Gross negligence

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

Is there anything to be gained, under an English law contract, from insisting your liability be restricted to losses occasioned by your gross negligence?

This correspondent is of the view that that 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 - but it is not entirely clear what:

“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” (Linklaters publication)

When negotiating documentation the tack one gets obliged to take is “look, if we muck up we’re not going to stand on ceremony here, so don’t worry about the legal docs” – which isn’t the most edifying position for a lawyer to take, implying as it does that you may as well not have a legal document at all. And it does beg the question: why is one then bothering to make an argument about this in the first place? After all, if you’re negligent, you’re negligent. It is hard to maintain your dignity defending yourself against the complaints of an innocent, irate and out-of-pocket client by saying you’ve only been a bit negligent.

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

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

• The seriousness of the error
• The seriousness of the risk which results from the neligence.
• 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.

Wouldn’t you say?