England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		22nd May 2003

Lord Justice Waller:

Introduction

1. At 8.11 a.m. on 5^th October 1999 a disastrous accident occurred at Ladbroke Grove Junction some two miles outside Paddington Station. A westbound Thames train passed through signal SN109 at danger and collided virtually head on with an eastbound First Great Western high speed train travelling at high speed. Thirty-one people were killed and 259 were injured, some of them critically.
2. So far as the victims are concerned there was obviously a strong case on liability against Thames Trains and further, a strong case against Railtrack relating to inadequacies in the signalling system. To reduce the need for litigation by the victims an agreement has been reached between Railtrack and Thames Trains under which Thames Trains would try to settle the personal injury and fatal accident claims. Thames Trains brought proceedings against the Health and Safety Executive (the HSE) seeking a contribution and/or indemnity. They allege that the victims of the crash were owed statutory duties and/or duties at Common Law by the HSE. They allege in broad terms that the HSE failed to disapprove the works rendering the signalling unsafe and/or failed to prohibit the use of the track with an unsafe signalling system although they appreciated or should have appreciated that it was unsafe.
3. The HSE applied for an order striking out the claim under CPR Rule 3.4(2) on the basis that the particulars of claim as amended disclosed no reasonable grounds for bringing the claim.
4. By a judgment handed down on 23^rd April 2002 Morland J held that there was no arguable case in relation to breach of statutory duty but held that there could be circumstances in which the HSE would owe a common law duty of care and be held to be in breach of the same. He was further of the view that "if the House of Lords were to wish to consider the present case I anticipate that they would prefer to do it on facts found by the trial judge and not on incomplete factual assertions in the pleadings." He therefore refused to strike out the claim.
5. This is an appeal from that judgment.

What is the pleaded case?

6. The critical allegations seem to me to be as follows:-

(1) The HSE is a corporate body with specific responsibility for railway infrastructure and the safety thereof. The HSE exercised that responsibility through Her Majesty's Railway Inspectorate (HMRI), a specialised inspectorate which held itself out as possessing particular skill and knowledge in matters of railway infrastructure including track design and layout, signalling and signal sighting and the safety thereof. HMRI is one of the important organisations with responsibility to ensure the safe operation of the railways.(paragraph 2);

(2) By virtue of Regulation 4 of the Railway and Other Transport Systems (Approval of works, Plant and Equipment) Regulations 1994 Railtrack needed to obtain the approval from the HSE for any new or altered works plant or equipment which were capable of materially affecting the safe operation of the railway before the new or altered works plant or equipment were first brought into use. Approval was sought by Railtrack from the HSE before January 1995 in relation to works known as Phase 1; before October 1996 in relation to works known as Phase 2 and subsequently in January 1997 [paragraph 11(I) as amended].

(3) The HSE had a statutory duty to approve or not approve any application for approval (paragraph 3). It is alleged that a failure to prevent alterations being made or a track being used where the alterations might materially affect safety or to disapprove works which did materially affect the safe operation of the railways would be a breach of statutory duty owed to passengers on trains travelling on the railways; (this is to be inferred from the plea in paragraph 3. It is not fully spelt out but rightly Mr Carlisle QC does not seek at the strike out stage to take pleading points).

(4) The HSE owed a duty at common law to railway users to ensure that the railway infrastructure was safe and did not expose them to risk of collision; (paragraph 4). The nature of the case is best spelt out in sub-paragraphs (ii)(c) and (d) in the following terms:

"(c) It is appropriate to impose upon the Defendant a common law duty of care. The Claimant will contend that where, as here, a breach of statutory duty by the Defendant gives rise to a foreseeable risk of injury and the relationship between the Defendant and railway users is sufficiently proximate it will be just and equitable to impose a common law duty of care unless there are compelling public policy reasons to the contrary. Here there are no such public policy reasons: in particular the subject matter and purpose of the statutory provision, the absence of any adequate public law remedy, the inability of railway users adequately to protect themselves from a breach of the statutory duty by the Defendant and the reliance placed by railway users on compliance by the Defendant with its statutory duty all indicate the existence of a common law duty of care. Further a common law duty would enhance the performance by the Defendant of its duties.

(d) Further or alternatively the common law duty arises by reason of the reasonable reliance placed by railway users, including passengers and train operating companies, upon compliance by the Defendant with its statutory duties and the proper exercise of its statutory powers. This reliance arises by reason of the matters set out in paragraph 5 below."

(5) It is further alleged that the HSE assumed a duty of care by virtue of their conduct in that they (a) inspected Phase 1 of the new or altered infrastructure (b) they acquired knowledge of signal sighting problems between Paddington and Ladbroke Grove from at least March 1995, and knowledge that the overhead electric line would cause a further deterioration; (c) they failed to approve or disapprove the Phase 1 works; (by implication the allegation seems to be that they considered and decided not to approve or disapprove); (d) they reviewed or planned the review of documentation relating to the signalling works including testing records, signal sighting forms and SPAD (Signals Passed Against Danger) reports; (e) they inspected the Phase 2 new or altered infrastructure in October 1996; (f) they failed to approve or disapprove the Phase 2 works [again by implication the allegation appears to be that they considered the same and decided not to approve or disapprove]; (g) they identified matters that required to be carried out by Railtrack before the works could be approved [the implication is that they identified these to Railtrack since it is also alleged at (h) that they refused to issue certificates because matters identified had not been completed]; (i) they investigated SPADs including the SPAD at SN109 on 4 February 1998 (18 months before the crash); (j) they offered advice and guidance in relation to measures required to reduce the incidence of SPADs; they approved the removal of the flashing yellow signals on the approach to SN109; they attended meetings established to consider and recommend measures to reduce the incidence of SPADs between Paddington and Ladbroke Grove; (k) they invited Railtrack to keep them informed of the outcome of their review of further measures necessary to reduce the incidence of SPADs at SN109 following the removal of the flashing yellow lights; (l) they had knowledge of the high incidence of SPADs between Paddington and Ladbroke Grove since 1995, and of the potentially disastrous consequences, and had identified that SN109 was one of the 22 signals in the country most frequently passed at danger.

(6) It is alleged that passengers had no control over the railway infrastructure they were required to use, and relied on the HSE's skill and knowledge in the exercise of its statutory and common law duties to ensure that the railway infrastructure was safe (paragraph 5). It is further alleged that the HSE acted as a licensing authority without whose approval the infrastructure could not be used or operated.

(7) It is alleged that the accident took place because although SN 109 was at red, due to its poor placing/design the driver thought it was not, and thought it "displayed a proceed aspect".

(8) The Particulars of negligence or breach of statutory duty are contained in Paragraph 11, I will attempt to summarise as follows:-

(1) The HSE failed to approve or disapprove Phase 1 or 2 [by implication it is alleged that the HSE could not have been satisfied that alterations for which approval was being sought did not materially affect safety];

(2) The HSE caused or permitted new altered infrastructure to be used which had not been approved and which created a foreseeable risk of collision; (details are then provided of the ways in which the signalling at SN109 was inadequate and unsafe which I do not need to set out);

(3) The HSE caused or permitted new or altered infrastructure to be used which did not incorporate design features to prevent or reduce the risk of signals (including SN109) being passed at danger. (Details are provided of suggested design features, which would have reduced the risk which again it is unnecessary to spell out).

(4) The HSE caused or permitted new or altered infrastructure to be used which did not incorporate particular measures to prevent or reduce the risk of collision in the event of a SPAD at SN109. (Details of particular measures are given.)

(5) They accepted without inquiry Railtrack's assurance that the installation of electrical equipment had resulted in a negligible effect on signalling when they knew or ought to have known that this was not so.

(6) They failed to require Railtrack to convene a Signal Sighting Committee in respect of SN109, and allege they should have been convened (a) following modifications on gantry 8 in 1994, and (b) following each of the SPADs at SN109 on 3 April 1997, 4 February 1998, 6 August 1998 and 22 August 1998.

(7) They failed to ensure adequate risk assessments were carried out e.g. pursuant to recommendation 5 of the Formal Inquiry into the SPAD at SN109 on 4 February 1998;

(8) They failed properly to inspect the infrastructure between Paddington and Ladbroke Grove;

(9) They failed to ensure that Railtrack implemented recommendations, in particular recommendations following the accident at Royal Oak on 10 November 1995, and the SPAD at SN109 on 4 February 1998;

(10) These failures are alleged to have taken place notwithstanding The HSE's knowledge that signals including SN109 were inadequate and created a risk of collision. The knowledge arose from (a) site inspections from January 1995; (b) intimate involvement in investigations into SPADs in the vicinity of Paddington; (c) the history of SPADs in the Paddington area – 67 between 1 February 1993 and 2 July 1999, a figure which was exceptionally high; (d) the fact that SN109 had been passed at danger on 8 occasions since 5 October 1999, and was one of the 22 most frequently SPADed signals on the entire railway; (e) the introduction of the Overhead Electric in 1995 which further restricted visibility; (f) the fact that Thames Trains had expressed concern from at least February 1995; (g) the collision that in fact occurred on 10 November 1995 at Royal Oak in consequence of a SPAD at SN74; (h) the SPAD at SN 109 on 4 February 1998; (i) Recommendation 12 of the Royal Oak Inquiry that a review of minimum signal sighting times in respect of signals including SN109 be undertaken.

(11) They persisted in what the HSE characterised as a 'light touch' approach to enforcement when they knew or ought to have known that it failed to achieve a safe railway.

Approach to Strike Out

7. The setting out of the above allegations demonstrates the enormous amount of detail about which at this stage the court is completely ignorant. It is not clear precisely how the HMRI carries out its task normally, and/or how the HMRI carried out its task during the material period. Some material has been put in by each side outside the pleading. Mr Carlisle QC has put before us an interesting history of the regulatory framework for railway health and safety (appendix G to a report entitled "Ensuring Safety on Britain's Railways"). Lord Brennan QC has put in a quote from the website of the HSE, (see paragraph 13 of the Respondent's skeleton argument). It is not satisfactory to look at what may be incomplete material of this kind about which no one has actually given evidence. It is not precisely clear from the pleaded case the extent to which the HMRI was actually involved at any stage with Railtrack in the process of design of the signalling system which included SN109. It is not precisely clear what part they actually played in the process of considering what measures were necessary to avoid SPADs at SN109 in particular or at any of the signals where SPADs were taking place in the Paddington area. But it is clear that they are alleged to have played a part. It is not clear how dangerous the HMRI themselves perceived the incidence of SPADs to be or what actual decisions were taken by the HMRI from time to time over the period and if they were taken, how they were taken and for what reasons. Only full disclosure and full factual inquiry will demonstrate the answer to these questions.
8. It is only if the court could be certain that however the facts were ultimately to turn out that the HSE could never be held liable, that it should contemplate striking out the claim at this stage. Lord Browne-Wilkinson in Barrett v Enfield London Borough Council [1999] 3 WLR 79 at page 83(D) said:-

"In my speech in the Bedfordshire case [1995] 2 AC 633, 740-741 with which the other members of the House agreed, I pointed out that unless it was possible to give a certain answer to the question whether the plaintiff's claim would succeed, the case was inappropriate for striking out. I further said that in an area of the law which was uncertain and developing (such as the circumstances in which a person can be held liable in negligence for the exercise of a statutory duty or power) it is not normally appropriate to strike out. In my judgment it is of great importance that such development should be on the basis of actual facts found at trial not on hypothetical facts assumed (possibly wrongly) to be true for the purpose of the strike out."

The Judge's Decision

9. The judge was of the view that there was no reasonably arguable case that the HSE owed a statutory duty giving rise to a private right so far as passengers on trains were concerned, but he was of the view that he could not be certain that the HSE did not have a liability for breach of a common law duty of care. He was furthermore of the view that it was better that a decision should be taken on that question after a trial and a full review of the facts.

My Conclusion

10. In my view the judge was entirely right. I think it is possible to say simply by reference to the terms of the statute relied on that there was no statutory duty owed which gave rise to a private right in damages. I am however quite uncertain as to whether on a full examination of the facts the HSE may not be held to owe a common law duty of care and be held to be in breach of it.
11. I will deal with why in my view the judge was right in relation to breach of statutory duty first. Once having set the statutory background I will deal with the common law duty of care aspect fairly shortly. It seems to me that once one has taken the decision that a full factual investigation should take place before a decision is finally made as to whether the HSE can be liable for breach of a common law duty of care, it is inconsistent with that view to embark on a full review of the authorities considering arguments on liability by reference to various alternative factual bases. I mean no disrespect to the arguments of Mr Carlisle QC or Lord Brennan QC, nor to the industry of both sides in their accumulation of the relevant authorities, but at this stage it seems to me right to keep discussion of the authorities to a minimum.

Breach of Statutory Duty Simpliciter

12. Lord Brennan QC for the respondents has only sought to argue one aspect of the case originally put forward before the judge. He argues that Regulation 4 of the Railway and Other Transport Systems (Approval of Works, Plant and Equipment) Regulations 1994 gives rise to a private law cause of action for breach. Regulation 4 provides as follows:-

"4(1) …… the approval of the Health and Safety shall be obtained before-

(a) any new works, plant or equipment; or

(b) any altered works, plant or equipment, which is capable of materially affecting the safe operation of a relevant transport system, are first brought into use for the purposes of that system.

4(4) In ascertaining the time when any new works, plant or equipment or altered works, plant or equipment are first brought into use, subject to any requirements of the [Health and Safety Executive] under regulation 11(1), no regard shall be had to any period during which such new works, plant or equipment or such altered works, plant or equipment are-

(a) necessarily used in order to avoid interruption to the operation of existing transport services before sufficient information is available for a decision to be made on an application for approval; or

(b) with the prior written consent of the [Health and Safety Executive] used for the purposes of

(i) any testing or trials, provided that the testing or trials are conducted in accordance with the terms of such consent; or

(ii) obtaining information to prove their satisfactory performance in connection with an application for approval."

13. Lord Brennan QC suggests that Regulation 4 was intended to protect users of the railways, both passengers and train operators, and he suggests that "Parliament intended to confer on that limited class of people a private law cause of action". He suggests that that intention is to be inferred by reference to factors identified by Lord Browne-Wilkinson in X v Bedfordshire (at 731). The factors relied on are:-

" (i) There is no statutory exclusion of liability;

(ii) There is a statutory duty to act;

(iii) Exercising the statutory duty is an operational matter the nature of which does not involve matters of policy;

(iv) the statute provides no remedy for breach;

(v) The statute is not concerned with matters which are not susceptible to judicial scrutiny: in particular it is not concerned with matters of social policy, or economic welfare or an administrative framework, but rather with matters of safety of the travelling public and those who transport them over infrastructure Parliament has directed should only be used if approved for that purpose by the Appellants."

14. One difficulty with Lord Brennan QC's argument is that the statutory duty on which he relies has to be inferred. The regulation requires Railtrack to obtain approval, and does not expressly provide for there being any duty owed to any individual or any class of individuals. It is clearly right that it was the intention of Parliament that passengers and train operators would be protected by a system under which Railtrack had to seek approval for any alteration or works which might affect safety, but I do not think that one can say that Parliament only had that limited class of persons in mind. In truth Parliament had in mind anybody who might be affected by the railway being unsafe, including users, of course, but also those who lived or walked or drove beside or over the railway – indeed it truly had in mind all members of the public. In any event as Lord Browne-Wilkinson said in X v Bedfordshire at 731 H-732 A:-

"Although the question is one of statutory construction and therefore each case turns on the provisions in the relevant statute, it is significant that your Lordships were not referred to any case where it had been held that statutory provisions establishing a regulatory system or a scheme of social welfare for the benefit of the public at large had been held to give rise to a private right of action for damages for breach of statutory duty. Although regulatory or welfare legislation affecting a particular area of activity does in fact provide protection to those individuals particularly affected by that activity, the legislation is not to be treated as being passed for the benefit of those individuals but for the benefit of society in general."

15. It would in my view take clear words for the imposition of a statutory duty enforceable by an action for damages on a regulatory body such as the HSE and Regulation 4 does not provide such a remedy.

Common law duty of care

16. The above, of course, provides a starting point for Mr Carlisle QC's argument. He further emphasised the broader statutory framework in which the question of liability at common law has to be considered. He took us, as he had done the judge, through the relevant provisions of the Health and Safety at Work Act 1974. He emphasised the general purpose (section 1); he emphasised that the HSE's functions were performed on behalf of the Crown and any liability to pay damages would be a charge on the tax payer (section 10(7)). He emphasised that the primary obligations imposed are the employer's for the benefit of employees and other persons (sections 2-9). He emphasised how contravention gave rise to criminal sanctions where the HSE were the prosecutors (sections 33 and 38) and submitted how unlikely it was that a prosecutor should be held civilly liable for failure to prosecute. He pointed to section 47 which provides:-

"(1) Nothing in this Part shall be construed-

(a) as conferring right of action in any civil proceedings in respect of any failure to comply with any duty imposed by sections 2 to 7 or any contravention of section 8; or

(b) as affecting the extent (if any) to which breach of a duty imposed by any of the existing statutory provisions is actionable.

(2) Breach of a duty imposed by health and safety regulations…shall, so far as it causes damage, be actionable except in so far as the regulations provide otherwise."

He suggested that the judge was right in suggesting that if the HSE were to be civilly liable for the non-exercise of its statutory powers one would have expected Parliament to have expressly said so.

17. He referred us to sections 18-26 which provide the enforcement regime. The HSE is the enforcing body (see section 18(1)). He suggested that the judge's conclusion by reference to this regime was entirely correct when he said in paragraphs 36-38:-

"36. This is essentially a public law duty. The working is contra-indicative of the Executive being civilly liable in damages for non-performance of its statutory duty or at common law in failing to take reasonable care for the safety of the victims of the rail crash by not exercising its statutory duties and powers. This is reinforced by the wording of Section 20 Powers of Inspectors, Section 21 Improvement notices, and Section 22 Prohibition Notices.

37. Section 22 reads:-

"If as regards any activities to which this section applies an inspector is of the opinion that, as carried on or [likely] to be carried on by or under the control of the person in question, the activities involve or, as the case may be, will involve a risk of serious personal injury, the inspector may serve on that person a notice (in this Part referred to as "a prohibition notice")

38. The underlining is mine and emphasises the discretionary nature of the exercise of this power."

18. He further submitted that the case made against the HSE was that they had "omitted" to exercise their statutory powers and (1) it was it not alleged they had acted outside their powers and (2) the statutory framework in any event, pointed conclusively against Parliament having intended to make the HSE civilly liable in damages at common law or otherwise.
19. The lynch pin of his argument was Stovin v Wise [1996] AC 923 which he described as the "definitive case specifying the circumstances in which a duty of care arises from the existence of a statutory power."
20. The circumstances of Stovin v Wise were that an accident had occurred on a road where the sight of the driver had been obscured by a mound which the local authority had the power but not a duty to remove. They had contemplated removing the same but had failed to do so by the time the accident took place. The court was concerned with the existence of a statutory power, and an "omission" by the Local Authority i.e. a non-exercise of that power. The majority was in favour of reversing the decision of the Court of Appeal, which had held the Local Authority in breach of a duty of care. Lord Hoffmann giving the judgment of the majority (Lord Goff and Lord Jauncey agreeing with his speech) summarised his view as follows:-

"In the case of a mere statutory power, there is the further point that the legislature has chosen to confer a discretion rather than create a duty. Of course there may be cases in which Parliament has chosen to confer a power because the subject matter did not permit a duty to be stated with sufficient precision. It may nevertheless have contemplated that in circumstances in which it would be irrational not to exercise the power, a person who suffered loss because it had not been exercised, or not properly exercised, would be entitled to compensation. I therefore do not say that a statutory "may" can never give rise to a common law duty of care. I prefer to leave open the question of whether the Anns case was wrong to create any exception to Lord Romer's statement of principle in the East Suffolk case and I shall go on to consider the circumstances (such as "general reliance") in which it has been suggested that such a duty might arise. But the fact that Parliament has conferred a discretion must be some indication that the policy of the act conferring the power was not to create a right to compensation. The need to have regard to the policy of the statute therefore means that exceptions will be rare.

In summary, therefore, I think that the minimum preconditions for basing a duty of care upon the existence of a statutory power, if it can be done at all, are, first, that it would in the circumstances have been irrational not to have exercised the power, so that there was in effect a public law duty to act, and secondly, that there are exceptional grounds for holding that the policy of the statute requires compensation to be paid to persons who suffer loss because the power was not exercised."

21. Mr Carlisle suggested that the above summary showed that Lord Hoffmann contemplated two conditions having to be established before the non-exercise of a discretionary power under statute would become actionable – irrationality and the existence of exceptional grounds for holding that the policy of the statute required compensation to be paid to persons who suffer loss because the power was not exercised. He submitted that neither condition could be satisfied in this case or that even if the pleading could be said to present an arguable case of irrationality, the second condition was an independent hurdle which the claimants could not surmount.
22. He also suggested that even if the minority judgment of Lord Nicholls (with whom Lord Slynn agreed) provided the guiding principles the HSE would succeed. This submission was based on Lord Nicholls' requirement for "special circumstances, beyond the mere existence of the power, rendering it fair and reasonable for the authority to be subject to a concurrent law duty sounding in damages" [936H], and an analysis of the circumstances which would have persuaded Lord Nicholls to impose the duty in that case as set out from 939G to 941D. Mr Carlisle submitted that many of the reasons did not apply in this case, and thus that the exceptional circumstances required by Lord Nicholls did not exist.
23. Lord Brennan QC submitted that the judge was right in taking the view that the instant case could arguably be distinguished from Stovin v Wise. He relied on various distinguishing features. It seems to me that his submissions have force, and I, like the judge, am not clear that Stovin v Wise provides a certain answer in the HSE's favour.
24. First, I am not clear at present that the case against the HSE is confined to "omissions" alone. The pleading includes allegations of conduct whereby it is alleged that the HSE assumed responsibility by their actual involvement in the design or positioning of SN109, or the safety of the track outside Paddington generally; the allegation is also that the HSE permitted an unsafe signalling system, not simply that they did nothing. It is arguable that the Stovin v Wise double condition requirement does not apply outside the discretionary non-exercise of a power case. As to the first condition "irrationality" in Kane v New Forest DC [2002] 1 WLR312 the Court of Appeal distinguished Stovin v Wise holding that where a planning authority had "permitted" or "required" the construction of a foreseeably dangerous footpath, or if they assumed responsibility for the removal of the danger, they were arguably liable for the personal injury of the person who was injured. Irrationality was not the test. Furthermore in Kane there was no suggestion that the second limb of Lord Hoffmann's dictum was applicable.
25. Second, if this was a discretionary non-exercise of power case, it can be argued as it could not be argued in Stovin v Wise, that the public and in particular passengers would rely on the HSE performing their duty. In the context of a track run by Railtrack with individual rail companies profiting from its use, the outside and independent regulator ensuring safety is arguably an important safeguard on which rail users rely. In Lord Hoffmann's speech it seems to me that he recognises the possibility that where there is general reliance on what a "public authority was supposed to do. Powers of inspection for defects clearly fall within this category" [954E], that might give rise to a duty of care. Reliance is certainly recognised as a possible basis in the minority opinion [937F-938C].
26. Third, Lord Brennan's retort to Mr Carlisle QC's reliance on the non-existence of the factors that persuade Lord Nicholls to treat Stovin v Wise as exceptional, was to seek to demonstrate that in fact the factors did exist. In my view the reasons why liability might be imposed on the HSE may be different to the reasons why liability might be imposed on the Local Authority in Stovin v Wise and since it is certainly not clear to me that Lord Nicholls would have been less likely to put the HSE in the exceptional category than he was the Local Authority in that case, in the light of his treatment of Swanson Estate v Canada (1991) 80 DLR (4^th) 741 at page 938 F to which I am about to turn, this is a further area where it would be unhelpful to express views on precisely what may make this a case where a duty of care should be imposed or factors which may make it inappropriate to impose such a duty. It is better to allow those arguments to be developed in the context of the fuller facts which will be available at trial.
27. Fourth, Lord Nicholls in his speech recognised that a "power to control air safety" referring with apparent approval to Swanson Estate v Canada (1991) 80 DLR (4^th) 741 was at the edge of the spectrum "where comparatively little extra may be needed to found a common law duty of care owed to a particular person or class of persons". Swanson was a decision of the Canadian Federal Court of Appeal by which that court upheld a decision that Transport Canada was negligent in allowing an airline to continue its unsafe practices. Air safety is very arguably analogous to the safety of the railways. Furthermore in Perrett v Collins [1998] 2 Lloyd's Law reports 255 the Court of Appeal here held that an Inspector who provided a certificate of fitness to fly under the regulatory regime provided by the Civil Aviation Act 1992 owed a common law duty of care.
28. Mr Carlisle sought to persuade us that Lord Hoffmann and the majority in Stovin v Wise actually disapproved the decision in Swanson when dealing with certain Canadian Highway Authority cases at page 955E-H. I do not read his speech in that way. He further pointed out that Stovin v Wise was not cited in Perrett. That is true, but the principles and reasoning in Perrett to my mind make it more likely that a court will distinguish Stovin v Wise, than hold Perrett to have been wrongly decided.
29. Finally, I should say that even if this case turns out to be an omission to exercise a power case and to be governed by the decision in Stovin v Wise, it is not clear on the facts as pleaded that the conduct of the HSE would not be found to be irrational. As to the applicability of Lord Hoffmann's second hurdle and as to whether the statute should be construed so as to limit compensation, each statute must be looked at individually. In Larner v Solihull M.B.C. [2001] R.T.R. 32 Lord Woolf in a judgment of this Court recognised that in cases concerned with the exercise of discretion, (in that case section 39 of the Road Traffic Act 1988), a common law liability could exist where it could be shown that the default of the Local Authority fell outside the ambit of its discretion i.e. where it acted wholly unreasonably. This is consistent with Lord Hoffmann's first condition of irrationality. But Lord Woolf clearly contemplated that at least where Section 39 of the Road Traffic Act was concerned that the second condition did not apply to prevent payment of compensation. In the light of Larner it seems to me that if the claimants cannot succeed other than by establishing irrationality, but did establish the same, there would remain a difficult but eminently arguable point as to whether the second hurdle identified by Lord Hoffmann would apply in this case.
30. As I have already indicated, tempting as it may be to attempt a more comprehensive analysis of the authorities, since I am clear that Mr Carlisle QC holds no trump card at this stage, and since I am clear that the ultimate resolution of whether the HSE did owe a duty of care in the particular circumstances of this case should await a trial of the facts, I will say no more. I would dismiss the appeal.

Mantell LJ:

31. I agree.

May LJ:

32. I agree that this appeal should be dismissed for the reasons given by Waller LJ whose account of the facts and circumstances of the appeal I gratefully adopt.
33. We are concerned at this stage only with the question whether Thames Trains' claim for contribution against the Health and Safety Executive should be struck out as being brought without reasonable grounds. Mr Hugh Carlisle QC on behalf of the HSE accepted that he had to persuade us that each of the causes of action relied on was in law incapable of subsisting whatever the facts. He understandably shunned the expression "blanket immunity", but that is what in substance he had to maintain.
34. The HSE is a body created by statute with statutory powers and some statutory obligations. Speaking entirely generally, it is intrinsically possible for such a body to argue successfully that the statute or statutes under which it operates are to be construed as not exposing it to the possibility of a claim for breach of statutory duty; and that there is no possibility of a parallel cause of action for common law negligence. In the present case, I agree with Waller LJ that Morland J was correct to conclude that Regulation 4 of the Railway and Other Transport Systems (Approval of Works, Plant and Equipment) Regulation 1994 does not impose a statutory duty enforceable by an action for damages. But a parallel claim in negligence may be another matter. The strong tide of modern authority is against striking out such claims without first ascertaining the full facts at a trial. One such authority is Barrett v. Enfield London Borough Council [2001] 2 AC 550. Waller LJ has cited in paragraph 8 of his judgment a passage from the speech of Lord Brown Wilkinson at page 557E. I considered the Barrett decision among others at length in S. v. Gloucestershire County Council [2001] 2 WLR 909. I adhere to the analysis and conclusions which I expressed in that case. These included at page 931G-H the observation that, where the failing alleged has related to a discretionary decision which is empowered by statue, the court has been hesitant to say that the exercise of the discretion was wrong unless it was plainly wrong; but that there is now a clear recognition that there may be circumstances where an ordinary common law claim in negligence on Caparo principles may be academically possible and, in an appropriate case, succeed in fact. For completeness that discussion would need to be brought up to date by reference to subsequent decisions, for example the European Court of Human Rights decision in Z v. United Kingdom (2002) 34 EHRR 3 page 97. I read that decision as drawing back somewhat from the court's previous decision in Osman v. United Kingdom 29 EHRR 245, but acknowledging for Strasbourg purposes the analysis of the House of Lords in the Barrett case – see paragraph 100 of the court's judgment in the Z case.
35. In the present appeal, I agree with Waller LJ that a comprehensive analysis of the authorities is not necessary. We are concerned only with whether Thames Trains have no reasonable ground for bringing their claim. What follows is an outline of what I consider to be an arguable claim available to them on the pleadings depending on eventual factual findings. I say nothing about whether the claim will ultimately succeed.
36. Part 1 of the Health and Safety at Work Act 1974 is concerned, among other things, with protecting people against risks to their safety arising out of the activities of persons at work (section 1(1)(b)). Passengers on trains and train drivers are respectively such people and persons. Employers (e.g. train operators) have a statutory duty to ensure so far as is reasonably practicable that persons who may be affected by their undertaking (e.g. train passengers) are not exposed to risk to their safety (section 3). The HSE has a duty to make adequate arrangements for enforcing relevant statutory provisions (section 18(1)). Their inspectors have powers of enforcement (section 20). They may serve improvement notices if they consider that statutory provisions are contravened (section 21) and prohibition notices if they consider that activities will involve a serious risk of personal injury (section 22).
37. Subject to certain qualifications, new or altered works, plant or equipment which are capable of materially affecting the safe operation of a relevant transport system require the approval of the HSE before they are first brought into use (paragraph 4 of the 1994 Regulations). The HSE thus has discretionary statutory power to approve or disapprove; perhaps a statutory duty to do one or the other. This may be linked with their discretionary statutory powers under the 1974 Act to serve improvement or prohibition notices. It is in my view at least arguable that the exercise or failure to exercise these powers could give rise to a common law claim in negligence on Caparo principles if action or inaction by the HSE was plainly wrong.
38. Driving a passenger train over a red signal is obviously dangerous and a breach of statutory duty by the train operator involving a serious risk of personal injury. Signals are plant or equipment capable of materially affecting the safe operation of the railways. It is alleged that SN 109 was or was part of new or altered works, plant or equipment. It required approval or disapproval, yet HSE did neither. They permitted the relevant part of the system to be used in the state in which it was. It is alleged that, for reasons which are pleaded, train drivers were likely sometimes to fail to see that SN 109 was at red and to drive over it. Whatever the reasons, it is alleged that HSE knew that SN 109 constituted a serious danger. It was one of the 22 signals in the country most frequently passed at red. We were told that it was in fact 15^th on the list. It was known to have been passed at red on 8 occasions before 5^th October 1999.
39. Granted that a common law duty of care may be difficult to sustain in circumstances such as these, I consider that these outline alleged facts are sufficiently stark to constitute at least an arguable basis for a viable claim against HSE by an injured passenger. Mr Carlisle did not persuade me that the statutory regime properly understood was incapable of sustaining such a claim whatever the facts. I acknowledge that he might possibly be more successful with this submission after full consideration at a trial, but I certainly think that should follow proper disclosure and evidence.
40. Thames Trains put their case in an alternative way. They plead that HSE have specialist skills and knowledge. They plead a series of facts in the sub-paragraphs following paragraph 4(iii) of the Amended Particulars of Claim, which Waller LJ has summarised at paragraph 6(5) of his judgment. From these it is alleged that HSE assumed responsibility for passengers' safety and thereby owed them a duty of care.
41. There is much authority which considers assumption of responsibility as the foundation of a duty of care in tort. Hedley Byrne v. Heller & Partners [1964] AC 465 is a cardinal starting point and Henderson v. Merrett Syndicates Limited [1995] 2 AC 145 underscored the concept with reference to claims for economic loss. I considered these and other authorities in a different context in Merrett v. Babb [2001] QB 1174, in which I suggested in paragraph 21 that the Caparo strand of consideration and the Henderson strand in reality merge. It is often a helpful guide in particular cases to ask whether the defendant is to be taken to have assumed responsibility to the claimant to guard against the loss for which damages are claimed. But the question in each case is whether the law recognises that there is a duty of care.
42. In the present case there was catastrophic physical injury, but it was not directly inflicted by HSE nor in any meaningful sense did they inflict it indirectly. There may in the end in a case such as this be no material conceptual difference between a Caparo analysis and a Henderson analysis. Yet in my judgment the facts pleaded in support of assumption of responsibility cannot be blown away at this stage as incapable of sustaining a duty of care owed by HSE to passengers.
43. Mr Carlisle submits that the claimants cannot overcome Stovin v. Wise [1996] AC 923. The high point in support of the submission is this paragraph in the opinion of Lord Hoffmann at page 953D

"In summary, therefore, I think that the minimum preconditions for basing a duty of care upon the existence of a statutory power, if it can be done at all, are, first, that it would in the circumstances have been irrational not to have exercised the power, so that there was in effect a public law duty to act, and secondly, that there are exceptional grounds for holding that the policy of the statute requires compensation to be paid to persons who suffer loss because the power was not exercised."

44. Mr Carlisle did not persuade me that the first of Lord Hoffmann's minimum preconditions was incapable of being achieved in this case. A judicial review claim against the HSE seeking an order requiring them to perform a public law duty to take steps to have SN 109 made safe may be difficult to envisage on purely practical grounds. But the pleaded facts about SN 109 are on one view pretty stark. I do not consider that a case that it was irrational of HSE not to have exercised their powers is one which upon full factual investigation is bound to fail.
45. As to Lord Hoffmann's second precondition, I see the force of the submission by reference to this paragraph alone that the policy of the legislation has to be found from within the legislation itself without reference to facts particular to the case. But wider considerations may suggest that this submission is insecure.
46. In Stovin v. Wise itself, the judge had made no finding as to whether it would have been irrational for the council not to have done the work proposed to improve visibility at the junction where the accident occurred. Lord Hoffmann pointed to evidence which indicated that it would have been very difficult so to find. It seemed to him therefore that the question whether anything should have been done about the junction was at all times firmly within the area of the Council's discretion. They were therefore not under a public law duty to do the work, and the first of his preconditions for the imposition of a duty of care was not satisfied.
47. Larner v. Solihull Metropolitan Borough Council [2001] RTR 469 concerned section 39 of the Road Traffic Act 1988, which section requires local authorities to take specified steps designed to promote road safety. These include, in sub-section 3(3)(b), the requirement to take such measures as appear to the authority to be appropriate to prevent accidents arising out of the use of vehicles on roads, other than trunk roads within their area. The Court of Appeal held that there could be circumstances of an exceptional nature where common law liability could arise in relation to the duty under section 39. But for that to happen, it would have to be shown that the default of the authority fell outside the ambit of the discretion given to it by section 39 and that would happen if an authority acted wholly unreasonably. Lord Woolf CJ, giving the judgment of the court, said at page 473 that a statutory body must give proper consideration to the exercise of its powers, and a failure to exercise a power may in a particular factual situation be so unreasonable as to amount to a breach of duty. If the only reasonable way in which it could exercise its discretion is to act in a particular way, the body becomes under a duty to act in that manner and there can be a duty to act at common law as well as under the statute. As I read this judgment, the court in substance applied the decision of the House of Lords in Stovin v. Wise to section 39 of the 1988 Act. In doing so, it seems that the relevant factual situation was that of the particular case. The inquiry was not limited to the facts underlying the policy of the statute itself. Further, for the desirability of a duty in an exceptional case, the court at paragraph 16 on page 475 adopted the reasons of Lord Nicholls of Birkenhead in Stovin v. Wise.
48. In Kane v. New Forest District Council [2002] 1 WLR 312, a local planning authority which permitted or required the construction of a foreseeably dangerous footpath were held to have assumed responsibility to those, including the claimant, who might wish to use the footpath to see that it was not open until the danger was removed. The court considered and distinguished Stovin v. Wise. On the facts of that case, the defendants were not immune from a claim in negligence because they were exercising a statutory function under planning legislation. In Perrett v. Collins [1998] 2 Lloyds LR 255, this court held that a Flying Association and their inspector, who were approved and required to inspect and approve an aircraft before its owner could obtain a certificate of airworthiness, had undertaken to discharge a statutory duty for the protection of the public and were under a duty of care to the plaintiff passenger who was injured when the aircraft crashed. The regulatory framework provided by the Civil Aviation Act 1982 was designed at least in substantial part for the protection of those who might be injured if an aircraft was certified as being fit to fly when it was not. Stovin v. Wise was not apparently cited, but the decision is difficult to reconcile with the restrictive interpretation of Stovin v. Wise for which Mr Carlisle contends. Larner, Kane and Perrett are but three of a number of authorities which in my view indicate that blanket immunity, whatever the facts, in favour of a statutory body is a difficult position to sustain. I do not consider that Stovin v. Wise concludes the matter in the present case at the present stage without factual findings and the application to those facts of a wide body of authority.
Order: appeal dismissed with costs; permission to appeal against costs order below refused; appellant to have costs of today; permission to appeal to the House of Lords refused.