V. Rylands v Fletcher and the Emergence of Enterprise Liability in the Common Law

Transcription

1 V. Rylands v Fletcher and the Emergence of Enterprise Liability in the Common Law Ken Oliphant A. INTRODUCTION Sooner or later, or so it appears, every writer on tort in the common law world falls victim to the condition of rylandsandfletcheritis, whose main symptom is the irresistible compulsion to offer yet another interpretation or re-interpretation of the famous decision. 1 It can hardly be said that the world needs any more. From the time of Holmes and Pollock on, the case has attracted the attention of the greatest common law minds. 2 And the volume of commentary has hardly abated in more recent years. 3 As early as 1911, Bohlen was concerned that another analysis of the case might seem a thrashing out of old straw. 4 So why tax the reader s patience with a further traverse of such familiar territory? The only excuse I can offer is that I believe there still to be new things to say. 1 1 Rylands v Fletcher (1868) Law Reports (LR) 3 House of Lords (HL) See, especially, O.W. Holmes, The Common Law (1881), 116 7; F. Pollock, Duties of Insuring Safety: The Rule in Rylands v. Fletcher (1886) 2 Law Quarterly Review (LQR) 52; F.H. Bohlen, The Rule in Rylands v Fletcher (1911) 59 University of Pennsylvania Law Review (U Pa L Rev) 298, 373 and 423; E.R. Thayer, Liability without Fault (1916) 29 Harvard Law Review (Harv L Rev) 801; P.H. Winfield, Nuisance as a Tort (1931) 4 Cambridge Law Journal (CLJ) 189; F.V. Harper, Liability Without Fault and Proximate Cause (1932) 30 Michigan Law Review (Mich L Rev) 1001; W.L. Prosser, Nuisance without Fault (1942) 20 Texas Law Review (Tex L Rev) 399; C. Morris, Hazardous Enterprises and Risk Bearing Capacity (1952) 61 Yale Law Journal (Yale LJ) 1172; and P. Keeton, Trespass, Nuisance, and Strict Liability (1959) 59 Columbia Law Review (Colum L Rev) See C. Dalton, Losing History: Tort Liability in the Nineteenth Century and the Case of Rylands v Fletcher (unpublished typescript dated 1987); A.W.B. Simpson, Bursting Reservoirs and Victorian Tort Law: Rylands and Horrocks v. Fletcher (1868), in: Leading Cases in the Common Law (1995); G.T. Schwartz, Rylands v Fletcher, Negligence and Strict Liability, in: P. Cane/J. Stapleton (eds.), Essays in Celebration of John Fleming (1998); K. Stanton, The Legacy of Rylands v Fletcher, in: N.J. Mullany/A.M. Linden (eds.), Torts Tomorrow: A Tribute to John Fleming (1998); J. Murphy, The Merits of Rylands v Fletcher (2004) 24 Oxford Journal of Legal Studies (OJLS) 643; and D. Nolan, The Distinctiveness of Rylands v Fletcher (2005) 120 LQR F.H. Bohlen (supra fn. 2), 298.

2 82 Ken Oliphant 2 Interpretations of Rylands v Fletcher have veered, sometimes violently, between two poles. 5 Some consign it to the past, dismissing it as an anachronistic relic of a primitive legal system that has been wholly transformed by the rise of the fault principle. Others see in it a glimpse of the future, specifically, the theory of enterprise liability that shaped much of twentieth-century tort law, especially in the United States of America. This paper seeks to evaluate the competing claims. The thesis it advances is that the old principle of action at peril had not been fully displaced by the fault standard by the 1860s when Rylands v Fletcher was decided, and that the institutional changes in the legal system that were then underway, which culminated in the abolition of the writ system and the forms of action in 1875, 6 required the judges to address for the first time the substantive merits of fault-based and strict liability, and to define the proper role of each. Strict liability was part of a living legal tradition, not a relic of the past. But it was now possible to consider it afresh, and advance new justifications for it to reflect the demands of nineteenth-century industrial society. In legal and political debates around the time that Rylands v Fletcher was decided, an embryonic theory of enterprise liability was developing, and in many ways the case represented the perfect testing ground for it. So was Rylands v Fletcher the first example of enterprise liability in the common law? That is the question I seek to answer at the end of this paper. 3 I take enterprise liability to refer to a cluster of theories which provide a contemporary justification for the imposition of strict liability on those pursuing activities of (usually) a commercial nature. 7 Though the details of different accounts vary, the following may be considered key elements. The starting premise is that the responsibility to compensate is based on the defendant s engagement in a specified activity (the enterprise ) rather than actual fault. Though some accounts consider that the term embraces liabilities where there is legal fault, the attribution of fault in such cases is taken to be something of a 5 See, e.g., C.A. Wright, The Adequacy of the Law of Torts [1961] CLJ 44, 52 ( a storm centre ). 6 On the forms of action and the writ system, see J.H. Baker, An Introduction to English Legal History (4th edn. 2002), ch The classic accounts include: F. James, Contribution among Joint Tortfeasors: A Pragmatic Criticism (1941) 54 Harv L Rev 1156; W.G. Friedmann, Social Insurance and the Principles of Tort Liability (1949) 63 Harv L Rev 241; A.A. Ehrenzweig, Negligence Without Fault: Trends toward an Enterprise Liability for Insurable Loss (1951); C.O. Gregory, Trespass to Negligence to Absolute Liability (1951) 37 Virginia Law Review (Va L Rev) 359; R.E. Keeton, Conditional Fault in the Law of Torts (1959) 72 Harv L Rev 401; G. Calabresi, Some Thoughts on Risk Distribution and the Law of Torts (1961) 70 Yale LJ 499; and J.G. Fleming, The Role of Negligence in Modern Tort Law (1967) 53 Va L Rev 815, especially Important recent contributions include: G.L. Priest, The Invention of Enterprise Liability: A Critical History of the Intellectual Foundations of Modern Tort Law (1985) 14 Journal of Legal Studies (J Leg Stud) 461; V.E. Nolan/E. Ursin, Understanding Enterprise Liability: Rethinking Tort Reform for the Twenty-first Century (1995); R.L. Rabin, Some Thoughts on the Ideology of Enterprise Liability (1996) 55 Maryland Law Review (Md L Rev) 1190; and G.C. Keating, The Theory of Enterprise Liability and Common Law Strict Liability (2001) 54 Vanderbilt Law Review (Vand L Rev) See also American Law Institute, Reporters Study on Enterprise Responsibility for Personal Injury (1991). Much of the literature has focussed on product liability, but that is too big a topic to address here.

3 Rylands v Fletcher and the Emergence of Enterprise Liability 83 fiction consider Ehrenzweig s famous analysis of negligence without fault 8 and to be a second-best solution as compared with strict enterprise liability. 9 In fact, most writers use the term to refer to a strict liability, even [t]he distinctive modern form of strict liability. 10 It is not a liability for wrongdoing, the judicial righting of a wrong more like an overhead operating cost, 11 a licence fee for engaging in hazardous activities, 12 or a disguised form of indirect taxation. 13 The theory recognises that modern industrial technologies and methods of production create risks of injury that we are unable or unwilling to eliminate completely, and exact an inevitable toll on a randomly-selected class of victims. The defendant s activity is admitted to be not only legal, but generally highly desirable: indeed so highly desirable that its utility alone justifies incurring a substantial, if irreducible level of risk. 14 It is above all the nonreciprocal nature of this risk that warrants the imposition of strict liability by way of exception to the predominant fault-based approach, 15 though considerations of social solidarity also often play a role. 16 As enterprise liability carries with it no imputation of wrongdoing, the exclusive remedy is damages, and there is no place for injunctions which expressly prohibit, or effectively require the defendant to desist from, the activity in question. In Calabresi and Melamed s famous formulation, the approach is one based on liability rules rather than property rules. 17 Additionally, most proponents of the theory advocate the limitation of damages to foreseeable risks, both for reasons of fairness to entrepreneurs, who should have fair notice of their potential liabilities when embarking upon (and continuing) their venture, and so as not to deter enterprise. 18 Enterprise liability justifies the imposition of accident costs on the defendant 4 both as a means of loss distribution and because of its deterrent effects. Individual writers may emphasise one of these considerations over the other to 8 A.A. Ehrenzweig (supra fn. 7). Cf. R.E. Keeton s concept of conditional fault (supra fn. 7). 9 See, e.g., J.G. Fleming (supra fn. 7), G.C. Keating (supra fn. 7), 1286 (emphasis added). See also, e.g., C.O. Gregory (supra fn. 7), 383, G. Calabresi (supra fn. 7), C.O. Gregory (supra fn. 7), A.A. Ehrenzweig (supra fn. 7), C.O. Gregory (supra fn. 7), J.G. Fleming (supra fn. 7), See, especially, G.P. Fletcher, Fairness and Utility in Tort Theory (1972) 65 Harv L Rev 537; K.N. Hylton, The Theory of Tort Doctrine and the Restatement (Third) of Torts (2001) 54 Vand L Rev 1413, See, e.g., F. James (supra fn. 7), ; R. Pound, The End of Law as Developed in Legal Rules and Doctrines (1914) 27 Harv L Rev 195, G. Calabresi/A.D. Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral (1972) 85 Harv L Rev This does not preclude the prohibition, whether by injunction or regulation, of activities that present an unreasonable risk of danger, but this is not enterprise liability but an application of the normal fault principle. See R.E. Keeton (supra fn. 7), A.A. Ehrenzweig (supra fn. 7), 52 4; W.L. Prosser, The Assault Upon the Citadel (Strict Liability to the Consumer) (1960) 69 Yale LJ 1099, G. Calabresi (supra fn. 7), 529 finds that liability for unforeseeable losses, though inconsistent with the loss-spreading justification for enterprise, is required by the resource-allocation justification that he prefers.

4 84 Ken Oliphant such an extent, in fact, that it is legitimate to talk of two versions or variants of enterprise liability, one focussed on loss distribution, the other on deterrence or resource allocation. 19 Loss distribution may be contrasted with the cruder theory of loss shifting: 20 whereas the latter contents itself with the search for a deep pocket, 21 the former points to the defendant s ability to spread liability costs by way of adjustments to product pricing, share dividends, wages and salaries, investment in research and development, and the like. 22 It also considers the extent to which the defendant can pool residual financial risks via insurance techniques, whether by purchase from a commercial provider or by the spreading of costs over time (intertemporal, as opposed to interpersonal, loss-distribution). 23 In short, the attraction of enterprise liability is that the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business. 24 The deterrence justification for holding the defendant liable is that prospective liability awards act as an economic incentive to encourage cost-effective investments in safety, and a switch from non-cost-justified activities to those whose benefits outweigh their costs. 25 Though some proponents of economic analysis of law argue that the same, or better, incentive effects can be achieved by the fault principle, 26 enterprise liability theory generally views strict liability as superior because of its ability to affect activity levels as well as marginal safety precautions. 27 As transaction costs and other market imperfections may prevent the parties from achieving the optimal allocation of resources by negotiation and agreement, enterprise liability theory characteristically seeks to mimic the result of market processes 19 See, e.g., G. Calabresi (supra fn. 7), ; G.L. Priest (supra fn. 7), F. James (supra fn. 7), See further R.E. Keeton (supra fn. 7), 405 7; A. Tunc, International Encyclopaedia of Comparative Law, vol XI, Torts (1983), paras ; W.P. Keeton et al., Prosser and Keeton on Torts (5th edn. 1984), 24 5; P. Cane, Atiyah s Accidents, Compensation and the Law (6th edn. 1999), In fact, it is hard to find unequivocal support for the pure loss-shifting thesis, but cf. R. Pound (supra fn. 16), 233: There is a strong and growing tendency, where there is no blame on either side, to ask, in view of the exigencies of social justice who can best bear the loss, and hence to shift the loss by creating liability where there has been no fault. L.W. Feezer, Capacity to Bear Loss as a Factor in the Decision of Certain Types of Tort Cases (1930) 78 U Pa L Rev 805 and (1931) 79 U Pa L Rev 742 is sometimes cited as a proponent, but it is in fact clear that he regarded loss-shifting only as a means of loss-distribution. However, G. Calabresi, The Costs of Accidents: A Legal and Economic Analysis (1970), 40-2 offers a partial defence of the deep pockets approach, arguing that it can be combined with loss-spreading to reduce secondary accident costs further than is possible by pure loss-spreading. (This passage may be compared with G. Calabresi (supra fn. 7), ) 22 C.O. Gregory (supra fn. 7), 383 4, G. Calabresi (supra fn. 7), G. Calabresi (supra fn. 7), 518. See further A.A. Ehrenzweig, Assurance Oblige A Comparative Study (1950) 15 Law & Contemporary Problems Escola v Coca Cola Bottling Co of Fresno (1944) 150 Pacific Reporter. Second Series (P 2d) 436, 441, per Traynor J (considering strict liability for defective products). On Traynor s influence, see further P. Keeton, Roger Traynor and the Law of Torts (1971) 44 Southern California Law Review G. Calabresi (supra fn. 21), ch See, especially, R.A. Posner, A Theory of Negligence (1972) 1 J Leg Stud The classic analysis is S. Shavell, Strict Liability Versus Negligence (1980) 9 J Leg Stud 1 (concluding that strict liability is superior to negligence in this respect in the case of unilateral accidents where only injurer activity levels are relevant).

5 Rylands v Fletcher and the Emergence of Enterprise Liability 85 by placing accident costs on the party who derives the chief benefit from pursuit of the activity in question. Liability rules are a means of internalising what would otherwise be external costs. The origins of the theory of enterprise liability have been much debated. Fleming James, 28 Karl Llewellyn 29 and Leon Green 30 have all be named as decisive influences, and the propagation of the term has been attributed to Ehrenzweig, 31 though I have found it employed as early as Indeed, even earlier writers evidently grasped key aspects of the theory, and employed very similar terminology. Pound wrote in 1914 of placing upon an enterprise the burden of repairing injuries without fault of him who conducts it, which are incident to the undertaking. 33 Going further back in time, to the closing decades of the nineteenth century, we find Oliver Wendell Holmes writing that the modern law of torts was mainly concerned with injuries that were the incidents of certain well known businesses, whose liability in damages sooner or later goes into the price paid by the public. 34 Recognising therefore the loss-distributing effect of tort, he proceeded to identify the underlying issue of public policy: 35 the question of liability, if pressed far enough, is really the question how far it is desirable that the public should insure the safety of those whose work it uses. Holmes also anticipated the modern theory of enterprise liability when he acknowledged that damages may be considered a tax on lawful activity, and not necessarily a remedy for wrongdoing: By G.L. Priest (supra fn. 7), 465. See F. James (supra fn. 7). 29 By J.B. Clutterbuck, Karl Llewellyn and the Intellectual Foundations of Enterprise Liability Theory (1988) 97 Yale LJ By V. Nolan/E. Ursin (supra fn. 7), 30 highlighting in particular Green s two-part article, The Duty Problem in Negligence Cases (1928) 28 Colum L Rev 1014 and (1929) 29 Colum L Rev 255 (see, e.g., 270: The risks of physical harms could be distributed as well as could wages and other costs. ). 31 F. James, Social Insurance and Tort Liability: The Problem of Alternative Remedies (1952) 27 New York University Law Review (NYU L Rev) 537, 540n. It seems that Albert A. Ehrenzweig first used the term in his (anonymous) student note, Loss-Shifting and Quasi-Negligence: A New Interpretation of the Palsgraf case (1941) 8 University of Chicago Law Review (U Chi L Rev 72), 744. This usage was picked up later the same year by Charles O. Gregory in his review of W.L. Prosser s Handbook of the Law of Torts in the same journal: (1941) 9 U Chi L Rev 196, K. Takayanagi, Liability Without Fault in the Modern Civil and Common Law II (1921) 16 Illinois Law Review (Ill L Rev) 268, 270 and passim. From the 1920s onwards, a number of writers also began employing the term entrepreneur theory in connection with vicarious liability: see, e.g., W.O. Douglas, Vicarious Liability and Administration of Risk (1929) 38 Yale LJ 584 and 720, and C. Morris, The Torts of an Independent Contractor (1934) 29 Ill L Rev R. Pound (supra fn. 16), 233. See also E.R. Thayer (supra fn. 2), (who notes (803) that ultimately, like any other overhead charge [liability costs] would fall on the consumer ) and F.H. Bohlen (supra fn. 2), and O.W. Holmes, The Path of the Law (1897) 10 Harv L Rev 457, Ibid. 36 O.W. Holmes (supra fn. 2), 148.

6 86 Ken Oliphant It cannot be inferred, from the mere circumstance that certain conduct is made actionable, that therefore the law regards it as wrong, or seeks to prevent it If we accept the test of liability alone how do we distinguish between conduct which is prohibited, and that which is merely taxed? In fact, many of these ideas were quite familiar by this time, being exactly those that had been advanced by advocates of workers compensation statutes 37 and statutory compensation plans in other areas. 38 Such statutory innovation, it has been claimed, gave a terrific impetus to the recognition of enterprise liability in the common law This paper consists of three principal sections. In the first, I analyse the decision in Rylands v Fletcher to see whether it represented, as some have claimed, merely the application or extension of an existing cause of action, or alternatively a demonstrably new principle of liability. Having come down in favour of the latter interpretation, I then in the second main section of the paper consider the new principle of strict liability in the context of the universallyacknowledged historical trend towards a generalised liability for fault. Although Rylands v Fletcher appeared to some later writers as an anachronism, I argue that strict liability was still a living part of the law at the time, and that the decision can be viewed in part as an attempt to define the proper roles of strict liability and fault in a legal world no longer governed by the old forms of action. Finally, I place the case in the context of an emerging theory of enterprise liability, and explain why it represented in some respects an ideal testing ground for the new theory, before considering what evidence there is to suggest that the judges in Rylands v Fletcher themselves conceived of their decision in enterprise liability terms. B. RYLANDS V FLETCHER (1868) 1. Overview 7 The facts of the case are too well-known to require full restatement here. 40 In brief, the defendants reservoir flooded the plaintiff s mine without fault on their part. The defendants had commissioned the reservoir s construction in order to provide water for their mill. After the work was begun, their contrac- 37 See, e.g., for England, P. Bartrip/S. Burman, The Wounded Soldiers of Industry: Industrial Compensation Policy, (1983) and, for the United States, J.F. Witt, The Transformation of Work and the Law of Workplace Accidents, (1998) 107 Yale LJ See, e.g., A.A. Ballantine, A Compensation Plan for Railway Accident Claims (1916) 29 Harv L Rev 705 (1916). 39 C.O. Gregory (supra fn. 7), 388. See also V.E. Nolan/E. Ursin (supra fn. 7), 21 9 and W.S. Malone, Damage Suits and the Contagious Principle of Workmen s Compensation (1952) 12 Loyola Law Review (Loy L Rev) For a detailed account, using archival material as well as the reports, see A.W.B. Simpson (supra fn. 3).

7 Rylands v Fletcher and the Emergence of Enterprise Liability 87 tors came across certain disused mine-shafts in the reservoir bed and filled them with earth. It seems that the defendants were unaware of their existence at all material times. When the reservoir was filled, one of the shafts burst downwards and the water flowed into abandoned coal workings underneath, which (unbeknownst to everyone) were connected to the plaintiff s mine by underground passages. The flooding ensued. The contractors were negligent, but the general rule of English law then and now is to attribute to the employer only the fault of employees, not independent contractors. For reasons about which we can only speculate, the contractors played no part in the litigation that followed perhaps because they were insolvent and their identity remains unknown. The plaintiff proceeded only against the defendants, from whom he sought damages, and the claim was referred to arbitration. The arbitrator subsequently sought the opinion of the Court of Exchequer as to whether on the facts as he had found them the defendants were liable. By a majority of 2-1, the Court ruled that no liability arose (Baron Bramwell dissenting). 41 On appeal to the Exchequer Chamber, Bramwell s dissent was upheld, and a verdict entered in the plaintiff s favour. 42 Delivering the Exchequer Chamber s judgment, Blackburn J laid down what has become known as the rule in Rylands v Fletcher: 43 We think that the true rule of law is, that the person who, for his own purposes, brings on his land, and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, he is prima facie responsible for all the damage which is the natural consequence of its escape. He can excuse himself by showing that the escape was owing to the plaintiff s default, or, perhaps, that the escape was the consequence of vis major, or the act of God. On the defendants further appeal to the House of Lords, 44 the Law Lords expressly endorsed Blackburn s statement of principle, though Lord Cairns own summary of the relevant law seems to differ from Blackburn s in a number of respects, and is the source of the now generally-accepted requirement that the defendant s use of land must be non-natural. 45 Blackburn nowhere uses this phrase himself, but he does elsewhere in his judgment state the doctrine as applying to the person who has brought something on his own property which was not naturally there, and the phrase non-natural user may be considered Lord Cairns paraphrase of Blackburn s words not naturally there. Neverthe Fletcher v Rylands (1875) 3 Hurlstone & Coltman s Exchequer Reports (H&C) 774, 159 English Reports (ER) Fletcher v Rylands (1866) LR 1 Exchequer Cases (Exch) (1866) LR 1 Exch 265, Rylands v Fletcher (1868) LR 3 HL (1868) LR 3 HL 330, 339. It may be doubted whether Cairns in fact conceived of this as adding anything to Blackburn s statement of principle: see F.H. Newark, Non-Natural User and Rylands v. Fletcher (1961) 24 Modern Law Review (MLR) 557. Further analysis of the nonnatural user requirement may be found in W.T.S. Stallybrass, Dangerous Things and the Non- Natural User of Land (1929) 3 CLJ 376 and D.W. Williams, Non-Natural Use of Land [1973] CLJ 310.

8 88 Ken Oliphant less, non-natural user has come to be regarded as an essential element of the tort, and perhaps its most significant limiting factor Judicial Reasoning 9 A good deal of debate has focused on the question of the decision s true doctrinal basis. To assess the various contentions, it is necessary to consider in some detail the reasoning in each of the three courts that heard the case. a) Court of Exchequer (1965) 10 In the Court of Exchequer, Baron Bramwell (dissenting) would have found for the plaintiff on the basis that he had a right to be free from foreign (i.e. artificially diverted) water, and the defendants had no right to divert it to the plaintiff s land, whether wittingly or unwittingly. 47 In his view, it was not necessary to prove that there had been a trespass, a nuisance or negligence, but he considered that the flooding was in any case both a trespass (because of the physical invasion of the plaintiff s land) and a nuisance. In connection with the latter, he noted that [t]he nuisance is not in the reservoir, but in the water escaping. 48 In neither trespass nor nuisance was it necessary to show negligence. This, he admitted, was the appropriate standard for highway collisions, but only because [w]here two carriages come in collision, if there is no negligence in either it is as much the act of the one driver as of the other that they meet. 49 Where this difficulty of causal attribution did not arise, it seems that he considered liability to be strict: sic utere tuo ut alienum non laedas. 50 In case he had got this wrong, however, Bramwell concluded with the observation that the defendants could be held liable for the tort of their independent contractor, though to him this made no difference on the facts, given his view that the defendants had in any case been acting at their peril The other judges in the Court of Exchequer, whose view prevailed on the day but not in the long run, were opposed to Bramwell in different ways. Baron Martin stated that there was no trespass, because the damage resulting from the defendants acts was consequential rather than immediate, and no nuisance in the sense of something hurtful or injurious to the senses. 52 There being no liability under these specific causes of action, it was necessary to turn to general principle to see if the claim could otherwise be sustained. Martin stated that the general requirement of negligence was well-established in connection with injury to the person and personal property, albeit with certain exceptions, and that he could see no reason why damage to real property should be gov- 46 See, e.g., Cambridge Water Co Ltd v Eastern Counties Leather plc [1994] 2 Appeal Cases (AC) 264, 299 per Lord Goff. 47 (1865) 3 H&C 774, Ibid. 49 (1865) 3 H&C 774, Ibid. 51 (1865) 3 H&C 774, (1865) 3 H&C 774, 792.

9 Rylands v Fletcher and the Emergence of Enterprise Liability 89 erned by a different rule. 53 He also stated that, even if the defendants could be held liable for the negligence of their contractors (which was by no means certain), the allegation of negligence failed for want of proof that the contractors knew or had notice of the underground passages which allowed the water to flow into the plaintiff s mine: How can a man be said to be negligent when he is ignorant of the circumstance which requires the exercise of care? 54 Chief Baron Pollock, delivering the third, decisive judgment, considered that the 12 plaintiff s right to be free from foreign water, if it was a right recognised by the law at all, applied only to surface-water and not to water coming otherwise onto his land. In the absence of relevant authority, the safer course was to find for the defendants. 55 Pollock concluded by stating that the plaintiff had shown neither that the defendants contractors had been negligent, nor that (even if they had been) the defendants should be held responsible for that negligence. 56 b) Exchequer Chamber (1866) In a judgment delivered by Blackburn J, the six judges of the Exchequer Chamber preferred Bramwell s approach in the court below, 57 and stated the principle (set out above 58 ) that has come to be known as the rule in Rylands v Fletcher. On its face, it makes no mention of either trespass or nuisance, or any other specific cause of action, but Blackburn immediately went on to justify the principle in terms which suggest he viewed it as the crystallisation of a number of existing liabilities: 59 The person whose grass or corn is eaten down by the escaping cattle of his neighbour, or whose mine is flooded by the water from his neighbour s reservoir, or whose cellar is invaded by the filth of his neighbour s privy, or whose habitation is made unhealthy by the fumes and noisome vapours of his neighbour s alkali works, is damnified without any fault of his own; and it seems but reasonable and just that the neighbour, who has brought something on his own property which was not naturally there, harmless to others so long as it is confined to his own property, but which he knows to be mischievous if it gets on his neighbour s, should be obliged to make good the damage which ensues if he does not succeed in confining it to his own property. But for his act in bringing it there no mischief could have accrued, and it seems but just that he should at his peril keep it there so that no mischief may accrue, or answer for the natural and anticipated consequences. And upon authority, this we think is established to be the law whether the things so brought be beasts, or water, or filth, or stenches (1865) 3 H&C 774, (1865) 3 H&C 774, (1865) 3 H&C 774, Ibid. 57 Fletcher v Rylands (1866) LR 1 Exch 265, No Fletcher v Rylands (1866) LR 1 Exch 265, 280.

10 90 Ken Oliphant Of the specific causes of action mentioned here as illustrations of Blackburn s general proposition, and analogies to the case before him, the first is the long established but highly special 60 liability for cattle trespass, the second (invasion by filth) an example derived from the case of Tenant v Goldwin, 61 which Blackburn seems also to have considered to be trespass, 62 and the third (fumes and noisome vapours) is clearly nuisance. To these he apparently added another in a later passage of his judgment: the strict liability attaching to the keeper of an animal which he knows to have a vicious propensity (the scienter action) Having set out and justified his principle of strict liability, Blackburn then addressed its role relative to that of negligence. He admitted that there were many cases in which proof of negligence was indeed essential, but stated that they were distinguishable from the case before him: 64 Traffic on the highways, whether by land or sea, cannot be conducted without exposing those whose persons or property are near it to some inevitable risk; and that being so, those who go on the highway, or have their property adjacent to it, may well be held to do so subject to their taking upon themselves the risk of injury from that inevitable danger; and persons who by the licence of the owner pass near to warehouses where goods are being raised or lowered, certainly do so subject to the inevitable risk of accident. In neither case, therefore, can they recover without proof of want of care or skill occasioning the accident; and it is believed that all the cases in which inevitable accident has been held an excuse for what primâ facie was a trespass, can be explained on the same principle, viz., that the circumstances were such as to shew that the plaintiff had taken that risk upon himself. It is evident, then, that Blackburn considered strict liability ( action at peril ) to be the general principle, and liability for negligence the exception justified by the plaintiff s voluntary assumption of the risk of non-negligent injury. He therefore reached the same conclusion as Bramwell as to the correct standard to apply in collision cases but for different reasons. (Bramwell had relied upon the difficulty of causal attribution in the absence of a requirement of fault.) For both of them, however, strict liability was the default position. 60 P.H. Winfield (supra fn. 2), (1704) 2 Lord Raymond s Reports (Ld Raym) 1089, 1 Salkeld s King s Bench Reports 21, 360. In fact, Salkeld (unlike Raymond) reports Chief Justice Holt as deciding on the basis of trespass. 62 See (1866) LR 1 Exch 265, 286 where he adopts the language of Salkeld s report of the decision, saying he whose stuff it is must keep it that it may not trespass. The difficulty with this analysis is that the action was brought in case, not trespass. Cf. Lord Raymond s report, which does not employ the term trespass. Most modern writers consider the case to be correctly regarded as one in private nuisance: see, e.g., R.F.V. Heuston/R.A. Buckley, Salmond & Heuston on the Law of Torts (21st edn. 1996), 53 and A. Dugdale (ed.), Clerk & Lindsell on Torts (18th edn. 2000), Cf. P.H. Winfield (supra fn. 2), 193 ( an innominate [action] upon the case ). 63 (1866) LR 1 Exch 265, (1866) LR 1 Exch 265,

11 Rylands v Fletcher and the Emergence of Enterprise Liability 91 The Court s reasoning made it unnecessary to address the question of the defendants liability for the negligence of their contractors. 65 c) House of Lords (1868) Only two members of the House of Lords are identified in the report: Lord Cairns, the Lord Chancellor (LC), and Lord Cranworth. (A third member of the House had to be present to ensure a quorum, and his identity has stimulated much discussion. He is now believed to have been the Archbishop of Armagh. 66 ) Both Cairns and Cranworth expressly approved Blackburn s statement of the relevant law. 67 As has already been noted, Lord Cairns also expressed the principle in his own (rather long-winded) words, introducing the concept of non-natural user. Having stated that the plaintiff could not have complained if the flooding had resulted from the defendants natural user of the land (i.e. its use for any purpose for which it might in the ordinary course of the enjoyment of land be used ), he continued: 68 On the other hand if the Defendants, not stopping at the natural use of their close, had desired to use it for any purpose which I may term a nonnatural use, for the purpose of introducing into the close that which in its natural condition was not in or upon it, for the purpose of introducing water either above or below ground, and if in consequence of their doing so the water came to escape and to pass off into the close of the Plaintiff, then it appears to me that that which the Defendants were doing they were doing at their own peril; and, if in the course of their doing it, the evil arose to which I have referred, the evil, namely, of the escape of the water and its passing away to the close of the Plaintiff and injuring the Plaintiff, then for the consequence of that, in my opinion, the Defendants would be liable. Lord Cranworth, having endorsed Blackburn s statement of the rule, put the general principle in rather wider terms, without any mention of a natural user exception: 69 In considering whether a Defendant is liable to a Plaintiff for damage which the Plaintiff may have sustained, the question in general is not whether the Defendant has acted with due care and caution, but whether his acts have occasioned the damage [T]he doctrine is founded on good sense. For when one person, in managing his own affairs, causes, however innocently, damage to another, it is obviously only just that he should be the party to suffer. He is bound sic uti suo ut non lædat alienum (1866) LR 1 Exch 265, See R.F.V. Heuston, Who was the Third Lord in Rylands v Fletcher? (1970) 86 LQR Rylands v Fletcher (1868) LR 3 HL 330, (1868) LR 3 HL 330, (1868) LR 3 HL 330, 338.

12 92 Ken Oliphant Like Bramwell and Blackburn, then, he considered strict liability to be the general rule, and liability for negligence the exception. The same cannot be said of Cairns who, in his formulation of the applicable principles, drew a distinction between natural and non-natural uses of land in such a way as to make the former appear the usual rule, and the latter (where strict liability applied) the exceptional case. 18 The question of the defendants liability for their contractor s negligence was not at issue in the House of Lords. 3. Analysis a) The Application or Extension of Pre-existing Principle? 19 The first question to address is whether liability under Rylands v Fletcher is an application of a pre-existing principle, even if by means of an extension of a recognised cause of action, or a new and independent liability. The former interpretation has been advanced by those who have been keen to minimize the case s impact. Five possible bases of liability may be considered. (i) Trespass 20 Trespass was expressly relied upon by Baron Bramwell in the Court of Exchequer, 70 and parts of Blackburn s judgment in the Court of Exchequer Chamber provide a measure of support for the view that the liability was essentially one for trespass. Of the three illustrative cases he refers to in support of his rule, two may be considered trespass. However, both are problematic: cattle trespass has always been considered a case apart the law of torts has grown up historically in separate compartments and beasts have travelled in a compartment of their own 71 while (as we have noted) it is far from certain that the case of the escaping filth, Tenant v Goldwin, is properly considered a case of trespass, rather than nuisance. 72 In fact, throughout his judgment, Blackburn seems to employ the term trespass rather more loosely than (say) Baron Martin in the Court of Exchequer. Later writers, however, have tended to side with Martin over both Bramwell and Blackburn on this point, finding the facts of the case to fall the wrong side of the direct/consequential borderline, 73 though Bohlen has noted how narrow the point at issue actually was: Cf. Nichols v Marsland (1875) LR 10 Exch 255, 260 where he described Rylands v Fletcher as a case where the defendant poured the water into the plaintiff s mine without actually using the term trespass. It appears that he preferred pour to escape because the latter misleadingly suggested that water was an active agent: Carstairs v Taylor (1871) LR 6 Exch 217, Read v J Lyons & Co Ltd [1947] AC 156, 182 per Lord Simonds. The former common law liability has now been abolished and replaced with a statutory claim under Animals Act 1971, sec See no. 13 above. 73 See, e.g., F.H. Bohlen (supra fn. 2), 311 3; J.G. Fleming, The Law of Torts (9th edn. 1998), 375. Cf. P. Keeton (supra fn. 2), 474 (not trespass because the invasion was unintentional). Most of the other leading texts do not even consider the possibility that trespass might be the basis of the cause of action. 74 F.H. Bohlen (supra fn. 2), 311.

13 Rylands v Fletcher and the Emergence of Enterprise Liability 93 Had the earth in the shaft given way as soon as the water was poured into the reservoir, instead of resisting the pressure for a few days, the injury would have been direct and the defendant admittedly liable in trespass. Quite apart from these considerations, the structure of Blackburn s judgment as a whole shows that he cannot have treated trespass as the underlying basis of liability: the third illustration he gives of his general principle pollution by fumes from an alkali works is clearly a case of nuisance rather than trespass. (ii) Nuisance Conceding pollution by fumes to be nuisance, what of Blackburn s two other 21 illustrations, that we have until now assumed to be cases of trespass? In fact, the case of invasion by filth, Tenant v Goldwin, is regarded by most commentators as in reality a case of nuisance, rather than trespass, and (at a stretch) cattle trespass could also be so considered, though its juristic roots are different. 75 Yet neither Blackburn nor the Law Lords at any point employed the term nuisance. Nevertheless, the view that nuisance was the true basis of the liability in Rylands v Fletcher has been advanced by such distinguished commentators as Prosser 76 and Newark. 77 It has also received considerable judicial support, most notably in two recent decisions of the House of Lords, Cambridge Water Co v Eastern Counties Leather Plc 78 and Transco plc v Stockport Metropolitan Borough Council. 79 In the first of these decisions, Lord Goff expressly approved Newark s view that Rylands v Fletcher was a simple case of nuisance, which merely affirmed that negligence is not an element in the tort of nuisance, its only novelty lying in its application of the tort to a single, isolated escape from the defendant s land. 80 However, if the liability under Rylands v Fletcher is indeed a species of nuisance, 81 it is substantially distinct from nuisance as commonly understood, 22 and the better view is that (private) nuisance and the liability under Rylands v Fletcher should be regarded as separate causes of action. Indeed in 1931 Winfield went so far as to identify nine differences between the two heads of claim, 82 and, even if not all remain convincing today, it is still possible to identify a number of incontrovertible points of distinction, notably the re- 75 See no. 20 above. 76 Supra fn The Boundaries of Nuisance (1949) 65 LQR [1994] 2 AC [2004] 2 AC F.H. Newark (supra fn. 77), 487 8, cited approvingly by Lord Goff at [1994] 2 AC 264, 298. See also Transco plc v Stockport Metropolitan Borough Council [2004] 2 AC 1, 7 per Lord Bingham, and 15 and 17 per Lord Hoffmann. Dalton has disputed whether liability in nuisance for a single isolated escape really was novel: supra fn. 3, 148n. 81 As F.H. Bohlen too was prepared to accept: supra fn. 2, P.H. Winfield (supra fn. 2), G.W. Paton, Liability for Nuisance (1942) 37 Ill L Rev 1, 3 and W.A. Seavey, Nuisance: Contributory Negligence and Other Mysteries (1952) 65 Harv L Rev 984, also endeavour to distinguish the two liabilities.

14 94 Ken Oliphant quirement of escape under Rylands v Fletcher, which has no analogue in nuisance, 83 and the concept of non-natural use of land which, in nuisance, becomes the requirement of unreasonable interference with land. This shifts the focus from the defendant s use of land, considered in isolation, to the reasonableness of his interference with the claimant s land, which requires an evaluation of both his conduct and the extent of the interference. 84 Even more significantly, it introduces an evaluative element by substituting unreasonable for non-natural, with the result that a nuisance can be considered a wrong which is prima facie to be prohibited by injunction, 85 whereas under Rylands v Fletcher the defendant s non-natural user was a nuisance as it were held in suspense, not of itself unlawful, and so preventable by legal process, or actionable until harm actually results from it. 86 Given these differences, it is understandable that modern textbooks persist in treating the two liabilities in separate chapters, 87 and that recent contributions to the journal literature have argued for the distinctiveness of liability under Rylands v Fletcher. 88 (iii) Sic utere tuo ut alienum non lædas 23 In the Court of Exchequer, one of the express bases of Baron Bramwell s judgment in favour of the plaintiff was the principle expressed by the Latin maxim, 89 and Lord Cranworth also expressly relied upon it in the House of Lords. 90 There is also later support for the view that this is the true principle of Rylands v Fletcher. In Rickards v Lothian, for example, Lord Moulton stated that the case was nothing other than an application of the old maxim Sic utere tuo ut alienum non lædas, 91 and this was also accepted in several other decisions of the time. 92 However, Blackburn in the Exchequer Chamber at no 83 Private nuisance normally involves something emanating from the defendant s land (Hunter v Canary Wharf Ltd [1997] 655, 685 per Lord Goff) but this is not a necessary element of the tort: see, e.g., L.E. Jones (Insurance Brokers) Ltd v Portsmouth City Council [2003] 1 Weekly Law Reports (WLR) G. Williams/B. Hepple, Foundations of the Law of Tort (2nd edn. 1984), Cf. J. Murphy (supra fn. 3), Pride of Derby and Derbyshire Angling Association Ltd v British Celanese Ltd [1953] Law Reports, Chancery Division, 3rd Series (Ch) F.H. Bohlen (supra fn. 2), 431. Cf. W.L. Prosser (supra fn. 2), who viewed the liability for absolute nuisance under Rylands v Fletcher (420) as distinguishable from intentional and negligent nuisances. W.A. Seavey (supra fn. 82), however, uses absolute nuisance to refer to the intentional creation of a dangerous condition (991). 87 See, e.g., R.F.V. Heuston/R.A. Buckley (supra fn. 62); W.V.H. Rogers, Winfield & Jolowicz on Tort (16th edn. 2002); J. Murphy, Street on Torts (11th edn. 2003). In Australia, J.G. Fleming (supra fn. 73) kept a separate chapter for Rylands v Fletcher even after the High Court declared the principle to have been absorbed by the ordinary law of negligence (Burnie Port Authority v General Jones Pty Ltd (1994) 179 Commonwealth Law Reports (CLR) 520). 88 J. Murphy (supra fn. 3), 669; D. Nolan (supra fn. 3). 89 (1865) 3 H&C 774, (1868) LR 3 HL 330, [1913] AC 263, 275 per Lord Moulton. 92 See, e.g, Crowhurst v Amersham Burial Board (1878) 4 Exchequer Division (Ex D) 5, 11 per Kelly CB; Snow v Whitehead (1882) 27 Chancery Division, 2nd Series (Ch D) 588, 591 per Kay J; Musgrove v Pandelis [1919] 2 King s Bench (KB) 43, 47 per Bankes LJ, 49 per Warrington LJ and 51 per Duke LJ.

15 Rylands v Fletcher and the Emergence of Enterprise Liability 95 point used the Latin phrase himself. Though the English version every one must so use his own as not to do damage to another appears twice in his judgment, both instances are in the same long quotation from Lord Raymond s report of Holt CJ s opinion in Tenant v Goldwin, 93 which Blackburn dealt with at length only to correct Martin s misrepresentation of the case in the court below. 94 Having done so, he was careful to formulate his own rule in narrower terms, limiting it to things the defendant brings and keeps on his land: he who brings and keeps anything on his premises, must at his peril prevent it from getting on his neighbour s, or make good all the damage which is the natural consequence of its doing so. 95 Whether sic utere can meaningfully act as the underlying principle of strict liability may in any case be doubted. It provides no grounds for distinguishing 24 those acts or uses that give rise to strict liability and those which do not, and it is inaccurate in so far as it suggests that all damage resulting from the defendant s use of his land is actionable. 96 (I take as read the impossibility of general strict liability. 97 ) In fact, it is not clear that sic utere necessarily embodies an absolute obligation at all, rather than one of reasonable care. Even if one assumes it expresses a strict liability, the difficulty still remains that it appears to express the conclusion that strict liability ought to be imposed, rather than the grounds on which the conclusion is reached. 98 (iv) Liability for Contractors Negligence In his analysis of Rylands v Fletcher and Liability without Fault, Thayer submitted that [t]he true statement of the case is that the law charges the defendant with a non-delegable duty. 99 More recently, the majority of the High Court of Australia, in a collegiate judgment, has sought to assimilate liability under Rylands v Fletcher under the ordinary law of negligence on the basis of a non-delegable duty of care owed by those who store dangerous substances or allow dangerous activities on their premises. 100 Whether this reliance (1704) 2 Ld Raym 1089, (1866) LR 1 Exch 265, Ibid., 285. Cf. Lord Cairns distinction between natural and non-natural users: no. 16 above. 96 Sedleigh-Denfield v O Callaghan [1940] AC 880, 903 per Lord Wright, criticised by D.R. Coquillette, Mosses From an Old Manse: Another Look at Some Historic Property Cases About the Environment (1979) 64 Cornell Law Review (Cornell L Rev) 761, 781 who argues that sic utere only came into play once it had been established that the plaintiff had suffered actionable damage, and was simply designed to prevent the defendant excusing himself on grounds of social utility. 97 S.R. Perry, The Impossibility of General Strict Liability (1988) 1 Canadian Journal of Law & Jurisprudence 147. See also P.H. Winfield, The Myth of Absolute Liability (1926) 42 LQR 37, 38. Cf. G. Calabresi (supra fn. 21), D. Ibbetson, A Historical Introduction to the Law of Obligations (1999), 106. For further analysis, see C. Dalton (supra fn. 3), E.R. Thayer (supra fn. 2), 808 and 809. See also F. Pollock (supra fn. 2), 55 56; F.H. Bohlen (supra fn. 2), 299n; P.H. Winfield (supra fn. 2), Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520, 35 42, per Mason CJ and Deane, Dawson, Toohey and Gaudron JJ.

16 96 Ken Oliphant upon a non-delegable duty is ordinary may perhaps be doubted. Still, it is quite clear that Rylands v Fletcher was not in fact decided on the basis of the defendants responsibility for their contractors negligence: Blackburn in the Exchequer Chamber stated expressly that it was unnecessary to consider the issue, given his finding for the plaintiff on other grounds, 101 and the matter was not even considered by the House of Lords. 102 It seems therefore unnecessary to pursue this interpretation of the decision any further. (v) Personal Negligence 26 Even more transparently contrary to the evidence of the judgments themselves, it has been suggested that the case is best regarded as an example of liability for personal negligence, because non-natural and ultra-hazardous activites are inherently faulty, the fault being found not in the manner of doing, but in the very doing itself. 103 However, whether or not there is any great difference between the two approaches in the practical result, which Thayer was inclined to doubt, 104 whether or not negligence might have been found on the facts of the case (e.g. under the doctrine of res ipse loquitur), as suggested by Jeremiah Smith, 105 and whether or not it would be advisable to reclassify the liability as one arising in negligence, as the High Court of Australia has quite recently done, 106 it is quite clear that both Blackburn and the House of Lord were imposing a liability without fault, hence their frequent use of the terminology of action at peril. It may perhaps be the case that, had the law of negligence been more developed than it was at the time, they would have seen no need to invoke a rule of strict liability, 107 but this only concedes that the liability was perceived by its authors as strict, not one for negligence. Though strict liability may indeed sometimes be imposed because fault is somehow present in the background, 108 it is my argument that Rylands v Fletcher was perceived as a true liability without fault, and not as an indirect way of bringing about the reparation of a wrong. b) A New Tort 27 If the rule in Rylands v Fletcher cannot be fitted into any cause of action previously known to English law, it must be regarded as stating a new principle of liability in fact, a new tort. That the majority of judges who decided the case thought that they were dealing with something new, not covered by existing caselaw, is indicated by a number of remarks in the judgments. In the Court of Exchequer, Bramwell stated that the issue arising was singularly 101 (1866) LR 1 Exch 265, See no. 18 above. 103 See, e.g., J.L. Coleman, Risks and Wrongs (1992), E.R. Thayer (supra fn. 2), J. Smith, Tort and Absolute Liability Suggested Changes in Classification III (1917) 30 Harv L Rev 409, 410 and 414n. 106 Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR J. Smith (supra fn. 105), See no. 68 below.