Harris v Evans [1998] EWCA Civ 709 (24 April 1998)

A bungee jump operator received incorrect advice from a Health and Safety Executive inspector, causing him financial loss. He sued for negligence. The Court of Appeal held that no duty of care was owed for giving such advice in this context.

Facts

The plaintiff, Mr Harris, operated a mobile bungee jumping business. The first defendant, Mr Evans, an inspector for the Health and Safety Executive (HSE), visited the plaintiff’s operation. After observing it, Mr Evans advised the plaintiff that the activity required a licence from the local authority as it constituted a ‘fairground ride’. The local authority subsequently confirmed they would not grant such a licence. Believing he could not operate legally, the plaintiff ceased trading and suffered significant financial loss. It later transpired that the advice given by Mr Evans regarding the licensing requirement was incorrect. The plaintiff brought an action against Mr Evans and the HSE for damages for pure economic loss caused by a negligent misstatement.

Issues

The central legal issue was whether a health and safety inspector, acting in the course of their statutory duties under the Health and Safety at Work etc. Act 1974, owes a common law duty of care to the proprietor of a business being inspected, to avoid causing pure economic loss by giving negligent advice. The court had to determine if it was just, fair, and reasonable to impose such a duty.

Judgment

The Court of Appeal allowed the defendants’ appeal and struck out the plaintiff’s claim. The leading judgment was given by Evans LJ, with whom Aldous LJ and Roch LJ agreed. The court held that no duty of care was owed in these circumstances.

Evans LJ applied the three-stage test from Caparo Industries plc v Dickman, focusing on whether it would be fair, just, and reasonable to impose a duty. He concluded it would not be. The primary reason was the potential for a conflict between the inspector’s statutory duty to protect public safety and a common law duty to protect the commercial interests of the business operator. The court emphasised that the inspector’s role is to be an enforcer of safety standards, not a business advisor.

Reasoning of the Court

Evans LJ reasoned that imposing a duty of care could lead to ‘defensive’ practices by inspectors, who might become unduly cautious, potentially to the detriment of public safety. This was described as a classic ‘overkill’ situation.

To my mind, the duty of care for which the plaintiff contends is a paradigm of the ‘overkill’ situation which the House of Lords has warned against. The primary function, and therefore the primary duty, of the inspector is to the public, whose safety the Act is intended to protect. A second, parallel, duty to the operator, restraining the inspector from causing him financial loss, could, in my view, be inconsistent with the proper performance of the first.

The court distinguished between an inspector giving advice and exercising a statutory power of prohibition. Here, Mr Evans had given advice about a licensing issue, which was not within his direct enforcement powers under the Act. He had not issued a prohibition notice. The court found it was for the plaintiff to verify the licensing position with the relevant authority.

The inspector was not giving advice on a matter within his statutory powers. If a prohibition notice had been served, then the plaintiff would have had a statutory right of appeal to an Industrial Tribunal … The statutory scheme provides its own balance between the interests of the public and of the operator concerned. In my judgment, it would not be appropriate for the common law to impose a duty of care which would disturb that balance.

Ultimately, policy considerations weighed heavily against the imposition of a duty. The court was reluctant to create a situation where a public servant, whose duty is to the public at large, could be held liable for the financial consequences of advice given to a commercial operator.

Implications

The decision in Harris v Evans is a significant authority on the liability of public bodies, particularly regulatory and enforcement agencies. It confirms that, in the absence of a formal assumption of responsibility, such bodies will generally not owe a common law duty of care to avoid causing pure economic loss to the individuals or businesses they regulate. The judgment underscores the judiciary’s reluctance to impose duties that might conflict with the primary statutory functions of public authorities and lead to defensive practices that are not in the public interest. It highlights the importance of the statutory framework and any appeal mechanisms within it as the primary means of redress.

Verdict: The defendants’ appeal was allowed, and the plaintiff’s action was struck out.

Source: Harris v Evans & Anor [1998] EWCA Civ 709 (24 April 1998)