Template:M intro contract gross negligence

“Even a serious lapse is not likely to be enough to engage the concept of gross negligence. One is moving beyond bad mistakes to mistakes which have a very serious and often a shocking or startling (cf. “jawdropping”) quality to them.”

—Federal Republic of Nigeria v JP Morgan Chase Bank

For a long essay on the related question “why would one use negligence in a contract at all?” see the article about “contractual negligence”. For a short answer to that question try this: Unless one has an indemnity, one shouldn’t.

What is gross negligence?

Is there anything to be gained, under an English law contract, from restricting your liability to losses occasioned by gross, as opposed to ordinary, casual, everyday, run-of-the-mill negligence?

It is hard to sustain in the face of stout objection. On one hand, these days, gross negligence does seem to mean something at English law — obiter — it’s just that it is not entirely clear what.

What case law there is suggests that, since both terms do get used in English law contracts, there must be some distinction. From the declarers of the common law, this is quite a piece of tail-wagging-dog work.

The important factors in distinguishing between plain negligence and gross negligence appear to be:

• The seriousness of the error
• The seriousness of the resulting risk.
• Something more fundamental than a simply failure to exercise proper skill or care: a “serious indifference” to an obvious risk.
• Failing to comply with a duty of care by a significant margin.

Note in particular the seriousness of the risk or loss which eventuates.

Put it this way, if your negligence results in a £10,000,000 loss, it is going to be a curious court indeed which concludes this was a mere trifling matter, and the right outcome is for the innocent party to bear the loss, and the one who causes it, by negligence, being allowed to walk away.

New York law

This outcome might be different in the American courts. Gross negligence is a thing across the ditch, and it is apparently sheeted directly the wantonness of the error, rather than (as seems to be the case in English law) the outcome of the carelessness. It requires something more like recklessness than simple carelessness.

The ladder of liability

In some strands of legal endeavour (notably in the criminal law and the tortious world of civil wrong-doing), your mental state is important in assessing your responsibility for what you done; in others (principally the cool and dispassionate law of contract) it is, for the most part, not. Contracts are contracts, your signed up voluntarily; why you didn’t do what you said you would is beside the point.

This is less so for the criminal law and relations between unacquainted neighbours, where we impute certain standards of care.

Where the inadvertent is blameless, neither knowing the risk she runs, nor being reasonably expected to be able to anticipate it; and the negligent has some civil, civic responsibility for what befalls his neighbour on the premise that, since that odious hypothetical fellow plucked from the pews of the sacred Clapham omnibus would have seen it, so should he, even though in point of fact he did not; the grossly negligent is a poor, confused, careless American; the reckless sees the risk all right, and decides to plough on and take it, notwithstanding that she might have no particular wish or expectation that a calumny should befall anyone, least of all the plaintiff.

The intender, in contrast to all those above, does what he does as a matter of cold-blooded, contemptuous calculation.

Now the standards as between crimes and torts diverge. We know at one end are the innocent, faultless lambs, at the other wanton brigands; but how the varying stages between fit together is by no means clear. We have had a half-hearted go, but be warned, it was a Friday afternoon, and we got approached knock-off time we swiftly lost interest. This is probably a good example of negligence.

Right, where’s that beer?

Criminal	Tort	Contract	Description
Inadvertence	Inadvertence	Inadvertence	Neither intended, wanted, foresaw, nor can reasonably have been expected to foresee the calamity that in fact came about. Had no bearing on any duties, implied or explicit, arising between us.
Negligence	Negligence	—	A reasonable person in that position would have foreseen the incipient calamity which would come about by following this course of action, but our hero, in actual fact, did not. Ergo, an unreasonable person.
—	—	Default	You have agreed to do something, received consideration for it and, whether by accident or design, you didn’t do it. This is the contractual equivalent of negligence: you had a duty, and you fell short of it.
—	—	Wilful default	You have agreed to do something, received consideration for it and, on purpose, you didn’t do it. (This is the same as default, by the way. No-one cares why you didn’t do it).
—	—	Gross negligence	Even a faintly moronic person in that position would have foreseen the incipient calamity which would come about by following this course of action but our hero in actual fact did not. Ergo, a stridently moronic person. Unclear how there is room for this in a contract given normal default and the already redundant wilful default.
Recklessness	—	—	Our hero did foresee the incipient calamity and, while not wanting it, boxed on regardless.
Intention	—	—	Not only foresaw the calamity but acted fully intending it to come about.