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Gross negligence: Difference between revisions
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{{a|tort|{{subtable|{{liability ladder}}}}}} | {{a|tort|{{subtable|{{liability ladder}}}}}}{{quote| | ||
{{quote| | |||
“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.” | “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.” | ||
:—{{casenote|Federal Republic of Nigeria|JP Morgan Chase Bank}}}} | :—{{casenote|Federal Republic of Nigeria|JP Morgan Chase Bank}}}} | ||
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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'''.''` | ''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'''.''` | ||
For a short one, try this: | |||
In broad terms, common law liability arises between two parties when one breaches its express or implied duties to the other. | |||
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. | |||
Did you carry out your duty, or didn't you? | |||
(There is a world of nuance in framing those duties — see below — but once framed, the question is binary.) | |||
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. | |||
(*Easily triggered: do not Google “Fardell v Potts”. Those of a robust constitution might enjoy it) | |||
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? | |||
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. | |||
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. | |||
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. | |||
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. | |||
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. | |||
Interposing a behavioural standard into a contract, therefore, makes a category error. | |||
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. | |||
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. | |||
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|Reserve Bank of Nigeria|JP Morgan Chase Bank}} refers) | |||
But for all us commercial attorneys out there, making these instruments for courts to unpick: come on. We can do better. | |||
===A spiritually bankrupt concept=== | ===A spiritually bankrupt concept=== | ||
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”. | 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”. | ||