The Gazette 1971

in risk-taking activities, such as motor car driving, at a

reasonable cost to society if the funds at present poured

into commercial insurance are used to their full potential.

The strict liability which law first imposed was, how-

ever, far too costly for the society in which it functioned.

Every subject injured had a right to compensation pro-

vided the cause of the injury could be determined.

Finding the liability too wide and influenced by the

theories of causation of the canon law, the common law

judges sought to curtail this unrestricted liability. They

found a solution in limiting liability to injury caused

intentionally or negligently while preserving the rule of

strict liability for the activities of those of a common

calling, such as innkeepers and carriers.

The potential of the law of negligence was not real-

ised until the advent of the industrial revolution—with

the arrival of railways, heavy machinery and eventually

the motor car. It was during this period that the neces-

sity for compensation for loss arising through sickness,

disabling and fatal accidents became apparent. The

growth of the railways meant that a substantial number

of members of the middle class were injured, often

fatally, in railway accidents.

The first of a series of Fatal Accident Acts was intro-

duced in 1846 abolishing the common law rule that

dependants of the fatally injured could not sue the

wrongdoers, and giving dependants a statutory limited

right of action where the breadwinner's death was the

result of a tortious act. As Mr. Ison explained, "The

axiom 'no liability without fault' was quickly raised to

a dogmatic postulate of justice because it was best

calculated to serve the interest of an expanding industry

and a rising middle class."

An ideal opportunity arose with the arrival of the

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motor car to extend strict liability to the custodians of

dangerous things. The rule in

Rylands v Fletcher

im-

posed strict liability for injury caused by the escape of

things or substances from land being put to a non-

natural use. A motor car is a dangerous thing; the

activity of driving is one which involves a high risk of

injury to the public at large, and it is certainly a non-

natural use of the land. A few years later the owner of

a tractor was held liable for injury resulting from the

escape of sparks from his machine.

Strict Liability

Strict liability is no stranger to our legal system. The

law often allows a victim to claim damages for injury

resulting from an injurious breach of statutory regula-

tions. Under the common law keepers of wild animals

are strictly liable for injury caused by the beasts under

their care.

Attempts have been made to impose strict liability

on a driver who, while committing a breach of the

Road Traffic Acts, has injured another, but it did not

succeed in

Phillipps v Britannia Hygienic Laundry Co.

(1923), where the defendants' lorry had been driven on

the road with a defective axle, thereby committing a

breach of the regulations, resulting in an accident

causing damage to the plaintiff.

In 1934 Lord Danesfort tried unsuccessfully to intro-

duce a bill imposing strict liability on the owners of

motor vehicles. The bill was well received and the

Select Committee which examined it thought that the

motor car did fall within the rule in

Rylands v Fletcher

and that the responsibility for injury lay with the motor-

ing community rather than the individual insurer. The

bill was shelved after the completion of the second

reading, partly due no doubt to pressure from insurance

companies and litigating lawyers whose interests were

infringed.

Claims against Insurance Companies

Let us now consider what confronts a motor accident

victim who makes a claim against an insurance company.

A seriously injured victim, having lost the regular

income from his job, is desperately short of money. He

must settle his claim quickly. On the other hand the

insurance company, even if liability is admitted, are

determined to pay a lesser sum and often appear to be

willing to go to court on both the amount of compen-

sation and on the issue of legal liability. The bringing

of proceedings against a reticent insurance company is

an accepted threat to pay up.

Whether the correct compensation is paid or not

depends on who can hold out the longest: the process

is not unlike a game of poker—only a court action will

prove who holds the stronger hand and the decision in

a negligence action cannot always be foretold. The

stakes-are high, for the loser pays the costs of the action

and, even if a plaintiff wins on the issue of legal liability

the court may award lesser damages than were orig-

inally offered by the insurer, which will also land the

plaintiff with the costs.

The task of having to prove fault discourages many

plaintiffs from pursuing their claims. A recent survey in

the United States estimates that 45 per cent of motor

accident victims receive no tort compensation and that

68 per cent of serious accident victims go without com-

pensation due to the absence of fault or to the difficulty

of proving it in court. Plaintiffs often have to tolerate

long delays to the profit of the insurance companies.

Both European and North American statistics agree

that the average time for a serious claim to be settled is

two and a half years.

TheLonger-Term

Savings Plan.

Abreakthrough in

LifeAssurance.