Lecture

• Author: The Right Honourable Lord DYSON Master of the Rolls, England and Wales.
• Date: 01 December 2015
• Published date: 01 December 2015

SINGAPORE ACADEMY OF LAW DISTINGUISHED SPEAKER SERIES LECTURE 2014 —“THE LIMITS OF THE COMMON LAW”*

1 Sixty-five years ago Richard O'Sullivan KC gave the second Hamlyn Lecture series. His subject was the common law. At the start of his first lecture he said this:1

The Common Law of England is one of the great civilising forces of the world.

Over a long series of centuries men have recorded their conviction of its essential worth and excellence.

The common law has been developed in England and Wales by the judges over many years. But the power of the judges to develop the law has always been subject to limits. In In re Spectrum Plus Ltd, Lord Nicholls said:2

The common law is judge-made law. For centuries judges have been charged with the responsibility of keeping this law abreast of current social conditions and expectations. That is still the position. Continuing but limited development of the common law in this fashion is an integral part of the constitutional function of the judiciary. Had the judges not discharged this responsibility the common law would be the same now as it was in the reign of King Henry II. It is because of this that ‘the common law is a living system of law, reacting to new events and new ideas, and so capable of providing the citizens of this country with a system of practical justice relevant to the times in which they live’.

As always, Lord Nicholls expressed himself with consummate elegance. There is, however, no real clue here as to the limits of legitimate development of the common law by the judges, as to where the boundary lies between judge-made law and what is properly a matter for legislation.

2 Between at least the early part of the 20th century and about 1990, it had been generally understood that there was no right of recovery in restitution of money paid pursuant to an ultra vires demand by a public authority. This state of the law was overturned by the House of Lords in the great case of Woolwich Equitable Building Society v Inland Revenue Commissioners3 (“Woolwich”). One argument advanced against the recognition of such a principle was that to do so would overstep the boundary that we traditionally set for ourselves, separating the legitimate development of the law from legislation. As to this objection, Lord Goff said:4

I feel bound however to say that, although I am well aware of the existence of the boundary, I am never quite sure where to find it. Its position seems to vary from case to case. Indeed, if it were to be as firmly and clearly drawn as some of our mentors would wish, I cannot help feeling that a number of leading cases in your Lordships' House would never have been decided the way they were. For example, the minority view would have prevailed in Donoghue v Stevenson[1932] AC 562; our modern law of judicial review would have never developed from its old, ineffectual, origins; and Mareva injunctions would never have seen the light of day. Much seems to depend upon the circumstances of the particular case.

3 Lord Goff recognised the force of the objection and, in particular, the argument that some limits (in addition to the usual six-year time bar) had to be set to such claims and that the selection of such limits, being essentially a matter of policy, was one which the Legislature alone was equipped to make. In the end, he did not accept that it was persuasive enough to deter him from recognising, in law, the force of the justice underlying the claim. He gave a number of reasons. These included that the opportunity to change the law would never come again; however compelling the principle of justice might be, it would never be sufficient to persuade a government to propose its legislative recognition by Parliament; now was an almost ideal moment to recognise the principle because a Law Commission Consultation Paper was under active consideration; and there was an immediate opportunity for the authorities concerned to reformulate, in collaboration with the Law Commission, the appropriate limits of recovery on a coherent system of principles suitable for modern society.

4 For these and other reasons, Lord Goff was not prepared to leave it to Parliament to change the law. As he said, the boundary between the legitimate development of the law and legislation is difficult to find and much depends on all the circumstances of the particular case. “All the

circumstances of the particular case” is the traditional refuge of the judge who is unable to articulate a principle and wishes to retain maximum flexibility. It has its place in some contexts, but it is not a promising beginning to a lecture whose author is looking for clues as to where this boundary may be found. In the course of this lecture, I shall consider what principles (if any) can be stated as to where the boundary ought to be and see what we can glean from some of the cases.

5 On the whole, the judges seek to identify and distil from precedents the principles already inherent in the common law. As Parke J put it in Mirehouse v Rennell in 1833:5

Our common law system consists in the applying to new combinations of circumstances those rules of law which we derive from legal principles and judicial precedents; and for the sake of attaining uniformity, consistency, and certainty, we must apply those rules, where they are not plainly unreasonable and inconvenient, to all cases which arise; and we are not at liberty to reject them, and to abandon all analogy to them, in those to which they have not yet been judicially applied, because we think the rules are not as convenient and reasonable as we ourselves could have devised. It appears to me to be of great importance to keep this principle of decision steadily in view, not merely for the determination of the particular case, but for the interests of law as a science.

6 Even this early statement recognises that the common law does not require precedent to be followed where it is plainly unreasonable and inconvenient to do so. Most judges are supporters of the “never-say-never” school of thought. But some are bolder than others. My predecessor as Master of the Rolls, Lord Denning, is a well-known example of the latter kind of judge; one for whom precedents are no just impediment or rather no impediment to justice. As he put it, “If lawyers hold to their precedents too closely, forgetful of the fundamental principles of truth and justice … they may find the whole edifice comes tumbling down about them.”6 The difference between the two schools of thought, underpinned by that fact of human nature alone, explains why some are more likely to leave change to Parliament than others.

7 The Woolwich case illustrates this well. Lord Keith dissented, wagging his finger at his colleagues and saying that what was proposed amounted to “a very far reaching exercise of judicial legislation”7 and that the rule that money paid under a mistake of law was not recoverable was “too deeply embedded in English jurisprudence to be uprooted

judicially”.8 He made the particular point that “formulation of the precise grounds upon which overpayments of tax ought to be recoverable and of any exceptions to the right of recovery, may involve nice considerations of policy which are properly the province of Parliament and are not suitable for consideration by the courts”.9 Lord Jauncey agreed with him. Lord Goff was made of sterner stuff. Over the centuries, the law has developed incrementally in response to changing social and economic conditions and changing moral values. From time to time, the law has taken a big step forward. More usually, the steps are small and barely noticed, as precedent builds quietly on precedent. Woolwich is an example of a big step taken in the field of substantive law. The fact that the House was split 3:2 on the issue of whether it was proper for the courts to make the change suggests that this was a case near the boundary to which Lord Goff referred. And indeed it was. There were powerful arguments for saying that the proposed change should be left to Parliament. Of these the most important was that, as even Lord Goff recognised, there had to be limits to the right to recovery. He said that legislative bounds could be set to the common law principle and he plainly envisaged that they would be.

8 An important principle is that the common law should not be developed where the courts are not equipped to decide whether the development is in the interests of justice or to define the parameters of the development. I shall return to this later. But where the court feels that it is equipped to develop the law, sometimes radically, it can and, in my view, it should be willing to do so. As Lord Goff said, Donoghue v Stevenson10 is a good example of this.

9 Another good example is Hedley Byrne & Co Ltd v Heller & Partners Ltd.11 In that case, Lord Reid said that, apart altogether from authority, the law should treat negligent words differently from negligent acts. The law ought so far as possible to reflect the standards of the reasonable man and that is what Donoghue v Stevenson set out to do. Lord Reid then identified the relevant differences between acts and words and said that there was “good sense” behind the then existing law that in general an innocent but negligent misrepresentation gave no cause of action. Something more was required than mere misstatement. As is well known, building on what Lord Haldane said in earlier cases, he said that what was required was a relationship where it was plain that the person seeking information or advice was trusting the other to exercise such a degree of care as to the circumstances required and where the other knew

or ought to have known that the inquirer was relying on him. So here the law (the embodiment of the reasonable man) was being developed in these terms. This is a classic example of the law being developed incrementally. The courts were well-equipped to make such a...