Damages in the Law of Torts : Some Reflections

Law's spectacular adaptation to the requirements of 'social solidarity', as emphasized by the French Jurist Leon Duguit, is the most significant development of the present age, which is marked by its ever-increasing interdependence through division of labour and specialisation of functions. The earlier concept that liability can be based only on fault conformed to the metaphysical idea that all legal relations must be traceable to an act of will of the party. This exclusive test had had to be abandoned and liability for 'risk created' introduced. Liability for risks was altogether by reference not to moral fault but to the exigencies of the general social and economic structure, an enterprise being fixed with the losses involved in the conduct of it. Liability of employers for injuries to their workmen exemplified this principle, as did the liability of the State for injuries suffered by individuals as a result of the operations of public service.1  Eminent authors, like Pollock, Winfield and Stalybrass and the House of Lords too have gone a long way towards formulating general principles of tortious liability, in the process of adaptation to the branch of law of new social requirements. Practical necessities forced all the legal systems to shift emphasis in the law of torts, from moral blame to social responsibility. Hence it is not peculiar that while most of the branches of law, e.g. Crimes, Contracts, Property, Trusts, etc. have been codified, there is yet no Code for the Law of Torts, because most of these branches developed against their respective sociological background. However, the Engligh Common Law has been consistently trying to formulate some basic principles in the tort field, though not without an element of uncertainty. Particularly in the field of damages, there is the inherent difficulty of doing justice to both parties. Much depends upon the discretion of the judge, and as judicial discretion is aptly described by Krishna lyer, J. as the 'hunch of the bench', there is a lurking danger in the award of damages being arbitrary in the absence of firm principles and the judicious application of those principles to the facts of the case. It is often seen that rational principles upon which damages are to be assessed tend to be obscured by familiar phrases which lawyers use, but seldom pause to analyse. It is submitted that time is ripe for a bold scrutiny of the principles and practice governing the compensation for losses — especially the non-pecuniary ones.  The basic difference which immediately emerges between the English Law of Torts and the Hindu Dharmashastras is that whereas the English Law of Torts has emphasised rights and tended to make people right-conscious, its analogous provisions under the Dharmashastras emphasised duty and tended to make people duty-conscious. That is the reason why we do not have the equivalent of the doctrine "King can do no wrong" in ancient India. The status of King was more of a bundle of duties than of rights. Moreover, expiation of wrong-doer, not merely reparation of the victim, was the objective of the Dharmashastras. However, there seems to be no such difference between the 'neighbour principle' of Lord Atkin which tried to give answer to the question "Duty to whom?", and answer provided in the Dharmashastras of the same question. Individual follows Dharma to attain Moksha, and he owes duty towards himself and towards community generally but not towards any other person so as to vest in such other person a cause of action in the event of a violation of that duty. Today we find that the same point is reached with the erosion of the fault principle, growing awareness of social responsibility and distribution of losses. A tort suit is no longer a two-party affair, whose costs are imposed on one or other of the participants but in which the third party is society at large.  As an aftermath of Industrial Revolution, many statutes were passed which laid down the measure of damages and awarding of damages in such cases became more or less an arithmatical calculation depending on the schedule and tables. Humanity has been very jealously and zealously protecting the sanctity of individual rights from being wantonly violated. Almost all the legal systems in the world, including the Hindu, the Muslim and the English legal systems agree upon this basic principle of a natural right to get compensation for injuries suffered. With the advance of civilisation, the barbaric ways and means were replaced with the more refined methods, but the aim and purpose has remained the same..... namely, reparation for the wrong done to the injured person.  The basic principle to be followed in the award of any damages is "Restitution integrum", with the only exception of cases of non-pecuniary losses and award of exemplary damages. There is a need to widen the scope and field of exemplary damages and time is ripe to re-examine the observation of the House of Lords in Rookes v. Barnard, (1964) AC 1129, and Cassell v. Broom (1972) AC 1027.  Remoteness of damages have always been a knotty problem. In this field, it may be seen that by substituting the test of direct consequences by the test of reasonable foresee-ability, the liability in torts has become restricted. In the Re Polemis, (1921) 3 KB 560, days it was much wider and now the liability in torts is on par with that in contract as formulated in Hadley v. Bazendale, (1854) 9 Ex 341, 354.  The concept of fault was dominating the existing compensation system, which was peculiarly suited to the nineteenth century, when the theory of laissez-faire prevailed to encourage free activity, instead of cramping it by the imposition of strict liability. Many factors are responsible for the slow erosion of the fault principle, the system of insurance being the main amongst them. The erosion of the fault principle, concept of distribution of losses and treatment of injury as a disease are the hallmarks of compensation jurisprudence today.  Negligence has dominated the scene in the Law of Torts for more than a century and a half and it is worthwhile to see with amazing happiness the formulation and development of the concept like 'duty to take care' and 'the standard and degree of care'from Donough v. Stevenson, (1932) AC 562, to Dorset Yatcht, (1970) AC 1004, and Dutton's case, (1972) 1 QB 373. In the absence of adequate safeguards for the consumers the doctrine of product liability and the resulting quantum of damages becomes very difficult.  Death as a final catastrophe has an important bearing on the tortious liability which may possibly extinguish or create liability. The anomalous position which prevailed at Common Law because of the maxim "Actio personalis moritur cum persona" along with the rule in Baker v. Bolton, (1808) 1 Camp 493 came to be overturned by the Fatal Accidents Act, 18462. The two recent cases : Delhi Transport Corporation v. Lalita, AIR 1982 Delhi 558 and Chairman, Andhra Pradesh State Road Transport Corporation v. Shafiya Khatoon, AIR 1985 Andh Pra 83, taken together represent the Indian law on point of damages for loss of life and limb. The introduction of the principle of 'liability without fault' and the institution of the Solatium Fund in the case of 'Hit and Run' cases as inserted in the 1982 amendment of the Motor Vehicles Act, 1939 has for its coherent basis the 'universal compulsory accident insurance' as envisaged by Blum and Kanhan. Indian Courts for some time adopted itemisation approach whereas Tribunals constituted under S. 122 of Motor Vehicles Act, 1988 are required to adopt comprehensive component approach3.  Damages for mental distress has been a distressing dogma for the judges since 1888 when they denied such a claim in Victorian Railway Commissioners v. Coultas, (1888) 13 App Cas 222. It is observed that reference to the term 'mental shock' was made in Baker v. Bolton and in Donough v. Stevenson damages for 'shock' were in fact awarded though that was an instance of parasitic damages. Apart from Wilkinson v. Downton, (1897) 2 QB 57, where the mental shock was intentional, Courts have showed a marked reluctance to allow 'anguish claims'. The confusion about the damages for nervous shock is only slightly reduced by the preponderance of modern opinion in Bourhill v. Young, (1943) AC 92 and King v. Phillips, (1953) 1 QB 429 that the problem in cases of nervous shock is one of duty and not of remoteness. In short it can be concluded that if the ordinary principles of liability in negligence indicate that when the plaintiff has no cause of action, then he can no more recover for nervous shock than for any other injury. But even if the ordinary principles of liability in negligence suggest that the plaintiff is entitled to a remedy, it does not necessarily follow that he can recover damages for shock.  The phenomenal development of modern welfare State has resulted in the vestment of vast powers in the State administration. Consequently the question thus arises is this. Is it the State or the errant official that is ultimately liable for the wrong? This question has vexed almost all the legal systems in the world. A comparative study of English, American, French and the Indian Legal systems reveals that the development made by the Counseil d'Etat in this field may serve as a good example to other countries.  It is observed that under the Hindu texts concept of vicarious liability is virtually absent, except with the notable exception of a Hindu son being under the pious obligation to pay off his father's lawful debts. The conclusion is inevitable that judicial creativity has been rather slow in this area of governmental liability and the dichotomy between the sovereign and non-sovereign functions is still going on. The redeeming feature, however, is that more and more functions are being brought within the sweep of non-sovereign functions. Decisions of the Supreme Court in Rudul Sah's, AIR 1983 SC 1086, Sebastian, AIR 1984 SC 1026 and Saheli, AIR 1990 SC 513, are indeed landmark judgments and it is heartening to see that the principle in Rudul Sah's case is being implemented by the High Courts in India.  Advance of modern civilization and industrialisation has resulted in the ecological imbalance of earth. Environmental pollution has become a growing menace in the developed and developing countries alike, and there is a universal anxiety to check this hazard. Account has been taken of the measures adopted at the international and national levels in this field. It is observed that environmental law is an amalgam of common law and statutory principles, the deepest roots being found in principles of physical media — air, water, land — by a wide variety of means and are contained in some Acts which are more or less sporadic, India was a party to the United Nations Conference on Human En-vironmeat held at Stockholm in 1972 and has taken active steps to tackle this problem. The Water and Air (Prevention and Control) Acts passed in 1974 and 1981, and the Environmental Protection Act, 1986 are not comprehensive enough. Hence a comprehensive enactment inclusive of control of noise pollution is the need of the day. It is surprising that all these Acts contain only penal provisions but do not provide for any compensation to the victims because of some accident or disaster syndrome, once the casual connection is provided. This bitter truth was highlighted when the century's worst industrial disaster took place at Bhopal in Madhya Pradesh in December, 1984. Fixing of liability and assessment and quantification of damages is a vital question which should be handled on humanitarian grounds. The Bhopal disaster squarely falls within the doctrine of strict liability as evolved by the House of Lords in Rylands v. Fletcher, (1968) LR 3 HL 330.  A five Judge Bench of the Supreme Court reiterated in Charanlal Sahu, AIR 1990 SC 1480 that any enterprise engaged in hazardous or inherently dangerous activity must conform to highest standards of safety and if any accident takes place, the enterprise should be made strictly and absolutely liable to compensate all those who were affected by the accident as part of the social cost. Such liability is not subject to any of the exceptions which operate vis-a-vis the tortious principle of strict iability under the rule in Rylands v. Fletcher.  Salmond emphasises that the function of damages is compensation rather than punishment; but punishment cannot always be ignored. Awarding exemplary damages may infringe in principle the object of law of Torts. The House of Lords in Rookes v. Barnard recognised three classes of cases in which award of exemplary damages was justifiable.  Justice K. N. Singh in his separate opinion rightly emphasises that the law laid down in M. C. Mehta, AIR 1987 SC 1086 made a landmark departure from the conservative principles with regard to the liability of an enterprise carrying on hazardous or inherently dangerous activities.  It is submitted that it is a fit case for awarding of punitive damages. The callous indifference of the developed countries towards the developing countries in selling their technologies to them is also shocking and award of punitive or exemplary damages is the only answer to it. Legislative, Judicial and Executive attempts to award damages to the Bhopal victims is an unending story of the State's failure to adequately compensate these unfortunate victims.  Be that as it may, it is suggested that Government may think of tax rebates and easy financial loans to industries, particularly small scale industries for installing treatment plants to combat pollution. It is observed that we Indians are traditionally contributing to pollution by celebrating happy occasions by burning of crackers. To discourage people from this habit, extra tax may be levied on the purchase of crackers and the amount thus collected may be deposited into one compensation fund. This fund can be utilised to pay compensation to the victims of air and noise pollution and burns.  Another suggestion in this respect is that of community fine which urges the community as a whole to watch, be vigilant and guard against pollution. A philosophy leading to 'vicarious suffering' emerges out of the concept of community fine. This may result into the principle of collective responsibility with which we are familiar because of its assocition with Gandhiji. Concept of community fine is no different from the principle of Insurance in the wider sense. The only difference might be that Insurance stands on principle of voluntariness whereas community fine rests on compulsion. It is the time and situation that should decide which is to be proposed.  It is submitted that litigation by victims of toxic chemical exposure has led to the re-examination of statutes of limitation for personal injury suits. Unlike a typical tortplaintiff who has little difficulty in bringing his suit within the limitation period, a toxic tort victim may not even become aware of his injury until latent diseases manifest themselves fifteen or twenty years after his last contact with the defendant's product.  Yet another suggestion about pollution insurance needs serious consideration. The State in its role as a 'parens patriae' in a welfare State must be in a position to compel the industrialists to insure the persons in the vicinity of industries who are potentially exposed to any environmental disaster or alternatively the State itself must come forward to provide relief to victims through its insurance agencies, which is quite practicable in a country like India where the insurance business is nationalised.  As distinguished from substantial damages, which are awarded to compensate the plaintiff for the wrong suffered, exemplary damages are intended to punish the defendant for the outrageous nature of his conduct more by way of deterrence. The Supreme Court in M.C. Mehta v. Union of India, AIR 1988 SC 1037, propounded a theory of far-reaching importance particularly when it results in environmental hazard, viz., "the compensation must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect". The larger and more prosperous the exterprise, the greater must be the amount of compensation payable by it. As the Court rightly emphasised that new principles are to be evolved and new norms are to be laid down to adequately deal with the new problems which arise in a highly industrialised economy. Arguments of cost internalisation and loss spreading suggest that regardless of negligence, hazardous industries, rather than innocent victims, should bear the cost of injuries suffered by hazardous substances4. Cost internalisation is just because the victims obtain compensation from those who profit from their harmful activity and deters future tortious conduct. Loss spreading is fair because every one in society benefits from the products that the hazardous industries manufacture and therefore, every one should pay for a portion of the harm associated with these products.  While laws to regulate pollution and penalise polluters exist, there is no authority to compensate victims of industrial disasters. The numerous environmental laws remain paper tigers. Compensation for industrial disasters under the Public Liability Insurance Act is only an interim payment and the other litigation is time-consuming, with evidence of liability and amount of compensation difficult to determine. Court decisions take enormous time and at times are too late to save the environment5. It is heartening to note that Bhagavati, C.J.'s (as he then was) suggestion to establish National Environment Tribunal is awaiting parliamentary approval and we hope such Tribunal would be set up soon to expedite the claims arising out of environmental disasters.  A new vision of law portrays it as a means and not as an end. The contours of the judicial role depend not only on the nature and scope of the underlying compensation claims but also on constitutional, prudential and functional liability considerations. The anguish and stress caused to the devastating death of the deceased and the continuing uncertainty of the fate of those living, do indeed amount to violation of Human Rights, which is of gravest contemporary concern. This psychological and physical torture suffered by such victims go beyond the human comprehension, resulting into the impossibility of computing the compensatory costs and fixing liability.

Author Name: Dr A Lakshminath