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Monetary remedies in public law – misdiagnosis and misprescription

Published online by Cambridge University Press:  02 January 2018

Roderick Bagshaw*
Affiliation:
Magdalen College, Oxford

Abstract

This paper argues that the Law Commission's discussion paper Monetary Remedies in Public Law was vitiated by three flaws prevalent in the critical literature that it surveyed. The first, and most significant, flaw is a tendency to proceed by dislocating legal rules from their context then comparing them as abstract verbal formulae. This is made apparent through a comparison between unreasonableness in the tort of negligence and Wednesbury unreasonableness. The second flaw is the presentation of evaluative conclusions without a sufficient defence of the criteria used to reach them. The third flaw is the adoption of an unhelpfully static perspective as to the purpose of public-law liability rules, which neglects the positive role that they play in structuring good public decision making. The paper concludes by providing a sketch for the design of a research project which transcends these flaws.

Type
Research Article
Copyright
Copyright © Society of Legal Scholars 2006

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References

1. Public Law Team, Law Commission Monetary Remedies in Public Law. A Discussion Paper (11 October 2004) at para 9.1. In subsequent footnotes the discussion paper will be cited as MRPL. Because the document has the status of a discussion paper, rather than a consultation paper, it does not formally express the Law Commission's views.

2. It did not consider contractual or restitutionary awards of money.

3. MRPL, above n 1, Summary at ix.

4. For instance, a clear example of language going beyond reporting of perceptions is provided by the first paragraph under the heading ‘Is the current law unnecessarily complex?’. MRPL, ibid, para 8.33 provides: ‘The current law is a minefield for claimants and defendants alike. The subject of public bodies’ liability for acts performed in the public sphere was described by MacKinnon LJ in 1939 as “in a state of lamentable obscurity and confusion”. There is force in Carnwath's assessment that it “is in no happier condition 60 years later” ’ (footnotes omitted).

5. See the website available at http://www.lawcom.gov.uk/remedies.htm. Some of the ways in which the Law Commission's focus may have changed can be gleaned from the way in which the project is described in paras 3.39–3.50 of Law Commission Ninth Programme of Law Reform (Law Com No 293, March 2005).

6. I doubt whether there is much to be gained by naming the torch bearers of ‘critical orthodoxy’, but its adherents would tend to agree with the propositions that (a) the judiciary has unnecessarily restricted the scope of tort liability of public bodies; (b) the reasoning supporting such restrictions has inappropriately exaggerated the significance of many of the policy concerns that are regularly invoked; (c) the doctrinal explanations for these restrictions are unnecessarily complex and incoherent; and (d) some degree of extension of the scope of tort liability would be more just and wholly consistent with good public policy. The label ‘critical orthodoxy’ seems appropriate since this strain of opinion seems dominant among those who regularly offer critical evaluations of legal decisions in this area in academic writing. Clearly, I do not intend to claim that all adherents to ‘critical orthodoxy’ share identical views on all points or that alternative perspectives cannot be easily found in academic writing.

7. The language of the paper sometimes goes beyond identifying this as a possible inference. For example, MRPL, above n 1, para 4.1 provides: ‘European Community law is a fertile source of ideas regarding the liability of public bodies for loss caused by administrative acts. The European Court of Justice…has produced a jurisprudence which is arguably far more sophisticated than that found in English law’. The introduction of the word ‘arguably’ does not veil the authors’ opinion as to the relative merits of the two bodies of law, particularly when no mention is made of how one might argue that it is ‘less sophisticated’ and the possibility that it is not‘a fertile source’ is ignored. MRPL, ibid, chapter 3, part of which asks whether the structure of the cause of action under s 6 of the Human Rights Act 1998 ‘can be used as a source of inspiration on how best to deal with the issue of monetary remedies in public law’, is more balanced. Paragraph 3.34 provides: ‘A key issue is whether the approach to compensation arising for breach of the Human Rights Act should be regarded as a special case, or as providing the basis for a new general approach to compensation in public law cases’.

8. MRPL, ibid, Part 1, especially at paras 1.8 and 1.7

9. In some places this opinion is express. For instance, MRPL, ibid, para 9.6 provides: ‘It may therefore be suggested that the principal difficulty with leaving the courts to reform the law is not that the courts will refuse to extend the liability of public bodies, but that they will do so inappropriately’.

10. MRPL, ibid, at paras 8.15 and 8.24.

11. Ibid, at para 8.6.

12. Ibid.

13. Hereafter, for the sake of economy, I will refer only to ‘public bodies’ rather than ‘public officials and public bodies’.

14. It is, of course, possible that the authors had some other purpose in mind. For instance, they may have intended to invoke the distinction between infringement of ‘independently recognised rights of non-interference’ and failure to confer entitlements allocated by the state; see Cohen, D and Smith, JCEntitlement and the body politic: rethinking negligence in public law’ (1986) 64 Canadian Bar Review 1 at 15–16.Google Scholar

15. R v Knowsley Metropolitan Borough Council, ex p Maguire and Others[1992]The Times, June 26.

16. Obviously, my point is based on the assumption that it is unrealistic to expect well-driven vehicles to never collide with bicycles and to expect conscientious and competent bureaucrats never to misinterpret statutes.

17. To give an easy example, if a public official detains someone for longer than is lawful because he has misunderstood the relevant law, there is no need to establish that the misunderstanding was a result of negligence, still less that it was a result of misfeasance in public office: R v Governor of Brockhill Prison, ex p Evans (No 2) [2001] 2 AC 19. Similarly, if a decision to detain is unlawful as a result of public-law unreasonableness ‘[t]he Wednesbury principles, as they are usually referred to, are applicable to determining the lawfulness of the exercise of statutory discretion of a constable under [the statutory power to arrest that existed before the Police and Criminal Evidence Act 1984], not only in proceedings for judicial review but also for the purpose of founding a cause of action at common law for damages for that species of trespass to the person known as false imprisonment, for which the action in the instant case is brought’; Holgate-Mohammed v Duke[1984] AC 437 at 443 per Lord Diplock.

18. Obvious gaps left by the trespass torts include the infliction of purely financial loss, the infliction of mental distress short of psychiatric injury and the causing of personal injury or property damage without direct infliction, for instance by omission. Reputation and privacy are currently protected by separate liability regimes that reflect neither the pure trespass nor negligence models.

19. MRPL, above n 1, at paras 7.14–7.22.

20. Ibid, at para 7.22.

21. Ibid, at para 1.4.

22. No doubt this point could be reinforced by examination of the different ways in which public and private institutions cooperate in fulfilling governmental objectives.

23. MRPL, above n 1, at para 1.2. The paper continues: ‘A mature legal system should be able to give a coherent answer to these questions. English law does not’. One must obviously be careful before attaching too much weight to such a claim. Should a mature fiscal system be able to give a coherent answer to how much tax it is fair to ask each contributor to the revenue to pay? Should a mature welfare system be able to give a coherent answer to the question, who is entitled to what support from the state?

24. It is unclear whether contemporary politicians would want to disown Aneurin Bevan's pledge to ‘universalise the best’ (NHS Bill, 2nd reading, HC Deb, vol 422, cols 43–63, 30 April 1946). Certainly the terms of the ‘contracts’ under which medical practitioners are retained by NHS bodies to provide services do not suggest that they are expected to provide a standard of knowledge, skill or competence different from that which would be implied into a private contract with a patient.

25. A category that covers cases such as Rowling v Takaro Properties[1988] AC 473 and R v Knowsley Metropolitan Borough Council, ex p Maguire and Others[1992]The Times, June 26 and may extend as far as cases such as Harris v Evans[1998] 1 WLR 1285.

26. A category that covers cases such as Hill v Chief Constable of West Yorkshire[1989] AC 53.

27. A category that covers cases such as Phelps v Hillingdon Borough Council[2001] 2 AC 619, Kent v Griffiths[2001] QB 36, Clunis v Camden and Islington Health Authority[1998] QB 978.

28. A category that covers cases such as D v East Berkshire Community Health NHS Trust[2005] UKHL 23, [2005] 2 WLR 993; Brooks v Commissioner of Police of the Metropolis[2005] UKHL 24, [2005] 1 WLR 1495; the successful claim in Capital and Counties plc v Hampshire County Council[1997] QB 1004.

29. For instance, risk regulation can be presented as a public service, and the reduction of risk as a public goal. But, equally, it is clear that not all public-service delivery can be reasonably described as regulatory, and pursuit of some public goals can only be described as service delivery at the expense of awkwardness.

30. Some commentators, for instance, would be eager to introduce a distinction between harm caused by acts and harm caused by statements.

31. Even if there is a multifaceted grand conundrum (rather than a cluster of problems), this does not mean that a unified, coherent answer is necessarily optimal. While coherence can be valuable, it is a goal that may have to be, and should be, traded-off where it stands in the way of practical achievement. For instance, if a scheme can be designed that provides a good degree of security for a particular sub-class of injured people without the costs or side-effects of the tort system then ‘coherence with the rest of the law of tort’ or ‘equal treatment for all classes of similar victims’ should not be treated as unanswerable objections.

32. MRPL, above n 1, at para 4.1.

33. Schuck, PH Legal complexity: some causes, consequences, and cures’ (1992) 42 Duke Law Journal 1 at 3.CrossRefGoogle ScholarIn the next sentence he concedes that an alternative, more subjective, measure would concentrate on how far ‘the people subjected to a legal rule, process, or institution perceive and experience it as complex’.

34. The counterbalance is obviously not inevitable: the relationship between the rules may be uncertain, for instance because they clash or must be distilled from numerous sources.

35. MRPL, above n 1, at paras 9.11–9.13, citing M Fordham ‘Reparation for maladministration: public law's final frontier’[2003] Judicial Review 104 at 108; Harlow, C State Liability – Tort Law and Beyond (Oxford: Oxford University Press, 2004) p 116;CrossRefGoogle Scholar

36. MRPL, ibid, at para 9.13.

37. Schuck, above n 33, pp 18–25.

38. Ibid, p 20. Schuck concedes that governance costs could be presented as a special type of transaction cost.

39. Both lawyers and legal scholars gain professional advantages from legal complexity, but while this may help to explain the proliferation of complex legal regimes it should not be ranked as a benefit of complexity.

40. MRPL, above n 1, at para 8.25, citing Fordham, above n 35, at 105.

41. MRPL, ibid, at para 8.32, quoting from Markesinis, B et al Tortious Liability of Statutory Bodies: A Comparative and Economic Analysis of Five English Cases (Oxford: Hart Publishing, 1999) p 79.Google Scholar

42. Usually the data necessary to generate a reliable model of how an administrator would react to a change in liability rule would require extensive empirical analysis: it would be extraordinarily bold to assume that all administrators at all grades in all departments within national and local government would be likely to respond to incentives generated by tort liability rules in the same way. One reason why this would be bold is that administrators are likely to respond to their perceptions of how liability rules work, rather than to how they actually work, and such perceptions are likely to vary in accordance with the local experience and culture of different institutions. A further problem for any modeller is that there is no agreement as to what goals administrators pursue. Schuck points out that different models of bureaucratic decision making assume that officials seek to maximise budget, political support, autonomy, discretion, or some combination of these, or describe administrators’ goals instead in terms of ‘satisficing’, ‘organisational maintenance’, ‘muddling through’ or ‘managing uncertainty’; Schuck, PH Suing Government (New Haven: Yale University Press, 1993) p 59.Google ScholarAgain, it seems reasonable to doubt whether goals will be constant across public administration.

43. Cane, P Consequences in judicial reasoning’in Horder, J (ed) Oxford Essays in Jurisprudence ( 4th Series ) (Oxford: Oxford University Press, 2000) p 58.Google Scholar

44. A parallel can be drawn with Jane Stapleton's important work on the duty of care stage in the tort of negligence. She famously argued that ‘[i]f the courts desire convincingly to contain liability in the tort of negligence, they must determine and explicitly articulate an agenda of coherent reasons which are “countervailing” to the imposition of liability’; ‘Duty of care: peripheral parties and alternative opportunities for deterrence’ (1995) 111 Law Quarterly Review 301 at 301but also conceded that ‘while the listing of these judicial menus of sound factors relevant to the duty issue help[s] unmask the substantive determinations being made by judges in this field, they cannot operate as some sort of mechanical guide as to how a novel case will be decided in the future’; ‘Duty of care factors: a selection from the judicial menus’ in The distinction between ‘unmasking’ the factors that ought to influence a decision and ‘revealing the best answer’ should be obvious. Clearly, ‘unmasking’ can indirectly improve the prospects of better decisions, and, perhaps more importantly, transparency improves the opportunity for participation and accountability. But it must be doubtful whether those who have sought to derive answers to concrete questions by reflecting on menus of ‘unmasked’ factors would describe the route to an answer as less complex than its incrementalist and analogical rival.

45. MRPL, above n 1, at para 2.23.

46. Ibid, at paras 2.25 and 2.27, respectively; emphasis added.

47. Associated Provincial Picture Houses Limited v Wednesbury Corporation[1948] 1 KB 223. The bare claim that the standards are converging might mean that when public lawyers apply a Wednesbury standard they are moving towards use of the same techniques as negligence lawyers would use in setting a standard of care, or that when negligence lawyers are setting a standard of care they are moving towards the use of the same techniques as public lawyers would use to determine whether a decision is Wednesbury unreasonable, or that both of these moves are occurring. It seems that most of those who claim to have detected a convergence believe that there has been a change in both the public lawyer's approach to setting a Wednesbury standard and the negligence lawyer's approach to setting a standard of care. See, eg, PP Craig and D Fairgrieve ‘Barrett, negligence and discretionary powers’[1999] PL 626 at 648–649.

48. Blyth v Birmingham Waterworks Co’ (1856) 11 Ex 781 at 784 per Alderson B.

49. The formulations of the public-law standard were commended by Lord Cooke of Thorndon in R v Chief Constable of Sussex, ex p International Trader's Ferry Ltd[1999] 2 AC 418 at 452.

50. MRPL, above n 1, at para 2.55.

51. In discussing the so-called calculus the paper presents an example where a local authority has to choose between three options, respectively carrying an 85%, 90% and 95% probability of causing severe loss (MRPL, ibid, at para 2.66). The example is incomplete in that it does not specify what goal might justify having to select between such dangerous options, whether each option has the same probability of achieving this goal or whether the loss is expected to be of the same severity for each, and there is no mention of any other difference between the three options that might justify selecting one other than that carrying the lowest risk. Because the example is incomplete, it is impossible to determine whether the authors favour an aggregate–risk–utility test or have left the issue wholly open.

52. In United States v Carroll Towing Co 159 F 2d 169 (2d Cir 1947) at 173, Judge Learned Hand provided a mathematical formula stating that a person's conduct is negligent if, and only if, the risk (P times L) created by the conduct is greater than its utility (B), where P is the probability of an injury occurring, L is the magnitude of the injury and B is the burden or cost that would have to be borne to avoid engaging in the conduct, including the foregone benefits expected from engaging in the conduct.

53. Bolam v Friern Hospital Management Committee[1957] 1 WLR 582.

54. MRPL, above n 1, at para 2.63.

55. Ibid, paras 2.64–2.68 seem most relevant.

56. The so-called calculus generally requires a court to identify some precaution that the defendant could have taken which would have reduced the cost of accidents. (If there is no identifiable precaution then what can be used as the ‘burden or cost that would have to be borne to avoid engaging in the conduct’ for the purposes of applying the Hand formula?) But there is only rarely a precaution that a defendant can take to make up for the risk of a lapse in skill or a gap in knowledge (eg where the defendant becomes aware of a specific weakness that can be countered). Moreover, defendants are generally held liable for the lapse rather than for failing to take some step that might have avoided it.

57. See, eg, Wright, RW Justice and reasonable care in negligence law’ (2002) 47 American Journal of Jurisprudence 143;CrossRefGoogle Scholar

58. One area in which ‘deference’ (itself a term that suffers from being regularly analysed in a dislocated manner) is appropriate is where scientific uncertainty prevents a conclusion that a particular precaution is ‘obviously efficient’. Where scientific knowledge ‘runs out’ the professional intuitions reflected in the behaviour of respectable bodies of professional opinion may be the most appropriate substitute.

59. Decision making may be ultra vires for an even wider range of reasons: for instance because of an error of law or a failure to allow a person with an interest in the decision a fair opportunity to participate in it.

60. This line is usually traced back to R v Parliamentary Commissioner for Administration, ex p Balchin[1998] 1 PLR 1 at 13.

61. It might be thought that where a decision is Wednesbury unreasonable for a reason other than a failure to give sufficient weight to the claimant's interest the claimant will not be able to demonstrate that the unreasonableness caused the loss. This, however, is not true: for instance, a wasteful action which it would be Wednesbury unreasonable for an authority to undertake (because of its wastefulness) may incidentally create a risk for the claimant, while inaction would not.

62. A contrary view has been expressed by Cane, P Damages in public law’ (1999) 9 Otago Law Review 489 at 507,Google Scholarwhere he states that prima facie a decision that is Wednesbury unreasonable is ipso facto ‘negligent’ in the sense that this term is used in tort law, and that the view that this is not the case is based on mistakenly ‘thinking about negligence as a frame of mind (inadvertence) rather than as what it is, namely breach of a standard of conduct’.

63. The dislocation of abstract formulations of the law from practical realities is particularly common in textbook discussions of the ‘Wednesbury unreasonableness’ standard. It seems likely that a range of faults underlie the cases where a decision has been found to be ‘Wednesbury unreasonable’, such as ‘the reasoning does not add up’, ‘the pattern of decisions reveals a mystifying inconsistency which has not been explained’, ‘to reach such a conclusion the decision maker must have misunderstood the law which sets out what he was meant to be doing, though I cannot pin down the particular legal term which was misunderstood’. It seems unlikely, however, that there is a single ‘template of minimum reasonableness’ for a decision that is shared across the judiciary.

64. Two of the articles in which Richard Wright attacks the ‘aggregate–cost–benefit’ test and puts forward his ‘non-balancing, equal-freedom and rights-respecting, prohibitory-cost’ test have been cited above n 57. But this test does not yield any simple answer to the question of what standard of care a public body should be held to, since in such cases, particularly where there has been a failure to confer a benefit, the ‘equal-freedom and rights-respecting’ element is difficult to apply. Dugdale, AMPublic authority liability: to what standard?’ (1994) 2 Tort Law Review 143 Google Scholarhas also urged the rejection of ‘aggregate–cost–benefit’ as the primary source of appropriate standards for public defendants. But his suggestion that courts should make use of reliable ‘community values’, perhaps as expressed in common practice or codes of performance targets, offers no solutions where no such values are apparent. Cohen and Smith, above n 14, at 11, point out that in some contexts ‘each situation which the bureaucracy confronts can be perceived as a unique event – justifying the absence of standards, and explaining idiosyncratic and dynamic decision-making processes which are situation-dependent’ (footnote omitted) and argue that ‘neither judges nor legislators have the information, background or resources to develop negligence standards to be used by or imposed on bureaucrats’.

65. It may be worth adding that to make an error of law is not necessarily negligent, in particular to fail to consider whether to exercise a discretionary power is not necessarily negligent and to make an error of fact is not necessarily negligent.

66. This is, of course, different from the question whether a decision that unreasonably neglects a particular claimant's interests should always give rise to a right to claim damages in the tort of negligence. So long as the duty of care stage remains a significant part of the tort of negligence, the answer to this question will remain ‘no’; for a recent discussion of this point, see D v East Berkshire Community Health NHS Trust[2005] UKHL 23, [2005] 2 WLR 993.

67. By way of illustration, which of 100 premiership footballers is the tallest is straightforward for a judge to rule on, but which of the 100 is the most handsome is not. There might, of course, be a simpler set, say of two footballers, where a judge would feel confident ruling on both which was taller and which more handsome. Thus, justiciability depends on both the standard being applied and the features of the particular set: the same set may be justiciable with regard to one standard (height) and non-justiciable with regard to another standard (appearance).

68. If it is the case that ‘Wednesbury unreasonableness’ is actually a complex agglomeration of standards, see above n 63, then we might expect some parts of this agglomeration to be justiciable in a wider range of cases than others. For instance, judges may be content to answer the question ‘whether the reasoning adds up’ across a wider range of cases than ‘whether the distribution of resources between competing needs was wholly unreasonable’.

69. Related to this, there would be no obvious reason why a public-law judge would want to insist that the aggregate–cost–benefit approach should only be used where a claimant was owed a tortious duty of care, though clearly, if the approach was to be adopted as a mandatory element of good public administration, it would be necessary to determine which interests of which parties should be evaluated using this approach.

70. Conformity with such guidance does not guarantee avoidance of liability, in particular if the guidance can be proved to contravene the basic negligence standard, but conformity with guidance makes liability far less likely.

71. The scope of application of the standard is then stretched out from this core to cases that are held, for one reason or another, to demand equal treatment. Thus, the core case explains why the doctor owes a duty to maintain minimum professional standards of skill and competence to the selective, conscious, adult patient, and the scope of this duty is then extended to the unconscious, infants and others who had no opportunity to choose between doctors.

72. Of course, these questions can sometimes be answered. For instance, a new ‘profession’ without established standards may present itself as a substitute for the expertise of an established profession; in such circumstances it may be appropriate to translate across the standards of the established profession.

73. Many common-law systems do not recognise a duty to take reasonable care in the making of truly political decisions, although the language used to define the scope of this no-duty category varies. One reason why such a category is justifiable is the impossibility of identifying an appropriate standard of care with regard to the making of such decisions. It may be worth repeating the point that being able to identify outlandish examples of decisions that would be widely described as ‘obviously products of failures to meet minimum standards of political professionalism’ is not the same as being able to design a standard that can be promulgated to decision makers as one of the minimum conditions of good public administration.

74. It may be worth emphasising that it is not my intention to argue that there is an essential ‘disjunction’ between public and private standards of unreasonableness. The general argument that the same concept of reasonableness ought to be used to define one of the limits of a claimant's private-law right against a public body and simultaneously one of the limits of that public body's powers seems to me to be correct; see Hickman, TThe reasonableness principle: reassessing its place in the public sphere’ (2004) 63 Cambridge Law Journal 166. 15–16.CrossRefGoogle ScholarMy argument is not that the same concept should not be used but that (a) discussions which concentrate on dislocated abstract formulae distract from the fact that a suitable working concept has not been identified and defended; and (b) it cannot be assumed that all the elements which are sometimes found clustered under the same formula are equally suitable for incorporation into a suitable concept. My argument has also implied that (c) the variations between the different contexts where practical answers are required may mean that a satisfactory unitary concept of ‘unreasonableness’ cannot be identified.

75. In putting forward these suggestions I am, of course, aware that offering a sketch of a research project is not the same as conducting one, just as ‘offering a sketch of a justice machine is not the same as building one’; see text above at n 44.

76. In particular, some commentators might urge separate treatment of the situation where state involvement does not extend beyond collecting, collating and publishing information about risks.

77. For similar reasons I would reject the over-simplified legal principles sometimes put forward by legal commentators such as ‘the administration should be liable for all loss that it causes which it was not legally authorised to cause’.