The Jersey Law Review - February 2002

SHORTER ARTICLES AND NOTES

JUSTICE IN OUR TIME: THE PROBLEM OF LEGISLATIVE INACTION

Timothy Hanson

INTRODUCTION

On August 8th, 2001 Mark Boléat presented his Review of Consumer Protection in Jersey to the Industries Committee.  For me, this review and the debate surrounding the introduction of consumer legislation, raised fundamental concerns as to the workings of the Jersey legal system. Such concerns find partial expression in the sentiments of Hoffman JA in Re Barker^[1] where he stated -

            “…I am conscious of the pride which the legal profession in this Island takes in its unique legal system but such pride can only be justified if the legal institutions are sufficiently adaptable to enable the Court to do justice according to the notions of our own time.  The Court should not be left with the uneasy feeling that in following the old authorities, it might have perpetrated an injustice upon one of the litigants.”^[2]

In order for our courts to have the potential to achieve such justice, it is essential for the legislature to keep pace with the changing needs and expectations of Jersey people; it must facilitate not hinder the judicial process. To this end, it is important for the States of Jersey to have regard to developments in other countries, so that change can be more readily implemented here. As I shall endeavour to show, it is not always possible or permissible for the judges to recast the law to meet new times; that task rests primarily upon the States of Jersey. Unfortunately, the legislature has, all too frequently, failed to act so that the courts have found themselves either bound by “the old authorities” or forced to assume the rôle of legislators.

CONSUMER PROTECTION

Background

The lamentable lack of progress of consumer legislation in Jersey demonstrates such inaction. As long ago as August 28th, 1975 the Jersey Evening Post headlined plans for a new Trade Descriptions Law for Jersey. The new law was to be based upon the English Act of 1968 of the same name. The intention was to curb misleading statements as to the provision of goods and services by means of criminal sanctions. Even at that stage, the question was being raised as to “why Jersey was so far behind the UK, where the Act was already seven years old.”^[3] Anthony Tagg, whose research had prompted the draft law, stated that it had taken the UK many years of research before passing the 1968 Act and that delay in Jersey had at least allowed the loopholes in that Act to be revealed. Despite pressure from the Jersey Trades Council,^[4] the draft law was never implemented.

A review in 1992 by Guy Dehn of the UK National Consumer Council, identified further deficiencies in consumer protection. The forward to the review was provided by Lady Wilcox, Chairman of the National Consumer Council:

“What Jersey wants and needs is a law that ensures that consumers do not have to put up with business practices that were ruled out of court decades ago in the United Kingdom and Europe. The Islanders deserve – and its tourists expect – no less.”

As a result of this review, a Fair Trading Law was drafted. During 1997, drafts of a Supply of Goods, Services and Accommodation Law and a Business Malpractices Law were produced. Not one of these drafts, however, has matured into legislation.

Comparison with the UK

The current position is that Jersey’s consumer protection is “woefully inadequate” and “out-of-date”.^[5] In some areas, there is legislation but there are subtle differences between the consumer protection in Jersey when compared to the UK .  For instance, whilst there is some provision for ensuring the safety of goods under the Consumer Protection (Jersey) Law 1964, this law is limited to specified goods and does not extend to all goods as does its English counterpart.^[6]

In other areas, Jersey has fallen so far behind the legal position of other jurisdictions that whole swathes of consumer legislation simply do not apply in the Island. The following examples^[7] of English legislation with no Jersey counterpart, either in statute or common law form, illustrate this concern;

(i)         the Consumer Credit Act 1974 regulates the terms upon which consumers enter into credit agreements and prescribes the form that such agreements take. The Act seeks to lessen the pressure that is placed upon the consumer to enter into a credit agreement and increases the consumer’s rights of redress;^[8]

(ii) the Unfair Contract Terms Act 1977^[9](“UCTA”) controls the use of exclusion clauses whilst the Unfair Terms in Consumer Contract Regulations 1999^[10](“UTCC Regulations”)^[11] protects consumers by rendering unenforceable any unfair term contained in a pre-formulated standard form contract.

Mark Boleat^[12] and the Industries Committee^[13] both believe that Jersey’s links with the UK have helped to maintain comparable standards in the Island without legislation. They refer to traders in the Island (purporting) to operate to UK standards. This approach is, however, too simplistic. Even in the UK, companies that are household names, sometimes find themselves being prosecuted by the trading standards department of a local authority or are otherwise found not to have met the appropriate legal requirements in a consumer transaction. Furthermore, there is ample evidence of disreputable practices that have been perpetrated in the UK over many years. It is, for example, of concern that the Office of Fair Trading found in 1996 that:

“…the use of unfair terms in consumer contracts is widespread and amounts to a serious problem in the United Kingdom ”.^[14]

There is no reason to believe that Jersey has escaped such practices.^[15]  Indeed, the standard form agreements that are in current use by some Jersey finance companies contain a whole host of terms that would now be struck down in England and in other jurisdictions.

On a more general level, it is simply wrong for Jersey consumers to be lulled into a false sense of security that they have the same rights, and that the traders who operate in Jersey have the same duties, as their counterparts in the UK . The use of notices by some international companies in Jersey to the effect that their refund policies “do not affect [the consumer’s] statutory rights” reinforces the consumer’s misapprehension that s/he enjoys such rights.

Judicial warnings

Consumer legislation is clearly needed in Jersey across a broad range of issues. Without it, there are already signs of the potential injustice that may lie ahead. Lydan Developments Ltd. v Medens (Jersey ) Ltd.,^[16] for example, points to the problems that a Jersey court may face without legislation controlling the use of exclusion clauses.

In Lydan the plaintiff sought to set aside a contract for the lease of a vehicle from the defendant, complaining that the vehicle had such serious defects that it could not safely be driven on a road. The plaintiff argued that the defects amounted to a fundamental breach of contract, namely, that the defendant was under a duty to supply a roadworthy vehicle. The defendant relied upon a clause in the contract that, it argued, excluded liability for such defects. The Judicial Greffier held that the exclusion clause could not have been intended by the parties to exclude liability for such serious defects and accordingly entered judgement against the defendant.

The significance of this case lies in the dilemma that would have ensued had the Court found that the clause was intended to exclude liability for the defects in question. Hitherto, Jersey has followed English authority to the effect that a party could not exclude liability in respect of a fundamental breach of contract. In Photo Productions Ltd. v Securicor Transport Ltd.,^[17] the House of Lords ruled that the doctrine of fundamental breach was no longer good law and the matter was simply one of construction of the clause in question. Lord Wilberforce noted that the doctrine of fundamental breach had developed so as to deal with -

“…a large number of problems, productive of injustice, in which it was worse than unsatisfactory to leave exception clauses to operate…But since then Parliament has taken a hand: it has passed the Unfair Contract Terms Act 1977…”^[18]

The passage of UCTA in England clearly enabled the courts to recant the “dubious”^[19] doctrine of fundamental breach. Unfortunately, as has been indicated above, such legislation has not been implemented in Jersey . In Lydan, the Court did not need to decide whether or not the doctrine of fundamental breach still applied in Jersey . Nevertheless, the case raised the quandary as to whether or not it should still apply a doctrine now openly discredited in England . Moreover, if such a doctrine no longer applies, the Court has no safety net in the form of provisions, such as UCTA or the UTCC Regs, that would hold the balance between the parties. Accordingly, the case warns us of the prospect of a court being forced in future to uphold a clearly worded exclusion clause in circumstances leading to real injustice. Such a prospect is made all the more real given the existing line of Jersey authority that gives particular emphasis to the sanctity of contracts and which is summed up in the phrase “la convention fait la loi des parties”.^[20]

LEGISLATIVE INACTION GENERALLY

The failure of the States of Jersey to keep pace with the need for legislative change is, of course, not confined to specific areas such as consumer law but extends across a whole spectrum of issues.   In Attorney General v Maxwell^[21]the Royal Court recommended urgent reform of the criminal law in so far as it relates to vagrants -

“Society needs protection from those who engage in drunken and disorderly behaviour and those who commit breaches of the peace and acts of vandalism and dishonesty.  It does not need protection from those who quite simply have no money and no home.  On the contrary, a civilized society owes protection to such people, who are usually socially inadequate or mentally ill.  How and to what extent such protection should be given is not always easy but is in any event not a matter for us.  Our concern is whether in these times the criminal law has any proper function to perform in this area.  In our judgment it has none.  We express the hope that the legislature will give urgent attention to considering the desirability of abolishing the offence of being destitute and without home or habitation.”^[22]

Similar legislative inaction appears with regard to the action for breach of promise of marriage.  In England this was abolished in 1970.  In Anderson v Benjamin^[23], Ereaut, Bailiff queried whether this type of action ought to be retained.  In Sim v Thomas Carlisle, Commissioner described actions for breach of promise as -

“somewhat archaic and the relic of an earlier age.  But these matters of public policy remain in our opinion matters for the States to consider, and if they feel it desirable, to change, rather than the Court”.^[24]

Frequently, Jersey will adopt, either partially or entirely, English statutes.  What is surprising, however, is that when those English statutes are amended, our legislature fails to make corresponding amendments or even recognise the need to do so. Such inaction is highlighted by the case of Vezier v Bellego^[25] which involved the operation of the Fatal Accidents (Jersey ) Law 1962.

This Act was based upon an English statute passed in 1959.  Both enactments were passed so as to enable a dependant to bring proceedings to recover losses suffered as a result of the death of another. Damages are based upon the amount of pecuniary benefit which the dependant might reasonably have been expected to enjoy had the deceased person not been killed. However, in assessing damages under both enactments, the prospects of a spouse’s remarriage are to be taken into account and thereby go to reduce that spouse’s entitlement.  In England this provision was abolished by the Law Reform (Miscellaneous Provisions) Act 1971.  Inexplicably, Jersey failed to make such similar reforms.  In Vezier, Hamon, Deputy Bailiff could do no more than apply the 1962 Law -

            “The States of Jersey had the opportunity to change our statutory law when the English legislature changed a very harsh provision in 1976 (sic).  It chose not to do so.  Now, 20 years on, the very real injustice that the English judges had spoken of so forcefully and of which Jersey was forewarned has occurred.   I can not change the statute law of this Island because the English parliament has changed its statute law.  …Perhaps the policy of those who draft the law of this Island is in some matters “to wait and see.”  That is for this case and those involved in it a policy which can only cause distress.”^[26]

On April 11th, 1997 the Fatal Accidents (Amendment) (Jersey ) Law 1997 was registered.  The 1962 Law was amended so that the prospects of remarriage could not be taken into account when assessing damages. Unfortunately, this was all too late for Mrs.Vezier.

A further example can be seen in relation to copyright. In 1913, Jersey adopted the English Copyright Act 1911.  Since that time, the English Act has been repealed by the Copyright Act 1956 which was itself replaced by the Copyright Design and Patents Act 1988. As a result of  EC Directive 91/250/EEC, the Copyright (Computer Programs) Regulations 1992 were passed to update the 1988 Act.  Quite simply, our 1913 Law is now out of date.

JUDICIAL CREATIVITY: THE GOOD, THE BAD & THE UGLY

…the Good

Whilst the legislature has failed to act, the Courts have had to be resourceful. In grappling with the 1913 Law, for instance, the Court in Oliver v ABN-Ambro Bank N.V.^[27] afforded copyright protection to a computer program by holding that it constituted a “literary work” when clearly such technology could never have been envisaged eighty years previously. Given the obvious need to bring such legislation up to date, it is surprising that Jersey has fallen so far behind the times.^[28]

The Occupiers Liability Act 1957 is another example of an English statute that both Jersey and Guernsey have simply ignored or have not seen the need to implement.^[29]  The Act was passed in reaction to defects in the common law which drew a distinction between those who entered on to property as an invitee and those who were licensees. Essentially, the standard of care owed by the occupier of premises in the latter case was less than in the former situation. Jersey and Guernsey both followed the common law of England in this respect. In the Guernsey case of Morton v Paint^[30] Mrs. Morton entered into a block of flats to see her friend when she tripped and fell through a window on the common staircase. Merely as a licensee of the landlord, she faced the prospect of failing in her action in negligence against him.  Blom-Cooper JA, giving the judgment of the Guernsey Court of Appeal, stated -

            “It cannot be right that the law of negligence should remain stunted in its growth so long as the States of Guernsey fails to legislate.”

The Court of Appeal in that case developed the existing common law of Guernsey to a state comparable to that existing in England under the Occupiers’ Liability Act 1957. In so doing, the Court acknowledged that -

“Judges do and must legislate, but they can only do so interstitially”.^[31]

Unfortunately, such judicial ingenuity is not always possible. The cases of Vezier v Bellego and Sim v Thomas illustrate the extent to which the courts feel it appropriate to develop the common law.  Such sentiments were powerfully expressed by Lord Mackay of Clashfern in R v Howe^[32]who said at page 449 -

            “The common law must be developed to meet changing economic conditions and habits of thought, and I would not be deterred by expressions of opinion in this House in old cases.  But there are limits to what we can or should do.  If we are to extend the law it must lie by the development and application of fundamental principles.  We cannot introduce arbitrary conditions or limitations: that must be left to legislation.  And if we do in effect change the law, we ought in my opinion only to do that on occasions where our decision will produce some finality or certainty.”

Further, as Lord Scarman observed in Gillick v West Norfolk & Wisbech Area Health Authority^[33] -

            “The mark of the great judge from Coke through Mansfield to our day has been the capacity and the will to search out principle, to discard the detail appropriate (perhaps) to earlier times and to apply principle in such a way as to satisfy the need of his own times.”

…the Bad

Whilst Morton v Paint exemplifies the “judicial art” to good effect, differing approaches taken by the courts, particularly when dealing with contractual disputes, has generated considerable confusion and uncertainty in Jersey law.

In contract, the courts have tended to rely upon the civil law.  In cases involving defective goods or services, for example, the courts have applied the principle of vice caché or hidden defects.^[34] Whilst certain judges have relied upon and developed principles of customary law, others have been more prone to the absorption of English principles.  The case of United Dominion Corporation (Channel Islands ) Limited v Le Comte,^[35] for instance, adopts an entirely English approach to contractual analysis.  As a consequence, whilst the principle of vice caché hasbeen applied, there has also been a tendency to apply English principles to the same situation.

In England, there is a greater degree of uniformity in the approach taken to such disputes simply by virtue of the statutory régimes that are in place. The Sale of Goods Act 1979, for example, sets out the terms implied into any contract for the sale of goods and defines the rights and duties between seller and purchaser. The potential for differing judicial approaches is therefore limited by such legislation.

…and the Ugly.

The “battle” between the approaches taken by the Jersey Courts in contractual matters in general and the resulting confusion have been the subject of recent debate in the articles by Timothy Le Cocq and John Kelleher at [2000] 4 JL Review 151 and 266 respectively. These articles consider whether or not the Court was correct in the case of Hotel de France (Jersey ) Limited v Chartered Institute of Bankers^[36] to hold that a party must normally apply to the court to resolve or, in other words, to rescind a contract.  The more recent case of Rossborough (Insurance Brokers) Limited v Boon^[37] suggested that the Hotel de France case was wrong in that respect -

“it would mean that the innocent party would not know where he stood until a decision by the Court some months or even years later.  The Court should develop the law of contract in accordance with the requirements of a modern society insofar as it is open for it to do so.  The French approach would appear to leave all the parties in a state of complete uncertainty.”

It is, frankly, incredible that such confusion and uncertainty exists in the law of contract, particularly given the nature and extent of commercial activity that takes place in Jersey . Furthermore, it is part of the reason why many commercial contracts that are concluded in Jersey are drafted with clauses declaring that it is to be governed by English law.

CONCLUSION

The States of Jersey are in the process of grappling with wide ranging reform and I do not underestimate the task that lies ahead of it.  The Clothier Report and the Human Rights (Jersey ) Law 2000 will entail enormous change. Nevertheless, the point must surely have arrived for a new law to be passed setting out clearly the law of contract to be applied in Jersey .  Given the potential introduction of consumer legislation, this would appear to be a convenient framework within which to effect such further reform. No doubt such matters will be considered by the Jersey Law Commission which has already been appointed to examine this area of law.

However, of wider significance, is the failure of the States of Jersey to scrutinise and update the laws in any consistent manner. Those that are based upon the passing of a statute of another jurisdiction ought to be updated in accordance with reforms made to the parent statute.  Such reforms ought not only to alert the States of Jersey to the need for reform but, given the history of legislative inaction, there ought to be a presumption that corresponding reforms are required to the Jersey law.  If the resources are insufficient for Jersey to carry out its own research into legislative reform, Jersey must be more willing to harness itself to the labours of other jurisdictions and, most notably, those of England with whom Jersey enjoys such a close relationship. Until the States of Jersey can effect such change, there is the real risk of injustice being perpetrated upon litigants and consequential damage to the Island ’s reputation.

Timothy Hanson is a barrister-at-law and is employed as a legal assistant with Olsens of 47, Esplanade, St. Helier , Jersey , JE1 OBD

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