A Blow Against Enterprise Liability
| Published date | 01 November 1971 |
| Date | 01 November 1971 |
| DOI | http://doi.org/10.1111/j.1468-2230.1971.tb01313.x |
| Author | R. W. L. Howells |
NOTES
OF
CASES
A BLOW
AGAINST
ENTERPRISE
LIABILITY
THE recent decision of the House of Lords in
Tesco Supermarkets
Ltd.
v.
Nattrass
is of the greatest importance. Not only does
it
throw valuable light on the interpretation of the penal provisions of
the Trade Descriptions Act
1968,
and of the similar provisions to be
found in much contemporary public welfare legislation, but
it
also
takes a leading place in the present move away from strict liability
in statutory offences.2 deals fully with the facts of the
case, and the decision of the Divisional
COUF~.~
Briefly,
a
breach of
section
11
of the Act, penalising misleading statements
as
to
the
price of goods, had been established at the Northwich branch
of
Tesco’s organisation. This breach was attributed
to
the joint
neglect of duty of
a
store assistant and her branch manager. On
these facts the company were convicted by the local magistrates,
and the conviction upheld by the Divisional Court. The company
obtained leave to appeal to the House of Lords.
The appeal involved the interpretation of section
24
(1)
of the
Act, which provides that
it
shall be a defence for
a
person
charged
to prove
(inter a2ia)-
“
(a)
that the commission of the offence was due
.
.
.
to
the
act
or
default of another person
. .
.;
and
(b)
that he
took
all reasonable precautions and exercised all
due diligence to avoid the commission of such
an
offence by
himself
or
any person under his control.”
The points of law of general public importance involved in the
appeal were-
(i)
whether the phrase
“
another person
”
included servants
of the accused; and
(ii) whether the accused remained vicariously liable
for
the
failures of persons to whom he had delegated the perform-
ance of his obligations under section
24
(1)
(b).
A
recent note in this
Review
Their Lordships unanimously allowed the company’s appeal.
dealt summarily
with
the doctrine of vicarious
responsibility based upon delegation
of
duty, saying,
“
The Divi-
sional Court decided this case upon a theory of delegation. In that
Lord Reid
1
[1971] 2
W.L.R.
1167; [1971] 2
All
E.R.
127.
2
As
recently
desoribed
in
F.
G.
Jacobs,
Criminal
Responsibility,
L.S.E.
Research
Monograph
No.
8,
1971.
3
B.
N.
Barrett
(1971)
34
M.L.R.
2X.
4
[1970]
3
All
E.R.
357.
5
[l971]
2
W.L.R.
at
pp.
1174-1180.
676
Nov.
1971
NOTES
OF
CASES
677
they were following some earlier authorities. But they gave far
too wide
a
meaning to delegation.
. .
.”
His
Lordship wished to
limit $he concept of delegation
to
that of the necessary identification
of the senior management of a corporation wi,th the corporation
itself for purposes of criminal responsibility for
the
discharge of
some statutory duty. He recognised that delegation
of
funotions by
individuals had been accepted in the liquor cases, but regarded
thak development as
(‘
anomalous.”
He
distinguished delegation in this sense from the broad pro-
position that an employer
(‘
delegated
”
his duties of supervision
to
all within the
‘‘
ladder of responsibility
”
down to the immediwte
superior of the actual wrongdoer; a proposition that had been
accepted by the Divisional Court in
Tesco’s
case.
Lord Reid deplored the holding of an employer criminally liable
under the Act except in circumstances in which he was in some way
ak
fault; for
if
he had personally done his best, how could the
prospect
of
punishment induce him to do more? Likewise, his
Lordship did not accept that vicarious responsibility might redress
the balance between large and small enterprises in complying with
the Act; as the manager in this case was the
“
opposiite number
”
of
a
small shopkeeper, he was equally liable to prosecution.
Lord Morris of Borth-y-Gest acknowledged that
a
bbeakdown in
the system had occurred at the appellants’ store. But he was sure
that the company had not delegated their functions
to
Mr. Clement
;
he was not within the
((
brain area
”
of the company; he was
‘(
.
.
.
a
cog in the machinery which was devised;
it
was not left to
him
to
devise it.
.
.
.
Viscount Dilhorne
lo
said that to satisfy section
24
(1)
it
was
necessary
It0
do more than merely
to
set up
a
system and delegate its
performance
to
subordinates;
it
would still be necessary
to
show due
diligence on the part of the accused in seeing that the system was in
fact operated and the person put in charge of it doing what he was
supposed
to
do. His Lordship considered that, under sections
28
and
24
of
the A&,
it
might well
be
that
no
person would be held
liable; accordingly neither Miss Rogers (the assistant) nor
Mr.
Clement (her manager) might be guilty of an offence, although their
combined neglect of their duties constituted the
(‘
act
or
default
”
which had relieved their employers from criminal liability.
Lord Pearson
l1
observed that, under the doctrine
of
delegation
at
its widest-“.
.
.
the master can be said to
‘
delegate
’
to
every
servant acting on his behalf all the duties which the servant has
to
perform.”
l2
But his Lordship concluded that that wide dootrine
$9
9
6
At p. 1180.
7
Pirst
propounded in
Avards
v.
DUIICC
(1862),
26
J.P.
43;
applied without
enthusiasm
by
the
House
of
Lords
in
Vane
v.
Yiannopoullos
,39641
3
W.L.R.
1218.
*
[1971]
2
W.IJ.R.
st
pp.
1181-1187.
9
At
p.
1186.
‘0
pp. 1187-1193.
l1
pp.
1193-1198.
12
At
p.
1197.
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