Gross vs. Simple Negligence

November 2016

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Where claims are pursued - whether in contract or tort – it is not infrequent that allegations of “gross negligence” are made by a claimant. Whilst the word “gross” may have a particular meaning in some jurisdictions, English Law does not draw a distinction between ‘negligence’ and ‘gross negligence’. Either the conduct is negligent in the sense that there has been a breach of a duty to take reasonable skill and care to perform contractual obligations or to avoid acts or omissions that might cause foreseeable injure, or it is not.

Where gross negligence may have relevance under English law is if there is an express reference to the term in a contract. If so the question is, whether the parties to the contract intended to limit the circumstances in which any breach could be alleged by raising the threshold for the duty of care owed by one party to the other. For example, is an indemnity triggered by gross negligence less burdensome than one where the threshold is straightforward negligence?

Disputes can, therefore, arise as to what was intended by the use of the term “gross” negligence and, if there is any difference between ‘gross’ and ‘simple’ negligence , if the alleged conduct of the wrongdoer is sufficiently serious to constitute “gross” negligence. 

The English law approach to the meaning of gross negligence ranges between the view that ‘gross’ adds little or nothing to negligence such that gross negligence is just negligence with an added adjective - Willson v Brett (1843) 12 LJ Ex 264), to the more modern view that the addition of the word ‘gross’ does add something to negligence, with the difference being one of degree and not of kind - Camerata v Credit Suisse [2011] EWHC 479 (Comm). 

In Camarata Property v Credit Suisse Securitie [2011] the claimant alleged that the defendant’s negligence was the cause of their investment loss. Whilst the claim ultimately failed the court did consider and reject the argument that a distinction should be drawn between negligence and gross negligence. Instead the focus was on the meaning of the relevant provisions of the banks terms and conditions, which stated the bank was not liable for any advice it provided unless that liability arose “directly as a consequence of the gross negligence, fraud or wilful default of us or any of our directors, officers, or employees”.

The terms and conditions had used both “negligence” and “gross negligence” which indicated intent to distinguish between the two. This was important because it meant that more than mere negligence was required on the defendant’s before the bank could be liable to the claimant.

The court also referred to the case of Red Sea Tankers Ltd v Papachristidis (The Ardent) 1997 LLR 2 548 in which Mance J said: 

"If the matter is viewed according to purely English principles of construction1, I would reach the same conclusion. Gross negligence is clearly intended to represent something more fundamental than failure to exercise proper skill and/or care constituting negligence ... as a matter of ordinary language and general impression, the concept of gross negligence seems to me capable of embracing not only conduct undertaken with actual appreciation of the risks involved, but also serious disregard of or indifference to an obvious risk." 

The Judge further explained that gross negligence may include “conduct which a reasonable person would perceive to entail a high degree of risk of injury to others coupled with heedlessness or indifference to or disregard of the consequences. The heedlessness, indifference or disregard need not be conscious.”

It is perhaps unlikely that as a matter of English law a definition of “gross negligence” will be formulated. The English law approach is to reflect the natural and ordinary meaning of the words (See article A More Literal Approach to Construction) and, as such, whilst always a question of construing the contract as a whole it is possible that “gross negligence” will be construed as meaning something more than mere negligence. If so, Mance J’s words are likely to be instructive.

    

Article by Georgia Lansbury
Claims Executive
Americas Syndicate 

  

1The contracts were subject to New York law.