No-Fault Liability

Author: Manishka Seal Student, Amity University, Kolkata


What is ‘No-Fault Liability’?

Sometimes, a person is held liable for a fault, which he did not intend to do, or he was not negligent on his part in causing the harm, or he, even, took reasonable care to avoid causing the harm. In other words, sometimes in law, a person is held liable for no fault of his own, which is termed as ‘No-Fault Liability’. Such kind of liability exists in two forms: strict liability and absolute liability.

Strict Liability:

When a person is in possession of a dangerous thing, which escapes from the premises in any manner and thereafter, causes harm, the said person is strictly liable for such damages, even if he was not negligent in causing the harm. In such a case, it is the responsibility of the defendant to prove that he is not liable for such damages.

The Rule in Rylands v. Fletcher:

In Rylands v. Fletcher[1], the defendant built a reservoir on his land, through independent contractors, to provide water to his mill. They failed to notice the old, idle shafts under the site, leaving it as it was. When the reservoir was filled with water, it burst through the shafts. Consequently, it flooded the adjoining coal mines, which belonged to the plaintiff. Here, the defendant was neither aware of the shafts, nor was he negligent in his actions, even though the contractors were. Yet, the defendant was held strictly liable. This case laid the foundation of the concept of strict liability.

Essentials:

For the application of strict liability, the following three requisites must be fulfilled:

  1. The rule requires the existence of a hazardous thing, and the thing will probably cause harm. The dangerous thing can be anything, ranging from gas and electricity to noxious fumes and rusty wire.

  2. The dangerous thing on the person’s land must escape.

  3. The land must be put to unnatural use. It should not simply be such use from which the general community would draw interest or convenience. It must be such use that poses an enhanced threat to others.

Exceptions:

  1. Plaintiff’s default

  2. Consent of the plaintiff

  3. Act of the third party

  4. Act of God

  5. Statutory authority

Cases where Strict Liability has been cited:

  1. Musgrove v. Pandelis[2]

  2. C. Balakrishnan Menon v. T.R. Subramanian[3]

  3. K. Shanrung Lamkang v. State of Manipur[4]

  4. P. Electricity Board v. Shail Kumar[5]

Absolute Liability:

When an organization is involved in an “inherently” hazardous activity, and the operations of such an organization result in any harm to anyone, the enterprise is “absolutely liable” to compensate the aggrieved. Unlike strict liability, there are no exceptions to absolute liability. To put it in another way, the defendant cannot get away with the liability by showing there was no negligence on his part. The rationale behind this rule is explained below:

  1. i) If an inherently dangerous activity is permitted in the organization, it is assumed that such consent is contingent on the firm, taking into consideration, the cost of accidents, occurring as a result of the functioning of the firm, as a considerable constituent of its ongoing costs.

  2. ii) The enterprise has the resources to bring to light potential dangers and guard against them.

The Rule of M.C. Mehta v. Union of India:

In M.C. Mehta v. Union of India[6], the petitioner filed a public interest litigation under Article 32 of the Indian Constitution, on account of leakage of oleum gas from Shriram Foods and Fertilizers, Delhi. Its consequences involved the demise of an advocate practising in Tis Hazari Court and injuries afflicted to several others. If the rule laid down in Rylands v. Fletcher was applied in such situations, then every such enterprise, engaged in hazardous activity in populated areas, would plead defence under the exceptions in the rule of strict liability. Thus, the Supreme Court evolved a new concept of ‘Absolute Liability’, following the dynamic needs of society and held the enterprise absolutely liable for the harm. Absolute liability was not subject to any of the exceptions under Rylands v. Fletcher. The Court also permitted the organizations filing the PIL to claim compensation from the enterprise within two months.

Reasoning given by the court in this judgement:

The rule in Rylands v. Fletcher was laid down in the late-nineteenth century, a time when the economy and technology was not as advanced as it is at present. Owing to expansion in scientific knowledge and technological advancement, every enterprise, nowadays, involves hazardous activities, to some extent, for its growth.   In that case, every enterprise will resort to the defences or exceptions under Rylands v. Fletcher to avoid liability, thereby exploiting it. Thus, the laws, which are meant to regulate society, cannot remain static. It has to change with the changing needs of society. Hence, the need for absolute liability was necessary to adapt itself to the industrialised society.

Bhopal Gas Leak Disaster Case:

Bhopal gas tragedy was an outcome of leakage of methyl isocyanate as well as other poisonous gases in Union Carbide India Ltd., which manufactures pesticides in Bhopal. It is a subsidiary of Union Carbide Corporation, USA. The leakage ruined many lives, caused serious injuries, caused neurological disorders, and even worse, impaired many people’s sense organs. Based on the documents of Union Carbide, it was shown beyond doubt that they availed technology, without adequate testing and proof, and reduced managed safety and maintenance perfunctorily to avoid huge expenditure. It pleaded the defence of sabotage under the rule of Rylands v. Fletcher, but it was denied. The Supreme Court followed the principle of absolute liability from the case of M.C. Mehta v. Union of India. To ensure the victims of the gas leak case are adequately compensated, the Public Liability Insurance Act, 1991 was passed. It states that a person, who is associated with the handling of a ‘hazardous’ or ‘dangerous’ substance, shall provide “immediate relief” to the victims of an accident, which occurred as a result of such dangerous operations of his enterprise. This act was built on the foundation of the ‘No-Fault Liability’.

Cases where Absolute Liability has been cited:

  1. Vellore Citizens Welfare Forum v. Union of India & Ors.[7]

  2. Jagdish v. Naresh Soni[8]

  3. Indian Council for Enviro-Legal Action v. Union of India[9]

  4. Klaus Mittelbachert v. East India Hotels Ltd. [10]

Difference between Strict Liability and Absolute Liability:

  1. Strict liability provides for exceptions or defences, hence it is not absolute, whereas, absolute liability is devoid of exceptions.

  2. Strict liability involves the unnatural use of land, posing an increased threat. Furthermore, it requires the escape of a dangerous thing from the defendant’s land. Absolute liability, on the other hand, requires the enterprise to be engaged in an activity, which by its very nature is hazardous.

  3. Strict liability does not account for harm occurring within the premises, since it requires the dangerous thing to escape. Absolute liability accounts for harm occurring within as well as outside the premises.

  4. The damages under strict liability are not as desirable as they are under absolute liability, since under absolute liability, compensation is proportional to the size and profitability of the enterprise.

Conclusion:

In the case of strict liability, the defendant was held liable, even though he did not commit any fault. Nevertheless, strict liability provides for exceptions or defences, which are subject to misuse, given the expanse of scientific knowledge and technological development. Hence, the changing needs of society and the economy led to the evolution of absolute liability, which comes without any defences. Both these rules hold the defendant liable, even when he is not directly or indirectly at fault. In other words, both the rules follow the basis of ‘No-Fault Liability’.

References:

[1] Rylands v. Fletcher (1868) L.R. 3 H.L. 330

[2] Musgrove v. Pandelis, (1919) 2 KB 43.

[3] T.C. Balakrishnan Menon v. T.R. Subramanian A.I.R. 1968 Kerala, 151.

[4] S.K. Shamrung Lamkang v. State of Manipur A.I.R. 2008 S.C. 46.

[5] M.P. Electricity Board v. Shail Kumar A.I.R. 2002 S.C. 551.

[6] M.C.Mehta v. Union of India A.I.R. 1987 S.C. 1086.

[7] Vellore Citizens Welfare Forum v. Union of India & Ors. 2016 Indlaw MAD 4514, 2016 (4) MLI 25.

[8] Jagdish v. Naresh Soni, (2007) 3 MPHT 234.

[9] Indian Council for Enviro-Legal Action v. Union of India A.I.R. 1996 S.C. 1446.

[10] Klaus Mittelbachert v. East India Hotels Ltd. A.I.R. 1997 Delhi 201.

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