisen from the decision made in Donoghue v Stevenson. However, a mere 13 years later the case was overruled by Murphy v Brentwood DC , undermining the importance Anns seemed to grant Lord Atkin’s ruling.
There are certain key areas that remain unaddressed by the decision in Donoghue v Stevenson, such as the kinds of damage one has a duty of care not to cause, one being pure economic loss. In Murphy v Brentwood DC, a local authority again failed to inspect the foundations of a building adequately leading to instability, with the claimant unable to raise money for repairs having to sell the house at a loss of £35,000. This action failed due to the loss being purely economic. The House of Lords ruled that ‘while the principle in Donoghue v. Stevenson applied to impose a duty on the builder of a house to take reasonable care to avoid injury or damage’, the lack of physical harm prevented the claimant from being owed a duty of care. In explicitly mentioning Donoghue v Stevenson’s shortcomings in regards to kinds of damage, the House of Lords both affirmed and undermined the case’s importance – recognising that the fundamental principle of avoiding causing injury is key to deciding negligence cases, but also being aware of needing to distinguish between physical injury and economic loss.
It is demonstrable that the decision made in Donoghue v Stevenson, to allow a third party to sue for negligence, is still valid today and makes up a fundamental part of the Common Law system. Had the House of Lords not granted Donoghue the right to appeal then the resulting precedent would quash many of the principles taken for granted today. However, the route taken to reach the decision, namely Atkin’s incredibly broad criteria for establishing duty of care, has been proven to be inadequate taken on its own. The various precedents set since Donoghue v Stevenson have certainly rolled back the scope of liability from the ‘ocean of liability for carelessly causing foreseeable harm, dotted with islands of non-liability, rather than as a crowded archipelago of individual duty situations’. Cases such as Caparo v Dickman build upon the precedent set in 1932 by providing clearer frameworks regarding what constitutes a duty of care. In addition to this, there are principles not necessarily in conflict with Donoghue v Stevenson such as there being no duty of care concerning pure economic loss, but the original case certainly has a diminished importance in deciding on such matters. To conclude, Donoghue v Stevenson arguably remains one of the most important rulings in tort regarding duty of care, as Atkin’s principle can be seen to have inspired a large portion of subsequent dicta and judgements, and provides the very foundation on which the tort of negligence rests.