“(1)Whether a breach by the Defendant ofsection 561(2) of the Income and Corporation Taxes Act 1988 would give rise to a cause for action for damages by the Claimant. (2)If so, whether the Defendant was in breach ofsection 561(2) of the Income and Corporation Taxes Act 1988 in the circumstances alleged by the Claimant in the Particulars of Claim. (3)Whether the Defendant owed a common law duty of care to the Claimant to process the Claimant’s application for a certificate undersection 561(1) of the Income and Corporation Taxes Act 1988 with reasonable expedition. (4)If so, whether the Defendant was in breach of that common law duty of care in the circumstances alleged by the Claimant in the Particulars of Claim”
“In other words, to avoid the loss to the Revenue caused by subcontractors defaulting on their tax liabilities, the contractor is obliged to pay the sub-contractor’s likely tax liability in advance. The existence of a CIS certificate enables the sub-contractor to be treated like any other trader both by the Revenue and by the contractors for whom it works. It will be appreciated from this that a CIS certificate is very valuable to the sub-contractor The ability to control the grant of these certificates is also of importance to the Revenue In substance, the statutory scheme is designed to ensure that they are only granted to subcontractors who are likely to comply with their tax obligations”
“(a) any person carrying on a business which includes construction operations”
“A sub-contractor should notify the Tax Office of any change to the business, registered office or private address”
“My Lords, in my opinion the judgment of the Court of Appeal was clearly right. It is, I think, true that it is often a difficult question whether, where a statutory obligation is placed on A, B who conceives himself to be damnified by A’s breach of it has a right of action against him. But on the present case I cannot entertain any doubt. I do not propose to try to formulate any rules by reference to which such a question can infallibly be answered. The only rule which in all circumstances is valid is that the answer must depend on a consideration of the whole Act and the circumstances, including the pre-existing law, in which it was enacted. But that there are indications which point with more or less force to the one answer or the other is clear from the authorities which, even where they do not bind, will have great weight with the House. For instance, if a statutory duty is prescribed but no remedy by way of penalty or otherwise for its breach is imposed, it can be assumed that a right of civil action accrues to the person who is damnified by the breach. For, if it were not so, the statute would be but a pious aspiration. But “where an Act” (I cite now from the judgment of Lord Tenterden CJ in Doe Bridges 1 B&Ad.847, 859) “creates an obligation and enforces the performance in a specified manner, we take it to be a general rule that performance cannot be enforced in any other manner”
“The sanctions Order thus creates a statutory prohibition upon the doing of certain classes of acts and provides the means of enforcing the prohibition by prosecution for a criminal offence which is subject to heavy penalties including imprisonment. So one starts with the presumption laid down originally by Lord Tenterden CJ in Doe d. Murray v Bridges (1832) 1 B&Ad.847, 859, where he spoke of the “general rule” that “where an Act creates an obligation, and enforces the performance in a specified manner.. that performance cannot be enforced in any other manner” — a statement that has frequently been cited with approval ever since, including on several occasions in speeches in this House. Where the only manner of enforcing performance for which the Act provides is prosecution for the criminal offence of failure to perform the statutory obligation or for contravening the statutory prohibition which the Act creates, there are two classes of exception to this general rule. The first is where upon the true construction of the Act it is apparent that the obligation or prohibition was imposed for the benefit or protection of a particular class of individuals, as in the case of the Factories Acts and similar legislation. As Lord Kinnear put it in Butler (or Black) v Fife Coal Co Ltd[1912] AC 149 , 165, in the case of such a statute: “There is no reasonable ground for maintaining that a proceeding by way of penalty is the only remedy allowed by the statute.. We are to consider the scope and purpose of the statute and in particular for whose benefit it is intended. Now the object of the present statute is plain. It was intended to compel mine owners to make due provision for the safety of the men working in their mines, and the persons for whose benefit all these rules are to be enforced are the persons exposed to danger. But when a duty of this kind is imposed for the benefit of particular persons there arises at common law a correlative right in those persons who may be injured by its contravention”
“Arguably, both of these can be said to apply to some sections of the Education Acts. But again neither is conclusive; a broader approach is required. As Lord Jauncey of Tullichettle put it in R vDeputy Governor of Parkhurst Prison, ex parte Hague[1992] 1 AC 58 , 170: “It must always be a matter for consideration whether the legislature intended that private law rights of action should be conferred on individuals in respect of breaches of the relevant statutory provision”.”
“In this category, the claim alleges either that a statutory duty gives rise to a common law duty of care owed to the plaintiff by the defendant to do or refrain from doing a particular act or (more often) that in the course of carrying out a statutory duty the defendant has brought about such a relationship between himself and the plaintiff as to give rise to a duty of care at common law. A further variation is a claim by the plaintiff that, whether or not the authority is itself under a duty of care to the plaintiff, its servant in the course of performing the statutory function was under a common law duty of care for breach of which the authority is vicariously liable. Mr Munby, in his reply in the Newham case, invited your Lordships to lay down the general principles applicable in determining the circumstances in which the law would impose a common law duty of care arising from the exercise of statutory powers or duties. I have no doubt that, if possible, this would be most desirable. But I have found it quite impossible either to detect such principle in the wide range of authorities and academic writing to which we were referred or to devise any such principle de novo. The truth of the matter is that statutory duties now exist over such a wide range of diverse activities and take so many different forms that no one principle is capable of being formulated applicable to all cases”
“There are, however, a few remarks that I would wish to make about negligence and statutory duties and powers. This is a subject of great complexity and very much an evolving area of the law. No single decision is capable of providing a comprehensive analysis. It is a subject on which an intense focus on the particular facts and on the particular statutory background, seen in the context of the contours of our social welfare state, is necessary.”
“The test of tortious liability in negligence for pure financial loss The parties were agreed that the authorities disclosed three tests which have been used in deciding whether a defendant sued as causing pure economic loss to a claimant owed him a duty of care in tort. The first is whether the defendant assumed responsibility for what he said and did vis-à-vis the claimant, or is to be treated by the law as having done so. The second is commonly known as the threefold test: whether loss to the claimant was a reasonably foreseeable consequence of what the defendant did or failed to do; whether the relationship between the parties was one of sufficient proximity; and whether in all the circumstances it is fair, just and reasonable to impose a duty of care on the defendant towards the claimant (what Kirby J in Perre v Apand Pty Ltd [1999] HCA 36,(1999) 198 CLR 180 , para.259, succinctly labelled “policy”). Third, is the incremental test, based on the observation of Brennan J in Sutherland Shire Council v Heyman(1985) 157 CLR 424 , 481, approved by Lord Bridge of Harwich in Caparo Industries plc v Dickman[1990] 2 AC 605 , 618, that “It is preferable, in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a pima fade duty of care restrained only by indefinable “considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed”
“Direct liability and vicarious liability In certain of the appeals before the House, the local authorities are alleged to be under a direct duty of care to the plaintiff not only in relation to the exercise of a statutory discretion but also in relation to the operational way in which they perform that duty. This allegation of direct duty of care owed by the authority to the plaintiff is to be contrasted with those claims which are based on the vicarious liability of the local authority for the negligence of its servants, i.e. for the breach of a duty of care owed by the servant to the plaintiff, the authority itself not being under any relevant duty of care to the plaintiff. Thus, in the Newham case the plaintiffs’ case is wholly based on allegations that two professionals, a social worker and a psychiatrist, individually owe professional duties of care to the plaintiff for the breach of which the authorities as their employers are vicariously liable. It is not alleged that the authorities were themselves under a duty of care to the plaintiff. This distinction between direct and vicarious liability can be important since the authority may not be under a direct duty of care at all or the extent of the duty of care owed directly by the authority to the plaintiff may well differ from that owed by a professional to a patient. However, it is important not to lose sight of the fact that, even in the absence of a claim based on vicarious liability, an authority under a direct duty of care to the plaintiff will be liable for the negligent acts or omissions of its servant which constitute a breach of that direct duty. The authority can only act through its servants. The position can be illustrated by reference to the hospital cases. It is established that those conducting a hospital are under a direct duty of care to those admitted as patients to the hospital (I express no view as to the extent of that duty). They are liable for the negligent acts of a member of the hospital staff which constitute a breach of that duty, whether or not the member of staff is himself in breach of a separate duty of care owed by him to the plaintiff... Therefore in the cases under appeal, even where there is no allegation of a separate duty of care owed by a servant of the authority to the plaintiff, the negligent acts of that servant are capable of constituting a breach of the duty of care (if any) owed directly by the authority to the plaintiff’. He summarised the relevant enquiry to be conducted as follows (740): “Summary In accordance with the principles I have discussed, I propose to approach each of these cases as follows. I will consider first (if such claim is advanced) whether the statutory provisions by themselves give rise to a private law claim in damages (category A). I will turn then to consider whether in each case there is a common law duty of care owed to the plaintiff. I will consider the following matters in turn, to the extent that they are relied upon. (1) Direct duty of care owed by the local authority (a)Is the negligence relied upon negligence in the exercise of a statutory discretion involving policy considerations: if so the claim will pro tanto fail as being non-justiciable; (b) were the acts alleged to give rise to the cause of action within the ambit of the discretion conferred on the local authority; if not (c) is it appropriate to impose on the local authority a common law duty of care? (2) Vicarious liability of the local authority (a) Is the duty of care alleged to be owed by the servant of the local authority consistent with the proper performance of his duties to the local authority; if so (b) is it appropriate to impose on the servant the duty of care alleged?” (a)Is the negligence relied upon negligence in the exercise of a statutory discretion involving policy considerations: if so the claim will pro tanto fail as being non-justiciable; (b) were the acts alleged to give rise to the cause of action within the ambit of the discretion conferred on the local authority; if not (c) is it appropriate to impose on the local authority a common law duty of care? (a) Is the duty of care alleged to be owed by the servant of the local authority consistent with the proper performance of his duties to the local authority; if so (b) is it appropriate to impose on the servant the duty of care alleged?” 76.In Stovin v Wise[1996] AC 923 the House of Lords addressed the interrelationship between claims for breach of statutory duty and for breach of a common law duty of care in a statutory context. In his dissenting speech at 934 Lord Nicholls of Birkenhead framed the issue thus: “The Anns principle has to cope with a complication absent from other landmark decisions such as Donoghue v Stevenson[1932] AC 562 and Hedley Byrne v Heller & Partners Ltd[1964] AC 465 . Typically, although not necessarily, the effect of an application of the Anns principle will be to bring home against an authority a liability for damages for failure to perform public law obligations created by statute. Thus in the case, unlike in Donoghue v Stevenson and the Hedley Byrne case, it is necessary to consider the legislative intention. Resort to Anns is not required when Parliament created a statutory duty and also, expressly or impliedly, a cause of action for breach of the duty. The problem only arises outside the area where Parliament has willed that the individual shall have a remedy in damages. This gives rise to the difficulty of how much weight should be accorded the fact that, when creating the statutory function, the legislature held back from attaching a private law cause of action. The law must recognise the need to protect the public exchequer as well as private interests.”
“Since the will of the legislature is paramount in this field, the common law should not impose a concurrent duty inconsistent with this framework. A common law duty must not be inconsistent with the performance by the authority of its statutory duties and powers in the manner intended by Parliament, or contrary in any other way to the presumed legislative intention”
“Whether a statutory duty gives rise to a private cause of action is a question of construction: see Reg v Deputy Governor of Parkhurst Prison, ex parte Hague[1992] 1 AC 58 . It requires an examination of the policy of the statute to decide whether it was intended to confer a right to compensation for breach. Whether it can be relied upon to support the existence of a common law duty of care is not exactly a question of construction, because the cause of action does not arise out of the statute itself but the policy of the statute is nevertheless a crucial factor in the decision. As Lord Browne-Wilkinson said in X(Minors) v Bedfordshire County Council[1995] 2 AC 633 , 7390 in relation to the duty of care owed by a public authority performing statutory functions: “The question whether there is such a common law duty and if so its ambit, must be profoundly influenced by the statutory framework within which the acts complained of were done”
“Since the existence of the statutory power is the only basis upon which a common law duty was claimed to exist, it seemed to be relevant to ask whether, in conferring such powers, Parliament could be taken to have intended to create such a duty. If a statute actually imposes a duty, it is well settled that the question of whether it was intended to give rise to a private right of action depends on the construction of the statute... If the statute does not create a private right of action, it would be, to say the least, unusual if the mere existence of the statutory duty could generate a common law duty of care. For example, in O’Rourke v Camden London Borough Council[1998] AC 188 a homeless person sued for damages on the ground that the council had failed in its statutory duty to provide him with accommodation. The action was struck out on the ground that the statute did not create a private law right of action... In the absence of a right to sue for breach of the statutory duty itself, it would in my opinion have been absurd to hold that the council was nevertheless under a common law duty to take reasonable care to provide accommodation for homeless persons whom it could reasonably foresee would otherwise be reduced to sleeping rough. (Compare Stovin v Wise[1996] AC 923 , 952-953). And the argument would in my opinion have been even weaker if the council, instead of being under a duty to provide accommodation, merely had a power to do so”
“Speaking for myself, I find it difficult to imagine a case in which a common law duty can be founded simply upon the failure (however irrational) to provide some benefit which a public authority has power (or a public law duty) to provide”
“My Lords, I must make it clear that this appeal is concerned only with an attempt to impose upon a local authority a common law duty to act based solely on the existence of a broad public law duty. We are not concerned with cases in which public authorities have actually done acts or entered into relationships or undertaken responsibilities which give rise to a common law duty of care. In such cases the fact that the public authority acted pursuant to a statutory power or public duty does not necessarily negative the existence of a duty. A hospital trust provides medical treatment pursuant to the public law duty in the 1977 Act, but the existence of its common law duty is based simply on its acceptance of a professional relationship with the patient no different from that which would be accepted by a doctor in private practice. The duty rests upon a solid, orthodox common law foundation and the question is not whether it is created by the statute but whether the terms of the statute (for example, in requiring a particular thing to be done or conferring a discretion) are sufficient to exclude it”
“I respectfully agree with these passages from [Lord Hoffmann’s] judgment in Stovin v Wise. Indeed, I would be inclined to go further. In my opinion, if a statutory duty does not give rise to a private right to sue for breach, the duty cannot create a duty of care that would not have been owed at common. law if the statute were not there. If the policy of the statute is not consistent with the creation of a statutory liability to pay compensation for damage caused by a breach of statutory duty, the same policy would, in my opinion, exclude the use of the statutory duty in order to create a common law duty of care that would be broken by a failure to perform the statutory duty. I would respectfully accept Lord Browne-Wilkinson’s comment in X (Minors) v Bedfordshire County Council at p.739 that “the question whether there is such a common law duty and if so its ambit, must be profoundly influenced by the statutory framework within which the acts complained of were done”
“If a duty would exist where advice was given other than pursuant to the exercise of statutory powers, such duty of care is not excluded because the advice is given pursuant to the exercise of statutory powers. This is particularly important where other remedies laid down by the statute (e.g. an appeals review procedure) do not in themselves provide sufficient redress for loss which has already been caused. Where, as in Pamela’s case, a person is employed by a local education authority to carry out professional services as part of the fulfilment of the authority’s statutory duty, it has to be asked whether there is any overriding reason in principle why (a) that person should not owe a duty of care (the first question) and (b) why, if the duty of care is broken by that person, the authority as employer or principal should not be vicariously liable (the second question). I accept that, as was said in X (Minors) v Bedfordshire County Council[1995] 2 AC 633 , there may be cases where to recognise such a vicarious liability on the part of the authority may so interfere with the performance of the local education authority’s duties that it would be wrong to recognise any liability on the part of the authority. It must, however, be for the local authority to establish that: it is not to be presumed and I anticipate that the circumstances where it could be established would be exceptional. As to the first question, it is long and well-established, now elementary, that persons exercising a particular skill or profession may owe a duty of care in the performance to people who it can be foreseen will be injured if due skill and care are not exercised, and if injury or damage can be shown to have been caused by the lack of care. Such duty does not depend on the existence of any contractual relationship between the person causing and the person suffering the damage. A doctor, an accountant and an engineer are plainly such a person. So in my view is an educational psychologist or psychiatrist and a teacher including a teacher in a specialised area, such as a teacher concerned with children having special educational needs. So may be an education officer performing the functions of a local education authority in regard to children with special educational needs. There is no more justification for a blanket immunity in their cases than there was in Capital & Counties plc v Hampshire County Council[1997] QB 1004 . I fully agree with what was said by Lord Browne-Wilkinson in the X (Minors) case[1995] 2 AC 633 , 766 that a head teacher owes “a duty of care to exercise the reasonable skills of a headmaster in relation to such [sc a child’s] educational needs” and a special advisory teacher brought in to advise on the educational needs of a specific pupil, particularly if he knows that his advice will be communicated to the pupil’s parents, “owes a duty to the child to exercise the skill and care of a reasonable advisory teacher”
“Since the authority can only act through its employees or agents, and if they are negligent vicarious liability will arise, it may rarely be necessary to invoke a claim for direct liability”. 79.Further guidance was given in Carty v Croydon London Council[2005] 1 WLR 2312 at 2326-2328 by Dyson LJ: “In my judgment, the decision in Gorringe’s case provides no support for the broad proposition advanced by Mr Ross. The question whether there can be a common law duty of care where there is no private law right to claim damages for breach of statutory duty does not admit of a blanket answer. There may be aspects in the role of an education officer which involve consultation or advice in respect of policy matters. It may be that, in respect of decisions taken in the performance of this part of an education officer’s role, his or her activities would be nonjusticiable. So too, a claim for damages for the careless failure to perform a statutory duty would not lie, because Parliament did not intend to confer on individuals the right to bring claims for damages for breach of statutory duty. That is why the mere fact that Mr McCormack failed to make a formal reassessment of the Claimant’s needs in accordance with the specific requirements of regulation 9 of the 1983 Regulations cannot give rise to a private law claim (for breach of statutory duty or negligence). But where an education officer, in the performance of his or her statutory functions, enters into relationships with or assumes responsibilities towards a child, then he or she may owe a duty of care to that child. Whether such a duty is in fact owed will depend on the application of the Caparo test... Mr Ross advances a number of reasons why we should hold that education officers do not owe a duty of. care to the children whose educational interests they are employed to serve. First he submits that an education officer is not a “professional” person, and that for this reason the principles enunciated in Barrett’s case[2001] 2 AC 550 and Phelps’ case[2001] 2 AC 619 have no application. There can only be vicarious liability for the acts and omissions of a professional person, whose conduct can be judged by the application of the Bolam test. He submits that an education officer performs an administrative function, which is different in kind from, for example, that of a professional person such as (in the field of education) an educational psychologist or teacher in the field of education, and a social worker (in the field of the social welfare of children). Unlike these professional persons, education officers have no professional qualifications and are not regulated by a professional body. Education officers are more akin to civil servants. I would hold that education officers who perform the statutory functions of local education authorities are professional persons for whose negligence authorities may be vicariously liable just as they may be liable for the acts and omissions of education psychologists and teachers. The phrase “professional person” is not a term of art. In M v Newham Borough Council (reported as X (Minors) v Bedfordshire County Council[1995] 2 AC 633 , Sir Thomas Bingham MR said, at p.666: “Those who engage professionally in social work bring to their task skill and expertise the product partly of training and partly of experience, which ordinary uninstructed members of the public are bound to lack, I have no doubt that they should be regarded as members of a skilled profession. Their task is one of immense difficulty, and frequently they are exposed to unjust criticism; but both those things may, to a greater or lesser extent be said of other professionals also.”
“One of my concerns in this developing area of the law.., is that it is all too easy, as apparently happened in some aspects of the presentation of this case at trial, to slip into the fallacy that an education officer owes a duty of care to a child because (a) under the 1981 Act the local education authority has duties and discretions in relation to children with special educational needs and (b) the education officer is employed by the authority to perform functions relevant to the performance of the statutory duties and discretions. This approach would produce a kind of circular vicarious liability in reverse: an education officer, through whom a local education authority performs its statutory functions, might, by use of the tort of negligence, be made personally liable for the failings of the authority. As employer, the authority would then be vicariously liable for the tort of negligence Committed by the education officer in the course of his employment. As Gibbs J pointed out the result would be to introduce by the backdoor an action for breach of statutory duty in a case where, as here, it was agreed that no cause of action for breach of statutory duty was created by the relevant legislation. The authorities draw an important distinction. On the one hand there are the established grounds of liability in private law for advice negligently given, or not given, by an individual possessing professional skills. The duty of care may arise out of a special relationship, which may exist in a statutory as well as in a non-statutory setting. The duty is owed to the other person in the relationship who claims to have suffered non-physical damage and loss as a result of the negligent exercise of those skills. On the other hand, the courts have firmly rejected the notion that in a case where, as here, it is accepted that there is no cause of action for breach of statutory duty, it is sufficient for the purposes of establishing common law liability in negligence to show that an employee of a public authority, such as an education officer, has not performed, or has not properly exercised, relevant statutory obligations and discretions of the public authority.”
“I do not think that the notion of assumption of responsibility, even on an objective approach, can aptly be applied to the situation which arose between the Commissioners and the Bank on notification to it of the orders. Of course it was bound by law to comply. But it had no choice”
“In this case the Appellant Bank has not, in any meaningful sense, made a voluntary assumption of responsibility. It has by the freezing order had responsibility thrust upon it”
“This brings me back to what is in my opinion the determinative factor in this case, that is the absence of any real voluntary aspect to the involvement of a third party such as the bank in relation to a claimant’s freezing order such as the present. Al-Kandari is a quite different case to the present, since the specific task was there voluntarily undertaken. In White v Jones and Dean v Allin & Watts the solicitors also acted voluntarily on their clients’ instructions, although the scope of their resulting duty was extended to third parties for whose benefit they so acted. In Spring v Guardian Assurance plc the relevant regulatory regime did no more than impose an obligation to obtain and give a reference of a familiar type which a former employer would commonly give, irrespective of any compulsion. It would have been incongruous if a duty of care was owed, when such a reference was not given under compulsion, but was absent just because it was. Further, if the reference had been unduly favourable, the recipient’s reliance on it would have introduced an element bringing the situation close to that in Hedley Byrne and it would have been strange if a duty were not also owed to the subject of an unduly unfavourable reference (cf. Lord Goff at p.321F). Phelps v Hillingdon London Borough Council is similarly a case where, although the defendant council and its employees were operating in the context of public statutory duties, they were nonetheless providing services which could equally well be and are provided in the private sector, and it would have been surprising if a similar duty of care were not owed by those providing them to that owed in the private sector: see per Lord Clyde (at pp.670H-671B). The closest case to the present on which Mr Sales can rely is Ministry of Housing and Local Government v Sharp. But the statutory scheme there was aimed at protecting persons in respect of property purchases and, as far as necessary for that purpose, overriding other proprietary interests. Again, it would have been incongruous if a person relying on such a certificate to his detriment could have a claim because of the closeness of the situation to Hedley Byrne, but the Minister whose cause of action for reimbursement was extinguished had none (cf. per Lord Denning MR at p.268H and Salmon LJ at p.278F-H). I consider that Ministry of Housing and Local Government v Sharp was rightly decided. It was referred to without disapproval in the speeches of Lord Templeman and Lord Griffiths in Smith v Bush (at pp.846D-G and 862F). The result reached was eminently fair, just and reasonable. The role of land registrar was established as a public service to keep accurate records and provide reliable information. The information was to enable buyers to be secure in the property rights they acquired but concomitantly to override other property interests in the public interest in order to achieve this, even though such security and overriding occurred through negligence of the registrar or a clerk fulfilling his function. It would be unjust if no compensation could be obtained for the adverse consequences on property rights of negligence of an official performing such a service in the public interest. There is no analogy between any of these cases and the present”
“As to the likelihood of an authority being over-cautious, I am of the same opinion as Evans U in the Court of Appeal in this case[1998] QB 367 , 380: “I would agree that what is said to be a “policy” consideration, namely, that imposing a duty of care might lead to defensive conduct on the part of the person concerned and might require him to spend time and resources on keeping full records or otherwise providing for self-justification, if called upon to do so, should normally be a factor of little, if any, weight...”. “I would agree that what is said to be a “policy” consideration, namely, that imposing a duty of care might lead to defensive conduct on the part of the person concerned and might require him to spend time and resources on keeping full records or otherwise providing for self-justification, if called upon to do so, should normally be a factor of little, if any, weight...”