HL Deb 01 May 1969 vol 301 cc996-1011

5.54 p.m.


My Lords, I beg to move that this Bill be now read a second time. This Bill is presented as a modest but useful measure of law reform in the field of employers' liability. The Bill has the approval of Her Majesty's Government. It has passed through another place, where the principle which it embodies was accepted on almost every hand.

The Bill is concerned with the regulation of liability at Common Law when an employee is accidentally injured because of a defect in a tool or other equipment with which he has been issued to do his job. There is already, of course, a good deal of law dealing with this situation. The Factories Acts contain a statutory code for the use of industrial machinery, plant and equipment under which the employer may be liable if he does not see that the rules are followed. And if the defect in the tool was caused by the negligence of the employer or his servants, or they knew of its existence but did nothing about it, the employer will be liable in damages at Common Law to the injured employee.

But there is a certain class of cases where the defect in the equipment which caused the accident was created before it ever came into the hands of the employer, and where it could not have been discovered by any inspection which he could reasonably have been expected to make: in other words, the employer has not, by himself or his servants or agents, been negligent in any way. In these cases, the injured employee has of course, as he always has, a full right to sue the person who made the tool negligently or whose negligence, by whatever means, actually created the defect which led to the accident. This erring third party may be difficult to identify, and when identified he may be abroad, bankrupt or otherwise difficult to sue. So the question has naturally arisen whether the employer, who after all is the person who actually bought the equipment and provided it to the employee, and who has wide responsibilities for his safety, can be jointly liable with the erring third party.

Until about ten years ago, there was not very much authority in England and Wales on the position in cases of this sort, though there was in Scotland, as I have no doubt the noble and learned Lord the Lord Advocate will be able to tell the House. In 1959, however, the question came before your Lordships' House in the well-known case of Davie v. New Merton Board Mills. What happened in that case was that a workman, in the course of his duty, was using a tool called a "drift" which was used and hammered rather like a chisel. The drift had been supplied to the employer by reputable suppliers as part of a regular course of bulk supply, and the employer's staff had given it a cursory inspection, which was all that could reasonably be expected. Nothing appeared to be wrong with the drift, but in fact the metal of which it was made was too brittle, owing to the negligence of its manufacturers. When the employee hammered the drift, it broke; and a piece flew into his eye, seriously injuring it. Your Lordships held that although the negligent manufacturer was liable, the employer was not.

It is not perhaps for a lay Member of this House to pontificate on matters involving intricate interpretations of the Common Law. But it seems clear that the effect of your Lordships' decision in Davie's case is that an employer, whether in England or Scotland, who purchases equipment from a reputable supplier and who has it inspected to an extent which is reasonable in the circumstances, has discharged his duty of care and cannot be liable if his employee to whom he issues the equipment is injured by a defect in it. If the employee cannot recover damages from the negligent third party, he cannot recover at all.

Now it is no part of the argument for this Bill that Davie's case was anything but a clear and correct statement of the law. When the House of Lords says what the law is on a particular subject, nobody (except itself) can gainsay it. But if it is the essential function of the courts to declare what the law is, it is equally the function of Parliament to take account of the state of the law, as declared by the courts, in the light of social and equitable considerations, which the courts very properly cannot recognise; and where appropriate it is the function of Parliament to legislate so as to change the law.

The question is, therefore, whether the law as revealed by the decision in Davie's case is really fair. To recover damages, the employee has got to find the person whose negligence caused the defect which injured him. This may not be easy. All the available records of the source of the equipment are in the hands of his employer. Most employers are no doubt very helpful in producing such information. However, they are under no obligation to do so, and in a few cases, employers (who may not wish to create difficulties with regular suppliers) have been so recalcitrant in this respect that employees have had to begin futile proceedings against them, not for the purpose of recovering damages but simply for the purpose of getting discovery of documents so as to be able to find and sue the negligent third party. But even with the employer's help, it may be difficult to identify the proper defendant. The defect may have been caused in transit—perhaps by the negligent handling of an unknown foreign docker. This kind of negligence might never be tracked down, and the injured employee (or his surviving relatives) may never be able to recover damages.

But even if he can find the negligent third party and prove his negligence, the employee may have great difficulty in recovering damages. The defendant may be a foreign firm (this is more and more likely these days), or he may be bankrupt or in liquidation. In these circumstances, a judgment in favour of the employee, no matter how hard-won, will not be of much use, for it will often be virtually unenforceable. Some sad examples of this sort of case were given during the debate in another place.

Now in these cases, there has been an accident in the firm which is not the fault of either the employer or the injured employee. Ex hypothesi, neither of them is to blame. But as between these two innocent parties, which is the better able, and the more appropriate, to bear the loss? This Bill is based on the proposition that it should be the employer. The employer is already, and rightly, recognised as having a wide responsibility for the safety of his employee. He is much more likely to have the information and the organisation to mount a successful action against the negligent third party, and if such an action cannot be brought he can much more easily stand the loss. He will already be insured against employers' liability and further cover against liability in these cases will not be a significant burden for him to bear.

The Bill is extremely short, consisting of only two clauses. Clause 1(1) is the operative provision. It provides that wherever an employee has suffered personal injury in the course of his employment in consequence of a defect in equipment provided by his employer for the purposes of his business, and the defect is attributable to the fault of a third party, whether identified or not, then as well as the third party the employer shall also be deemed to be liable, but without prejudice to all his rights to recover over against the third party.

It has been said that the purpose of the Bill is to reverse the decision in the case of Davie. This is partly true, but there is a little more to it than that. Under the present law as declared in Davie, the employer is not liable in cer tain circumstances. The Bill lays down a new principle of liability, and it cannot therefore be strictly tied to the circumstances of Davie. It will be noted that the rule proposed by the Bill makes the employer liable without any fault of his: that is, of course, its main purpose. But the Bill does not impose absolute liability on the employer: he is not made into an insurer. He is only liable where there has been proved fault by someone. The employee still has the task—and it may still be a heavy one—of proving that the third party was at fault. Only if he does so can either the third party or the employer be liable. The employer's liability is thus only auxiliary to the third party's. But the fact that he is so liable will help to restore the balance of advantage somewhat in the employee's favour.

The Bill applies only to personal injuries, and only where the equipment was provided by the employer for the purposes of his business. This means that domestic servants, for example, are not covered, and on the whole that seems right. Their whole situation and relationship with their employer is different from that of an industrial worker.

Some criticism was made at first in another place (though it was later very much modified) of the drafting method employed in Clause 1 of saying that where the Bill applies, the injury shall be deemed to be also attributable to negligence on the part of the employer…". It was said that this was objectionable, because it was calling an innocent man guilty. I hope it will be agreed that it is doing nothing of the sort. It is merely a technical device: and the Government's advisers, after considerable inquiry, are firmly of the opinion that this form of words, or something like it, is essential to safeguard the rights, not only of employees but also of employers—and, it may be added, of the Crown. This is a matter on which the noble and learned Lord the Lord Advocate will of course be able to speak.

Clause 1(2) provides that the employer cannot contract out of his liability under the Bill. The necessity of this seems obvious. It may be remarked, of course, that employers purchasing equipment from suppliers may well contract out of their right to recover in contract or tort if the equipment is defective. There may thus be cases where the employer will be jointly liable with the negligent third party under the Bill, but will have deprived himself by contract of his right of contribution against the third party. Again, a little reflection will show that this ought not to be relevant to the employee's right to recover from the employer. It will not make much difference in practice if, as is expected, employers will be insured against liability under the Bill as part of their general insurance against employer's liability.

Clause 1(3) defines some of the principal expressions used in clause 1(1)—"business", "employee", "fault" and "personal injury". Clause 1(4) provides that the Bill binds the Crown. This will affect only the civil servants of the Crown and not the Armed Forces, because the Bill is framed so as to create liability in tort: and Section 10 of the Crown Proceedings Act 1947 exempts the Crown from liability in tort for death or personal injury to a member of the Armed Forces.

Clause 2 provides that the Bill shall come into effect three months after receiving the Royal Assent. The Bill applies to Great Britain, but not to Northern Ireland; but Clause 2(3) empowers the Parliament of Northern Ireland to pass similar legislation if it thinks fit.

It may be that technical legal questions will be asked about the Bill; if so, the noble and learned Lord the Lord Advocate will be able to answer them, The principle behind the Bill is one which most people would agree is a fair one, and I hope that it will receive your Lordships' support. I beg to move.

Moved, That the Bill be read 2a.—(Lord Morris of Kenwood.)

6.9 p.m.


My Lords, the persuasive eloquence of my noble friend Lord Morris of Kenwood has transformed what might have been for me an onerous duty into something rather of a pleasure. I should like first to congratulate the noble Lord on having brought forward in your Lordships' House this altogether useful Private Member's measure. I would also, if I may, pay tribute to the very clear and helpful explanation of its purpose to your Lordships.

My only regret, perhaps, is that the warmth of my congratulations and of that tribute, which I am sure your Lordships would wish to be paid to him, must be tempered by the diffidence that is perhaps due from, and appropriate to, one who has not previously addressed your Lordships, an experience which I understand is traditionally regarded as being awe-inspiring. Whether it is more awe-inspiring when the Benches of your Lordships' House are relatively deserted or when they are more fully occupied is, perhaps, a matter upon which in due course I shall be able to form a judgment. Before turning to the Bill, let me say that I am grateful, too, to the noble Earl, Lord Dundee, and touched by his consideration in asking me to speak at this particular stage.

Of course, the Bill extends to both Scotland and England, and in welcoming it and commending its purpose to your Lordships on behalf of the Government, I do so with the concurrence of my noble and learned friend the Lord Chancellor. Perhaps I may, however, suggest that it is not altogether inappropriate that it should fall to a Scottish Law Officer to express the Government's support for this particular measure. I think there are three reasons for this. First, because many of the advances and developments in the field of law, known in England as tort and in Scotland as reparation, have emerged from notable decisions of your Lordships' House in Scottish appeals. I venture to mention, at this late stage of the evening, only two of these.

There was, of course, the classic of the decomposed snail which floated out from the dark, opaque glass bottle of ginger beer where it had been lurking unseen. This incident all started simply enough on a peaceful summer's night in the Scottish town of Paisley, when a simple Scottish housewife sought a modest refreshment in a little café, and ended in your Lordships' House as a historic landmark in the Law Reports, as Donoghue v. Stevenson. History does not relate whether this circumstance mitigated the distress which had been caused to Mrs. Donoghue by her experience, but it may well be that it did, particularly since at the end of the day, thanks to the wisdom of your Lordships, she won her case. The other notable case which I would mention in passing is English v. Wilsons and Clyde Coal Company in 1938—a case somewhat different in its facts, but of equal significance.

A second reason which I might mention, and which perhaps makes the Bill appropriate for a Scottish Law Officer (and I think it is right and in order to acknowledge this), is that a good deal of the inspiration of this Bill came from my learned predecessor in the office of Lord Advocate, Lord Stott, before he became a Senator of the College of Justice in Scotland. A third reason, which is certainly relevant, is that prior to 1959 it was in Scotland quite widely, but as transpired mistakenly, believed that in law the obligation upon an employer to use due care in providing sufficient equipment was not satisfied by obtaining it from a merchant or manufacturer of good repute. This belief will of course be realised if this measure is in due course enacted.

The Bill, as my noble friend said, has been generally welcomed by the Trades Union Congress and affiliated organisations representative of those working in industry and exposed to the dangers of industrial accidents. It has been welcomed, too, I may say, by many lawyers and others experienced in dealing with the claims of those injured in such accidents. As my noble friend said, it is a small but useful, and not unimportant, measure which seeks to reform one aspect of the law governing the liability of an employer for injuries sustained while at work by his employee. It does not, as the Government see it, constitute a major and fundamental change in the established doctrine of the law in this context.

Over many years the Common Law has been altered. It has been adjusted and refined to give a fuller and a better protection to men and women by misfortune injured in the course of their work. The Government see this measure as a further, a proper and a desirable step in this process. As my noble friend said, the need for considering whether or not there should be change was focused by the decision of your Lordships' House in Davie v. New Merton Board Mills. It emerged that prior to that decision there had been some uncertainty as to where the law stood in this particular context. In Scotland, certainly, it had been held in 1953, in the case of Donnelly v. Corporation of Glasgow, that an employer was liable for injury sustained by his employee due to a defect in plant, albeit it was hidden from the employer and albeit the employer had obtained the plant from a reputable and competent supplier whose negligence caused the defect. The decision in Davie, to which my noble friend has referred, necessarily, of course, overruled the decision in the case of Donnelly. In the outcome, the Government's view is that the law as it stands gives rise to hardship and to difficulties, and these emerge quite simply, as my noble friend made so clear to your Lordships, from the circumstance that the injured man is often without knowledge of the source from which the equipment came or, equally important, of its history. This may, as my noble friend put it, make his right of action illusory, particularly in those cases where the equipment has been imported.

My Lords, most of us with experience and practice at the Bar have seen the kind of difficulties and problems which arise, and at this late stage of the evening I shall not weary your Lordships with such illustrations, for this matter is surely not in dispute. The Bill has the merit of simplicity. It places responsibility for equipment supplied for the purposes of the employer's business on the employer. He, after all, is the person who obliges the workman to use the equipment, and he, in the event of a dispute as to the source of the equipment or in the event of the inability of the original defaulter to pay damages, is better able to bear the burden of an accident than the innocent worker, who may have been more or less seriously injured in the service of his employer.

I think there is little more that I need say about this Bill—perhaps only three things. First of all, I would emphasise that the Bill does not give a blank cheque to an injured workman. It does not impose an absolute liability, in a true sense. The injured workman will still have to prove fault by some third party as having been the cause of the defect; and the employer will still retain his rights of recourse against the ultimate defaulter who was responsible for the defect. Indeed, at the end of the day the practical result will be that the judicious employer will make certain that his employers' liability insurance policy covers this slightly extended field.

My noble friend referred to the technical device involved in deeming the fault of the responsible manufacturer or supplier to be that of the employer. This form of words, or something indeed like it, is essential to safeguard the rights of both parties, quite simply because it is essential to know the basis of the liability in order to be assured that the usual incidents of liability are automatically attracted to the situation. In short, my Lords, the Government regard this Bill as a limited but necessary and humane extension of the existing principles of the law governing an employer's liability, and a Bill which should commend itself to your Lordships' House.

6.24 p.m.


My Lords, my chief reason for wishing to say a few words on this Bill is that it gives me an opportunity to welcome the noble Lord the Lord Advocate to your Lordships' House as well as to congratulate him on the clear and interesting maiden speech to which we have just listened. The Act of Union between Scotland and England has now existed for 262 years, and I think I am right in saying that the noble Lord is the first Lord Advocate during this period who has sat in your Lordships' House, although since the Act of Union the Lord Advocate has in fact on some occasions been the only Scottish Minister and on other occasions has been more powerful than the Secretary of State. I hope I shall not be misunderstood if I say that I rather wish he were now. But, my Lords, he occupies a very high and very ancient Office in Scotland and one which I think it is fitting should be accompanied by a seat in your Lordships' House. Quite apart from that, it will be exceedingly useful to have him here, because the only other Scottish Minister we have, although extremely able and brilliant, has far too much work for one man to do; and we shall now look forward to having a greater variety of Scottish talent on the Front Bench opposite.

My Lords, I asked if the noble Lord could speak before me because on the occasion of his maiden speech I did not want to subject him to any kind of cross-examination, and I hope that the very few and short questions which I have to ask can be replied to simply and quickly, because I do not want a long reply from the noble Lord, Lord Morris, who has moved the Second Reading of this Bill. If he should have to appeal to the Lord Advocate I have no doubt your Lordships will give the Lord Advocate leave to speak again, but I hope that will not be necessary. Naturally, some misgivings are bound to be caused by a Bill which transfers legal liability from people who are negligent to people who are not negligent and which lays down in Statute Law that those who are proved not to be negligent shall nevertheless be deemed to have been negligent. Anyone who is not a lawyer feels a little uncomfortable about legislation which does that kind of thing.

If I understood the noble Lord, Lord Morris, rightly, I think he made clear in his speech something which had not been quite clear to me from the Bill, and that is that an injured employee has the choice of suing either his employer or the negligent manufacturer from whom the equipment was procured, although the employer is in a position to prove that he has taken all reasonable care to make sure that the equipment is safe; in other words, that he has not been negligent. I should like to be assured that the employee who is injured is not compelled to sue the employer and then make the employer get it back from the manufacturer. I should like to be assured of this particularly because I can think of some cases in which it might be very much to the disadvantage of the employee that he should think it the normal thing to do to sue his employer. For instance, the employer might be a man of small means who does not possess enough to pay the damages appropriate in respect of a serious accident, and if the employer had accepted an indemnity clause in the contract for the sale of the equipment which had caused the accident he might in any case not be able to recover what he had to pay to his workman from the manufacturer whose inefficiency or negligence was really responsible for the accident. I think that would be most undesirable from every point of view. I should like to be assured that it could not happen as a result of this Bill. It seems to me that if the employer and the manufacturer are both equally identifiable, and even if they are both able to pay the compensation, there is no good argument for transferring the liability from the negligent manufacturer to the non-negligent employer. It seems to me that that would be an unjust and antisocial thing to do.

The only reason for doing it would be (as in the hypothetical case the noble Lord mentioned; although there may be actual cases) where the employer refused or was unable to supply they injured person with the identity of the manufacturer who had been negligent or with the evidence which was necessary to enable the injured party to recover damages. In that case I do not know whether the simplest remedy would be to have a narrower Bill which would apply to those special circumstances or whether this Bill is the right way of doing it. But I should like to be assured that the injured party has the right of choice, and presumably he would rely upon his legal advice to take whatever course would be likely to lead to satisfactory compensation. There are obvious circumstances in which he ought to have the right of suing against his employer. One circumstance, which I think the noble Lord also mentioned, would be where the manufacturer was outside the country and could not be sued except at prohibitive expense or with great difficulty.

There are also, I think, possibilities in this Bill of hardship to the employer. One can easily imagine circumstances in which an employer who was entirely innocent of any negligence would have to pay damages for reasons which one could not regard as socially just. I dare say that these cases might be very few and I am prepared for the moment to accept the Bill as it stands. My noble friend Lord Colville of Culross was to have taken charge of the Bill for the Front Bench on this side this afternoon, but he has a case of importance in East Anglia in which he has to appear. I shall have a short consultation with him when he returns on the question whether or not it is necessary to put any Committee Amendments down for this Bill. Meanwhile I do not wish to detain your Lordships further. I should be grateful if the noble Lord could assure me on the few points I have mentioned.

6.34 p.m.


My Lords, I shall not keep your Lordships for more than a moment or two. I cannot conceal that my object in speaking is exactly the same as that of the noble Earl who has just spoken. As an Englishman, I should like from these Benches to congratulate the Lord Advocate on what was I think his maiden speech. It is perfectly true that Lords Advocate are not quite what they used to be. Anyone who wants to look into their history might examine in the museum in Inverness the very blunt letter which Lord Dundas wrote to the bailies of Inverness who had been trying cases between smugglers and the police and who had always believed the smugglers but never the police. None the less, Lords Advocate still remain very important people. I should like to discover at some time whether my noble and learned friend exercises his right to plead in court in a hat. I did not know that a Lord Advocate had that right; and from the slightly astonished appearance of my noble and learned friend I am not sure that he did. But, if I may, I will show him the authority for it afterwards, if he should want to see it. Anyway, apart from the position of a Lord Advocate, it was, if I may humbly say so, a very good, clear speech, and I hope we are going to get a great many more of them. When I was in the Commons—and I was there for quite a long time—we much regretted the absence of a Scots Law Officer somewhere in Parliament. I am glad that we have one here to-day.

As regards the Bill, all I need say is that I think it is a very good Bill; but on this occasion, as indeed on some others, the Scots were rather a little before the English. There is one small point that I propose to raise in Committee. I think the word "equipment" needs a little more clarification. The point was raised on Report in the Commons, but it was very shortly discussed. It is a small point, so small that it raises no question of principle at all. Having discharged my main purpose, I once again congratulate the Lord Advocate—and I am sure that I do so on behalf of all noble Lords—on his first speech here.

6.37 p.m.


My Lords, like my noble friend Lord Mitchison, I shall not speak for more than a minute or two, but I should like to express a warm welcome to a Bill which commends itself so strongly as this one does to trade union opinion. I am happy to say that speaking on this subject gives me the opportunity of joining in the congratulations and welcome to the Lord Advocate. It is perhaps a little presumptuous of a Back-Bencher to offer such congratulations to a Front-Bencher and I cannot do so with the historical knowledge of my noble friend Lord Mitchison, but I can perhaps claim one ground for not being too presumptuous: at least, I can claim to be half English and half Scottish.

As I said, this Bill commends itself strongly to trade union opinion, and since the present law was clarified a number of representations have been made by trade union organisations in favour of a change in the law. It closes a gap in the legal provision for the protection of the worker against the financial consequences of injury by accident at work. It has been sought because the present position seems to place an unfair onus upon the worker. I take the point made by the noble Earl, Lord Dundee, that there may be cases in which the employer is himself a person of small means, but I should have thought that in general the employer was far better circumstanced for shouldering a responsibility of seeking compensation from the person with the ultimate responsibility than was the individual worker. Further, I should have thought that any employer who employs workers upon any scale would cover his liabilities for his responsibilities in the case of injuries by insurance, and that this extension of the law, this change, would hardly add materially to his insurance liabilities.

I hope, therefore, that your Lordships will give a cordial welcome to the Bill. Even though there may be, as my noble friend Lord Mitchison has said, one or two points which will require attention in Committee, I do not think we can feel any doubt that the Bill represents a valuable step forward, and we are grateful to my noble friend Lord Morris of Kenwood for having introduced it in this House.

6.40 p.m.


My Lords before answering the points which have been raised, may I take the opportunity to associate myself with my noble friends, Lord Mitchison and Lord Delacourt-Smith, and the noble Earl, Lord Dundee, in their congratulations to my noble and learned colleague, the Lord Advocate. I am sure that noble Lords will agree that his "baptism" in your Lordships' House is a good augury of what we may expect from him in future, and I look forward with great pleasure to hearing from him again.

The noble Earl, Lord Dundee, raised as his main point the question whether the employee has a right of choice; whether he is to sue the third party or whether he must sue the employer. The answer is simple: he does have that choice, and I am sure that if the employee is able to sue the third party, the negligent party, without any difficulty, this he will do. It is only when this becomes difficult that the Bill gives him the right to sue the employer. The noble Earl raised the question of the small employer, which I think has already been answered by my noble friend, Lord Delacourt-Smith. Regarding the question of insurance, I think most employers will, as I have already said, have taken out insurance under the normal employers' and if they have not done so I am sure that the advent of this Bill will persuade them so to do, so that the chances of a small employer having to carry a heavy burden as a result of an accident in the circumstances concerned will not arise. This, after all, is one of the main defects of the Bill so far as the employer is concerned.

My noble friend Lord Mitchison raised the question of the definition of "equipment". This is a point which has occupied the minds and thoughts of the Government Law Officers for some considerable time. They do not have strong feelings on it, one way or the other, and I am sure that if the noble Lord, Lord Mitchison, wishes to put down an Amendment on the Committee stage we shall be pleased to give it careful consideration. I do not think there is anything further that I can add at this stage. I would perhaps say that I do not know whether the emptiness of the House is any indication of a lack of interest, or is an indication of general support for the Bill. I hope that it is the latter.

On Question, Bill read 2a, and committed to a Committee of the Whole House.