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| {{a|tort|{{subtable|{{liability ladder}}}}}}{{quote| | | {{essay|contract|gross negligence|{{image|Clapham Omnibus|png|''Mrs. Potts Meets the Man on the Clapham Omnibus''. {{vsr|1956}}}} }} |
| “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.”
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| :—{{casenote|Federal Republic of Nigeria|JP Morgan Chase Bank}}}}
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| ===A fish out of water===
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| Here is a curious thing. The [[common law]] of [[tort]], from whose loamy soil the basic idea of negligence took root, has no concept of gross negligence. Tort polices those civil relations where the parties have not agreed in advance how they should treat each other: here there are no duties, so they must be inferred, and — by reference to that mythical figure on the Clapham Omnibus — the courts derived the [[standard of care]] a [[reasonable person]] owes to her [[neighbour]]s. Should you fall short of that, you have committed a tort. If you have not, you don’t. There is no “supermajority” over that, in [[tort]], whereupon you take a heightened liability. You have a duty of care; you either observe it or you don’t.
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| ''Gross'' negligence, therefore, exists only in the transplanted soil of contract: a place with no need for inferred duties of care ''at all''. SO we are already in a fairly weird place, which is why so many legal eagles are confused about it.
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| ''For an 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'''.''
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| For a short one, try this:
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| ===Why gross negligence commits a category error===
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| In broad terms, common law liability arises between two parties when one breaches its express or implied duties to the other.
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| Express duties are easy. The parties agree them advance. They are governed by the law of contract. The standard of care is “did you do what you agreed to do?” A party’s state of mind when it fails to do so (whether wilful, inadvertent or something in between) doesn’t matter.
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| Did you carry out your duty, or didn't you?
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| (There is a world of nuance in framing those duties — see below — but once framed, the question is binary.)
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| Where the parties have not agreed their respective duties in advance, the courts must imply them. This they do through the law of tort, extruding them from abstract ideas like the duty of care, the neighbour principle, and the mythical man* on the Clapham Omnibus.
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| (*Easily triggered: do not Google “Fardell v Potts”. Those of a robust constitution might enjoy it)
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| Again, much nuance required to frame the scope and extent of that duty, but once framed, it is a binary question. Did you meet your standard of care, or not?
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| The rationale for the bar on concurrent liability in contract and tort is thus clear: contract applies where you have agreed duties, tort where you have not. A duty inferred from abstract basic principles should not override a deliberate pre-allocation of actual risks.
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| So what does a covenant “not to be negligent” add to a contract? If it means anything, it is “do not fall short of your common law duty”. Since that duty is wholly defined by the contract, it just means “do not breach the contract”. It adds nothing.
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| Now, gross negligence. This sounds like a tortious concept, but isn’t. You are liable in tort for normal negligence. This is a definitional thing: whatever you are liable for is, QED, negligence. There is no inner circle of hell wherein more terrible tortious penalties accrue.
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| So gross negligence is a creature of contract. It wasn't judge-made. One day a commercial lawyer managed to get “gross negligence” into a contract and the rest is history. US courts and, more recently, English ones have been wrestling with it ever since.
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| But there is no room for evaluating how carelessly one acts when breaching a contract. It is binary. You either breach it or you do not. You can have acted with unimpeachable faith, in the most prudent and dovish way, but if you didn't do what you promised, you are liable.
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| Interposing a behavioural standard into a contract, therefore, makes a category error.
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| Now, when framing contractual duties themselves, we impose performance standards, short of “must at all costs”, all the time: “best reasonable endeavours”, ”all practicable steps”, “may, but is not obliged to”— that kind of thing.
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| But these performance standards necessarily define what is “normal negligence” in the contractual context — that is, what counts as a simple breach of contract. No-one of them undermines the binary nature of liability for breach.
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| The world — the new world especially — is awash with contracts riddled with gross negligence (in both senses?), it is true. This is a burden for our learned friends in the QBD and ninth circuit. ({{casenote|Central Bank of Nigeria|JP Morgan Chase Bank}} refers)
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| But for all us commercial attorneys out there, making these instruments for courts to unpick: come on. We can do better.
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| ===A spiritually bankrupt concept===
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| When negotiating to save the adjective “gross” from the oblivion it so richly deserves, your best tack — and it’s not great — is to say “look, if we muck up, we’re hardly going to stand on ceremony, are we? So don’t worry about the legal docs”.
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| This is not an edifying position for a lawyer to take, implying as it does that therefore you may as well not have a legal document at all. And it begs the question: if you don’t really mean it, why are you bothering to insist on “gross” negligence in the first place?<ref>The real answer is “because [[negotiation]] is [[performative]].”</ref>
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| After all, if you’re negligent, you’re negligent. It is hard to maintain your dignity against the complaint of an innocent, irate and out-of-pocket client by saying you’ve only been a ''bit'' negligent.
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| A good way of looking at this is to put it in the language of the laity. Like many other commonplaces of the ''[[Rechtsadler|Rechtsadlerkanon]]'', legal drafting can dress outright daftitude in sombre vestments. Take the time-worn [[indemnity]] for costs, framed in usual legal ''kapusta'':
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| {{quote|“''Customer hereby agrees to [[indemnify]] and keep indemnified Company on demand for all costs, beyond its ordinary costs of performance, that Company shall incur in the absence of aforesaid Company’s [[negligence, fraud or wilful misconduct]].''”}}
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| Adding the adjective “gross” here seems to add no more than a prudent pinch of pepper to this cabbage:
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| {{quote|“''Customer hereby agrees to [[indemnify]] and keep indemnified Company on demand for all costs, beyond its ordinary costs of performance, that Company shall incur in the absence of aforesaid Company’s '''gross''' [[negligence, fraud or wilful misconduct]].''”}}
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| But now render this same idea in the earthy metre of those who ride the [[Man on the Clapham Omnibus|Clapham omnibus]].
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| {{quote|“''You must [[reimburse]] us for any extraordinary costs we could not [[reasonably]] avoid when providing you our services.''”}}
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| Now it is a bit harder to “hide the weasel” if you’ll indulge the expression: not because the grammar is challenging, but because it sounds so preposterous when you do:
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| {{quote|“''You must [[reimburse]] us for any extraordinary costs we could not, '''without being [[reckless]],''' avoid when providing you our services.''”}}
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| ''Not [[reckless]]?'' could you not be a bit more committal than ''that''?
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| ===English law===
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| ====“Gross” versus “casual” negligence====
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| 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]]?
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| It is hard to sustain in the face of stout objection. On one hand, these days, {{tag|gross negligence}} ''does'' seem to mean ''something'' at English law — ''[[obiter dicta|obiter]]'' — it’s just that it is not entirely clear what:
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| :''“Certainly the last time this issue came before the Court of Appeal they decided that the debate about its meaning was a “somewhat sterile and semantic one.”'' <small>([http://www.linklaters.com/Publications/Publication1403Newsletter/TMT_Newsletter_March_2011/Pages/08_UK_When_Does_Negligence_Become_Gross_Negligence.aspx Linklaters publication])</small>
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| ====What ''is'' gross negligence?====
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| 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.
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| The important factors in distinguishing between plain negligence and gross negligence appear to be:
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| *The seriousness of the error
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| *The seriousness of the resulting risk.
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| *Something more fundamental than a simply failure to exercise proper skill or care: a “serious indifference” to an obvious risk.
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| *Failing to comply with a [[duty of care]] by a significant margin.
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| Note in particular ''the seriousness of the risk or loss which eventuates''.
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| 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.
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| This outcome might be different in the [[US attorney|American]] courts (see below).
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| ===New York law===
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| 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.
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| {{sa}}
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| *[[Degrees of liability]]
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| {{ref}}
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