Concurrent Liability and Distinctions

A negligent breach of contract may give rise to concurrent liability: a claim in contract or a claim in tort. Undertake an evaluation of this statement using related case law.

Introduction

This essay will describe the interrelation between the law of tort and the law of contract arising out of claim from breach of contractual and civil duties. Liabilities in contract and in tort arise from different principles of law. This essay will demonstrate the nature of concurrent liability, the situations where liability in tort arises in existence of a contractual relationship between the parties, and simultaneously show the differences between tortious and contractual liability. For students seeking clarity on this complex subject, professional guidance in their law dissertation help offer new insights and support.

How far does concurrent liability stand valid?

A person can claim under the law of contract and/or under the law of tort when he or she is injured and desires to seek compensation. The person cannot recover twice for the same injury, he or she may claim in contract and avoid obstacle to a tort action or vice versa. The contention of whether there could be a tortiuous action where there was a contractual relationship was dealt with in the case of Henderson v Merrett Sundicates Ltd. Lord Goff affirmed the question and stated that there could be concurrent liability in contract and in tort. Principle of concurrent liability was prohibited under French law through its doctrine of non-cumul¸ but not so under the German civil code. In some Commonwealth cases, consideration was given such as was in the case of Central Trust Co v Rafuse where Le Dain J stated that a concurrent liability will not be admired if it permits the plaintiff to circumvent or escape a contractual exclusion or limitation of liability for a tortiuous act. Plaintiff can, subject to this qualification, assert the cause of action advantageous to him. Thus, remorseless expansion of tort negligence is not to be allowed to usurp the place of law of contract.

Tortious liability does not require a contract between the parties. It stems from a breach of a duty fixed primarily by law, the duty of which is towards persons in general. This makes the nature of tortiuous liability in rem. The breach gives rise to remedies such as injunctions and unliquidated damages amongst other remedies. Principles associated with contractual liability are different from those of tortious liability. The doctrine of privity of contract makes the nature of contractual liability in personam. A breach of contractual duty gives rise to liability. Such breach leads to certain remedies, for instance specific performance of contract and liquidated and unliquidated damages. The principle of concurrent liability is applicable when the tortious and contractual liabilities overlap, even though it does not generally occur. It is important to note here that the terms “tortiuous” and “contractual” attribute to their

M.P. Furmston, G.C. Cheshire and C.H.S. Fifoot, Cheshire, Fifoot and Furmston's law of contract (Oxford University Press 2012).
Henderson v Merrett Sundicates Ltd [1994] 3 All ER 506.
Central Trust Co v Rafuse [1986] 33 DLR (4th) 481.
M.P. Furmston, G.C. Cheshire and C.H.S. Fifoot, Cheshire, Fifoot and Furmston's law of contract (Oxford University Press 2012).
Percy H. Winfield, The Province of the Law of Tort (Cambridge University Press 2013).
A Best and D Barnes, Tort Law: Cases, Statutes, and Problems (New York: Aspen Publishers 2007).
Aaron Taylor, ‘Concurrent Duties’ (2019) 82 (1) The Modern Law Review 17- 45.

origins and normative foundations to a duty, as is seen earlier where both the liabilities arise from breach of duties. Legal principles out of the relationship between the parties impose tortious duties justified by the legal intention of protecting the rights of the person to enforce the duty. On the other hand, a legally recognised agreement has its origin to a contractual duty, which has a normative foundation and is justified by the agreement or the promise.

The principle of concurrent liability is not without difficulties. In Henderson v Merrett Syndicates Ltd, Lord Goff stated that the existence of concurrent liability in contract and in tort may be qualified subject to the condition that tort liability would not lie in circumstances where there was an agreement between the parties to limit or exclude such liability by contract. The principle was effectively accepted in regard to concurrent liability in tort and contract for purely economic loss, as was seen in the case of Midland Bank Trust Co v Hett Stubbs & Kemp (a form).

There have been cases where application of concurrent liability was either rejected or questioned. The case of Groom v Crocker rejected concurrent liability, but such rejection was questioned by many Australia cases, such as Watts v Public Trustee; Aluminium Products Pty. Ltd. v Hil; and Mac Pherson & Kelly v Kevin J Prunty & Associates. In Kawkins v Clayton, it was suggested that there is no justification to imply a term of the same content in a contract where there is a tortuous duty to take reasonable care, and consequently, there cannot be an action for breach of implied terms to take reasonable care. It is also important to note in this context that a plaintiif is entitled to enforce duty arising out of a contractual against contractual breach in order to enforce liability from such breach. The principle of concurrent liability allows a plaintiff to bring either or both contractual and tortious actions. The plaintiff has the option of choosing action under the law of tort if it gives him or her opportunity or more advantage to claim damages, such unliquidated damages under tort. Lord Goff in the case of Henderson v Merrett Syndicates Ltd sums up by stating that:

[G]iven that the tortious duty is imposed by the general law, and the contractual duty is attributable to the will of the parties, I do not find it objectionable that the claimant may be able to take advantage of the remedy which is most advantageous to him, subject only to ascertaining whether the tortious duty is so inconsistent with the applicable contract that, in accordance with ordinary principle, the parties must be taken to have agreed that the tortious remedy is to be limited or excluded.

The existence of a legal duty should be assessed along with its content for determining the consequence. A person to whom a legal duty is owed is entitled to an enforceable right

R. Stevens, Torts and Rights (Oxford: Oxford University Press, 2007).
S. Smith, Contract Theory (Oxford: Oxford University Press 2004).
Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 (HL).
Midland Bank Trust Co v Hett Stubbs & Kemp (a form). [1979] Ch. 384.
S Christensen and W.D Duncan, Professional liability and property transactions (Federation Press 2004).
Watts v Public Trustee (WA) [1980] WAR 97.
Aluminium Products Pty. Ltd. v Hill [1981] Qd R 33.
Mac Pherson & Kelly v Kevin J Prunty & Assocaites [1983] 1 VR 573.
Kawkins v Clayton (1988) 164 CLS 539.
WAD Miller and S Rukawina, ‘Canada' in Christian Campbell, International Product Liability (Lulu.com 2009) 97-103.
Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 (HL).

against the person who owes such duty to act to the duty. For instance, principle of concurrent liability is seen in professional services, such as that of a solicitor. In case of violation of some negligent act, the solicitor is liable due to a contractual relation with his or her client, and is liable in tort due to his duty to take care. The contractual relationship should serve sufficient proximity to establish a duty of care. It was held in the case of Sumitomo Bank v Bank Bruxelles Lambert SA that tortious liability may be more onerous and may irrespectively arise despite existence of contractual relationship. To this point, reiterating Central Trust Co v Rafuse, a concurrent liability cannot be allowed if it circumvents or escapes a contractual exclusion or limitation of liability for a tortious act. If duties are part of the law of contract, it cannot be part of law of negligence.

This is a dent in the principle of concurrent liability. Another relevant point of instance is to be referred is Section 5 and Section 2 of the Limitation Act 1980. The limitation period provided herein for both contract and tort action is “six years from the date on which the cause of action accrued”. Important point here is that accrual dates may be different, where in contract the accrual date for breach arises on the date of failure to take reasonable care and provide wrongful advice as in the case involving solicitor’s duty, whereas in tort, the accrual date is counted different where it is the date of damage or when there is damage for relying on the solicitor’s advice. Such difference could have significant impact on the limitation period in a number of cases.

The assumption of duty predated categoristation into contract and tort. Such assumption cannot sensibly be forced into either category. At the same time a contractual term of liquidated damages enables a party to exclude tortiuous duty of care. Likewise, a contractual term can exclude inconsistent any duty of care. The rational for excluding concurrent liability was seen in the case of Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd where Lord Scarman sums up the reasons for separating contractual and tortious liabilities. He states that there is no advantage to search for a liability in tort where there is a contractual relationship, particularly so in a commercial relationship.

Analysis could, though, be carried out in contractual relationships, such as that of a banker and a customer when the relevant question would be to determine whether terms are to be implied, or to identify a duty arising from the character and proximity of the parties’ relationship. In support, Powell stated that considerations that negate a duty of care in a statutory or regulatory context are set aside when issue arises in a contractual context. Such considerations or similar considerations should militate against imposing tortuous duties into a contractual relationship. The

Aaron Taylor, ‘Concurrent Duties’ (2019) 82 (1) The Modern Law Review 17-45.
Sir Fred Phillips, Ethics of the Legal Profession (Oxon: Routledge 2016).
Hedley Byrne & Co Ltd v Heller & Partners Ltd, [1964] AC 465, 1964.
Sumitomo Bank v Bank Bruxelles Lambert SA (1997) 1 Lloyds Rep 487, 1997.
Central Trust Co v Rafuse [1986] 33 DLR (4th) 481.
Bolt Burdon Kemp, The interplay between concurrent liability in tort and contract: a claimant’s perspective’ (2015) accessed .
P. Winfield, The Province of the Law of Tort (Cambridge: Cambridge University Press 1931).
Phutchaya Numngern, ‘The Concurrent Liability in Contract and Tort Under US and English Law: To What Extent Plaintiff Is Entitled to Recover for Damages Under Tort Claim?.’ (2017) Indiana University Maurer School of Law.
Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80, 107.
Idbi.

considerations are relevant when the court applies the test of “fair, just and reasonable” to determine whether a duty should be imposed. In Caparo v Dickman, the statutory context limits any duty of care and sometimes it excludes such duty. Existence of other remedies often militates against imposing a duty of care. The test of remoteness in regard to a contractual breach could be applied in the tort claims to exercise limit on recoverable damages in concurrent tort claim. This will ensure protection of parties’ expectations.

Conclusion

Concurrent liabilities should be determined on a case to case basis and court should establish a duty of care to determine whether parties’ rights and liabilities should generally be regulated by the contracts or include expansive role of law of tort. It is noteworthy that contract should not and do not generate duties of care in tort that reflect contractual obligations.

John Powell QC, ‘Professional and client, the duty of care’ in P Birks (ed.) Wrongs and Remedies in the Twenty-first Century (Oxford University Press 1996).
Caparo v Dickman [1990] 2 AC 605.
Phutchaya Numngern, ‘The Concurrent Liability in Contract and Tort Under US and English Law: To What Extent Plaintiff Is Entitled to Recover for Damages Under Tort Claim?.’ (2017) Indiana University Maurer School of Law.

Cases

Aluminium Products Pty. Ltd. v Hill [1981] Qd R 33

Central Trust Co v Rafuse [1986] 33 DLR (4th) 481

Henderson v Merrett Sundicates Ltd [1994] 3 All ER 506

Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 (HL)

Hedley Byrne & Co Ltd v Heller & Partners Ltd, [1964] AC 465, 1964

Kawkins v Clayton (1988) 164 CLS 539

Mac Pherson & Kelly v Kevin J Prunty & Assocaites [1983] 1 VR 573

Midland Bank Trust Co v Hett Stubbs & Kemp (a form). [1979] Ch. 384

Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80, 107.

Sumitomo Bank v Bank Bruxelles Lambert SA (1997) 1 Lloyds Rep 487, 1997

Watts v Public Trustee (WA) [1980] WAR 97

Bibliography

Books

Best A and Barnes D, Tort Law: Cases, Statutes, and Problems (New York: Aspen Publishers 2007)

Christensen, S. and Duncan, W.D., Professional liability and property transactions (Federation Press 2004).

Furmston MP, Cheshire GC and Fifoot C.H.S., Cheshire, Fifoot and Furmston's law of contract (Oxford University Press 2012)

Powell J, ‘Professional and client, the duty of care’ in P Birks (ed.) Wrongs and Remedies in the Twenty-first Century (Oxford University Press 1996)

Phillips F, Ethics of the Legal Profession (Oxon: Routledge 2016)

Smith S, Contract Theory (Oxford: Oxford University Press 2004)

Stevens R, Torts and Rights (Oxford: Oxford University Press, 2007)

WAD Miller and S Rukawina, ‘Canada' in Christian Campbell, International Product Liability (Lulu.com 2009) 97-103.

Winfield PH, The Province of the Law of Tort (Cambridge University Press 2013)

Journals

Taylor A, ‘Concurrent Duties’ (2019) 82 (1) The Modern Law Review 17-45.

Numngern P, ‘The Concurrent Liability in Contract and Tort Under US and English Law: To What Extent Plaintiff Is Entitled to Recover for Damages Under Tort Claim?.’ (2017) Indiana University Maurer School of Law.