IN THE SUPREME COURT OF JUDICATURE	QBENI 97/1351 CMS1
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(HIS HONOUR JUDGE ROGER COX (sitting as a High Court Judge))
	Royal Courts of Justice
	Strand
	London W2A 2LL

	Friday, 24th April 1998

	B e f o r e
	THE VICE-CHANCELLOR
	(The Rt Hon Sir Richard Scott)
	The Rt Hon Lord Justice Auld
	TheRt Hon Lord Justice Schiemann
	          
BETWEEN: 
	JOHN TERENCE GEORGE HARRIS	Respondent

	and 

	(1) GLYNNE EVANS	
	(2) HEALTH AND SAFETY EXECUTIVE	Appellants

	(Transcript of the Handed-Down Judgment of
	Smith Bernal Reporting Limited, 180 Fleet Street
	London EC4A 2HD
	Tel: 0171 404 1424
	Official Shorthand Writers to the Court)

MR PHILIP ASTOR (instructed by the Treasury Solicitor, London SW1H 9JS) appeared on behalf of the Appellants/Defendants.

MR RICHARD STEAD (instructed by Messrs Crosse & Crosse, DX 8313 Exeter) appeared on behalf of the Respondent/Plaintiff.

	J U D G M E N T
	(As approved by the Court)

	Crown Copyright

VICE-CHANCELLOR:-

	The issue on this appeal is whether Mr Glynne Evans, an inspector of the Health and Safety Executive (the HSE), who in the course of his duties gave advice to certain local authorities about the safety of a mobile telescopic crane used by the Plaintiff for the purposes of his bungee jumping business, owed a duty of care to the Plaintiff as to the content of his advice.

	By a writ and Statement of Claim issued on 23 September 1996, the Plaintiff, Mr John Harris, claimed damages both from Mr Evans and from the HSE for alleged negligence on the part of Mr Evans in giving the advice to the local authorities.  There was also a claim for damages for misfeasance in public office, but nothing now turns on that.

	The story, as told by the Statement of Claim, is as follows:-

	In 1992 Mr Harris commenced the business of providing bungee jumping facilities to members of the public.  He did so by using a mobile telescopic crane.

	One of the functions of the Health and Safety Executive, established by the Health and Safety at Work Etc Act 1974 (`the 1974 Act’), is to provide an advisory service which can be consulted by entrepreneurs, such as Mr Harris, desirous of carrying on potentially hazardous or risky undertakings.  So, in October or November 1992, Mr Harris contacted an officer of the HSE, Miss Monica Finan, in order to ascertain the HSE’s safety requirements for bungee jumping from mobile telescopic cranes.  Mr Harris was told by Miss Finan that he would satisfy the HSE’s safety requirements if he complied with a Code of Practice published by the Standard Association of British Bungee (para. 3 of the Statement of Claim).  It is not alleged that this advice was incorrect or in any respect negligent.

	In December 1992 Mr Harris started to offer bungee jumping to the public at various sites in the south-west of England.  He has at all material times complied with the Code of Practice (para. 4 of the Statement of Claim).

	On 4 July 1993 Mr Evans carried out an inspection of Mr Harris’ mobile crane and equipment.  It was at a site in Newton Abbot, Devon.  Having done so, Mr Evans gave written advice to Teignbridge District Council.  He advised on a number of steps to be taken and advised, in particular, that the crane should not be used for bungee jumping until it had been certified fit for that special purpose and that the certification should be undertaken either by some competent person appointed by the National Certification System for Insurance Inspection Bodies (the `NCSIIB’) or by the manufacturer of the crane (para. 5 of the Statement of Claim).

	Acting on the advice given by Mr Evans, Teignbridge District Council, on or about 27 July 1993, served on Mr Harris two Improvement Notices.  The first Notice, after stating that Mr Harris was in breach of sections 2 and 3 of the 1974 Act in that he had not taken all reasonable steps to ensure that the mobile crane was safe for bungee jumping, required him to take certain specified remedial steps by 20 August 1993.  The steps included obtaining the certification that Mr Evans had advised should be obtained.  The second Notice added three further remedial steps to be taken (paras 6 and 7 of the Statement of Claim).

	Mr Harris complied with the Improvement Notices in all respects save in respect of the certification of the crane as fit for bungee jumping.  It is Mr Harris’ case that the certification requirement was impracticable, first, because it was not the practice of the NCSIIB to certify the suitability of plant or equipment for any particular use and, secondly, because the manufacturer of the crane  could not be expected to be willing to certify that the crane was fit for a novel use for which it had neither been designed nor constructed (para. 15(4) of the Statement of Claim).  As a consequence of Mr Harris’ failure, or perhaps inability, to comply with the certification requirement, Teignbridge District Council served on him a Prohibition Notice dated 22 August 1993.  The Prohibition Notice, after stating that Mr Harris was in breach of sections 2 and 3 of the 1974 Act and that the certification required by the first Improvement Notice had not been obtained, directed that his use of the crane for bungee jumping should cease until the certification had been obtained (para. 8 of the Statement of Claim).

	On or about 21 August 1993 Mr Evans gave advice to Torridge District Council in similar terms to the advice he had given to Teignbridge District Council.  In consequence Torridge District Council made it known to Mr Harris that he were to offer bungee jumping from his mobile crane in their area, they would serve a Prohibition Notice to prevent him from doing so (paras 9 and 10 of the Statement of Claim).

	On 26 August 1993, Mr Harris offered bungee jumping from his crane at a site at Ilfracombe, Devon.  The site is within the area of North Devon District Council.  On receiving advice that bungee jumping from the crane carried a serious risk of death or serious injury to users of the crane and also to on-lookers, North Devon District Council issued a Prohibition Notice against Mr Harris on 26 August 1993 (para. 11 of the Statement of Claim).  By whom the advice was given is not expressly pleaded.  The inference however, is that it was Mr Evans who gave the advice.

	Mr Harris appealed to the Industrial Tribunal against the Improvement Notices and the Prohibition Notice served by Teignbridge District Council.  The appeals were heard in Exeter on 18 August and 10 September 1993.  The appeals were dismissed on 1 October 1993 (para. 12 of the Statement of Claim).   There seems to have been no appeal against the Prohibition Notice served by North Devon District Council.

	On or about 30 November 1993 North Devon District Council withdrew its Prohibition Notice.  On or about the same date Torridge District Council lifted the ban which it had imposed.  And on 14 February 1994 Teignbridge District Council withdrew its Prohibition Notice (para. 13 of the Statement of Claim).  These events, according to the pleading, were the result of the intervention of the Secretary of State for Employment who, in a letter dated 26 November 1993, to Mr Patrick Nicholls MP had said:-

	“Currently there is no technical evidence available to show that there is an unacceptable level of risk from using mobile cranes for bungee jumping.  It follows that the HSE does not have a policy of prohibiting the use of cranes for bungee jumping ... A Prohibition Notice was issued on the basis of advice given by an HSE Specialist Inspector of Teignbridge District Council, the enforcing authority in this case, by an HSE Specialist Inspection.  He offered advice which was not in line with the HSE policy stated above”.

	The HSE Specialist Inspector was Mr Evans.

	The legal basis of Mr Harris’ case is pleaded in paragraphs 14 and 15 of the Statement of Claim.  I should set them out in full, as amended:-

	“14.	The First and/or Second Defendants owed to the Plaintiff a duty of care to ensure that the Plaintiff would not be exposed to economic loss by reason of the negligent exercise of the Second Defendant’s powers under the Health and Safety at Work Act 1974 and/or negligent advice given by the First and/or Second Defendant to District Councils in connection with the operation of the Plaintiff’s said bungee jumping business.  It is averred that there was a proximity in the relationship between the Plaintiff and the Second Defendant, and the First Defendant as servant or agent of the Second Defendant, by virtue of the said advice given by Monica Finan, on behalf of the Second Defendant, to the Plaintiff, and/or by virtue of the fact that the imposition of an Improvement or Prohibition Notice would adversely affect the Plaintiff and cause economic loss to the Plaintiff.  In advising the Plaintiff as aforesaid and/or in advising the said District Councils concerning the Plaintiff’s bungee jumping business the Second Defendant, and the First Defendant as servant or agent of the Second Defendant, assumed a responsibility to the Plaintiff.

	NEGLIGENCE

	15.	The first Defendant, for whom the Second Defendant is vicariously liable, was negligent in advising Teignbridge, North Devon and Torridge District Councils as aforesaid and/or the First and/or Second Defendants exercised the statutory discretion and/or the implementation of that discretion under the Health and Safety at Work Act 1974 unreasonably, so that the said advice of the First and/or Second Defendant was outside the ambit of the said discretion in all or some of the following respects.

PARTICULARS

	(1)	failed to make any or any adequate inquiries of Monica Finan and/or other employees of the Second Defendant to ascertain the policy of the Second Defendant concerning the use of mobile cranes for bungee jumping.  It is averred that the Plaintiff informed the First Defendant on the 4th of July 1993 and again on the 26th of July 1993 and again on the 21st of August 1993 that he should consult Monica Finan of the Second Defendant at the Preston office;

	(2)	advised the said District Councils as aforesaid in spite of the then policy of the Second Defendant that the use of mobile cranes was not prohibited for bungee jumping and that there was no requirement for the testing or certification of cranes for such use;

	(3)	failed to have any or any adequate regard to the fact that the Plaintiff had complied with the code of Practice as recommended by Monica Finan acting for or on behalf of the Second Defendant;

	(4)	required that the Plaintiff should provide certification from a competent person appointed under the NCSIIB when he knew or ought to have known that such a competent person would not so certify the crane, the NCSIIB being solely concerned with in-service inspections of plant and equipment and not with certifying the suitability of any plant or equipment for any given application;

	(5)	required that the Plaintiff should provide certification from the crane maker when he knew or ought to have known that the crane maker would be unlikely to provide such certification the crane not having been designed or constructed with bungee jumping being foreseen as a use for the crane;

	(6)	failed to apply the then current policy of the Second Defendant in respect of bungee jumping from mobile telescopic cranes when he knew or ought to have known that he was acting contrary to the said policy, and that by advising the said District Councils as aforesaid contrary to the second Defendant’s policy he would cause economic loss to the Plaintiff;

	(6A)	failed and/or advised as aforesaid and/or caused the Prohibition and/or Improvement Notices to be served, when at all material times the said crane was so far as was reasonably practicable, and in any event, safe so that no person was exposed to a risk to health and safety as a result of the use of the said crane for bungee jumping.

	(7)	caused the said Prohibition and Improvement Notices to be served as aforesaid”.

	Paragraph 16 of the Statement of Claim pleaded the misfeasance in public office claim.  That claim has now gone.  Paragraph 17 described the damage that Mr Harris seeks to recover.  It includes loss of income as a result of being unable to operate in the areas of the respective District Councils and also legal fees and experts fees incurred in unsuccessfully appealing against the Notices issued by Teignbridge District Council.

	The Defendants to the action, Mr Evans and the HSE, applied to have the Statement of Claim struck out as disclosing no cause of action.  On 12 May 1997 Master Trench acceded to the application, struck out the Statement of Claim and dismissed the action.  The Plaintiff appealed.  The appeal came before His Honour Judge Roger Cox, sitting as a judge of the High Court, on 31 July 1997.  He allowed the appeal so far as the claim in negligence was concerned but upheld Master Trench so far as the misfeasance in public office claim was concerned.  He refused the Defendants’ application for leave to appeal.

	Leave to appeal was granted to the Defendants by Hirst L.J. on 2 October 1997.  No application for leave to appeal was made by the Plaintiff.  So the misfeasance in public office claim is dead  and the issue for us to decide is whether the Plaintiff has an arguable case in negligence.

	Mr Carlisle Q.C., for the appellant Defendants, advanced two grounds for the striking out of the negligence claim.  First, he submitted that, given the statutory backcloth to the advice given by Mr Evans on which the negligence claim is based, the Defendants did not owe the Plaintiff a common law duty of care to avoid economic loss to his business.  Second, he submitted that Mr Evans, in giving his advice to the Councils, was entitled to the immunity from suit accorded to witnesses in legal proceedings.  A third ground, raised in the course of the hearing, is that the negligence action represents an impermissible attempt by the Plaintiff to re-litigate the issues which were decided against him by the industrial tribunal.

	Both the first two grounds depend upon and require a careful examination of the structure and purpose of the statutory provisions in the 1974 Act and of Mr Evans’ role in giving to the Councils the advice complained of.  As to the first ground, it is trite law that both the existence and the extent of a duty of care owed by A to B  depend upon the particular circumstances of the case.  Hedley Byrne -v- Heller [1964] A.C. 465 established that an action in negligence can be brought to recover economic loss caused by a negligent misstatement.  It did not and could not establish that an individual whose negligent misstatement has caused economic loss to another will necessarily be liable for the loss.   White -v- Jones [1995] 2AC 207 established that a negligent discharge by a solicitor of his duty to his client that causes economic loss to a third party is capable of constituting a breach of a tortious duty of care owed by the solicitor to the third party.  The case did not and could not establish that when a solicitor is discharging his duty to his client he owes a duty of care to anyone whose economic interests may be affected by what he is doing.  Whether  there is liability will depend in every case upon whether in the particular circumstances of the case the negligent misstatement or negligent conduct was in breach of a duty of care owed to the person who has suffered the economic loss.  The question in the present case is whether Mr Evans’ advice to the Councils, assumed to be incorrect and to have been negligently given, was a breach of a duty of care owed by Mr Evans to the Plaintiff, Mr Harris.  The circumstances of the case, on which will depend the answer to the question, include, in particular, that Mr Evans was giving the advice as an HSE inspector and that the consequences of the advice which caused the damage to the Plaintiff’s business were decisions taken and powers exercised by the Councils pursuant to their duties and powers under the 1974 Act.

	Section 1(1) of the 1974 Act expressly states the purpose of the Act:-

	“(1)	The provisions of this Part shall have effect with a view to -

	(a)	securing the health, safety and welfare of persons at work;

	(b)	protecting persons other than persons at work against risks to health or safety arising out of or in connection with the activities of persons at work;

	(c)	controlling the keeping and use of explosive or highly flammable or otherwise dangerous substances, and generally preventing the unlawful acquisition, possession and use of such substances”.

	Section 2 prescribes duties owed by employers to their employees.

	“2(1)		It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees”.

	Subsection (2) specifies specific duties.  Among these is:
	“(a)	the provision and maintenance of plant and systems of work that are, so far as is reasonably practicable, safe and without risks to health”.

Section 3 prescribes duties owed to other persons, e.g., bystanders or passers by, or, in the case of sporting activities, participants.

	“3(1)	It shall be the duty of every employer to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that persons not in his employment who may be affected thereby are not thereby exposed to risks to their health or safety.

	(2)	It shall be the duty of every self-employed person to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that he and other persons (not being his employees) who may be affected thereby are not thereby exposed to risks to their health or safety”.

	The effect of sections 2 and 3, for present purposes, is that Mr Harris in operating his bungee business was under a statutory duty, both to his employees working on or near to the mobile crane and to members of the public taking part in or watching the bungee jumping, to ensure so far as practicable that they were not exposed to risks to their safety.

	Section 10 of the Act established two statutory corporations, the Health and Safety Commission and the HSE.  Section 11 set out in general terms their functions.

	Section 11(1) provided that “.... it shall be the general duty of the Commission to do such things and make such arrangements as it considers appropriate for the general purposes of this Part [of the Act]” and section 11(2) provided:-

	“(2)	It shall be the duty of the Commission ... -

	(a)	to assist and encourage persons concerned with matters relevant to any of the general purposes of this Part to further those purposes;

	(b)	to make such arrangements as it considers appropriate for the carrying out of research, the publication of the results of research and the provision of training and information in connection with those purposes, and to encourage research and the provision of training and information in that connection by others;

	(c)	to make such arrangements as it considers appropriate for securing that government departments, employers, employees, organisations representing employers and employees respectively, and other persons concerned with matters relevant to any of those purposes are provided with an information and advisory service and are kept informed of, and adequately advised on, such matters”.

	Under section 11(4) it is the duty of the HSE “to exercise on behalf of the Commission such of the Commissions’ functions as the Commission directs it to exercise ...”.

	It is common ground that, pursuant to section 11(2) and (4), the HSE’s officers provide information and advice about health and safety at work matters.  This is the function that Miss Finan was discharging when responding to Mr Harris’ request for advice as pleaded in paragraph 2 of the Statement Claim.  It is the function which Mr Evans was endeavouring to discharge when  advising the local authorities as pleaded in paragraphs 8 to 11 of the Statement of Claim.

	Section 12 of the 1974 Act empowers the Secretary of State to give directions to the Commission with respect to its functions and section 13(1) sets out, in seven sub-paragraphs, additional  powers exercisable by the Commission.  Of these, sub-paragraph (c) authorises the Commission “to provide (with or without payment) services or facilities required otherwise than for the general purposes of this Part in so far as they are required by any Government Department or other public authority in connection with the exercise by that department or authority of any of its functions”.

	It is possible to regard section 13(1)(c) as conferring the power under which Mr Evans was purporting to act when advising the Councils.

	Section 18 of the 1974 Act deals with enforcement.  Under sub-section (1) the HSE is made primarily responsible for enforcement of the relevant statutory provisions but sub-section (2) empowers the Secretary of State by regulations to make local authorities responsible for enforcement in their respective areas.  Sub-section (4) provides as follows.

	“(4)	It shall be the duty of every local authority -

	(a)	to make adequate arrangements for the enforcement within their area of the relevant statutory provisions to the extent that they are by any of those provisions or by regulations under subsection (2) above made responsible for their enforcement; and

	(b)	to perform the duty imposed on them by the preceding paragraph and any other functions conferred on them by any of the relevant statutory provisions in accordance with such guidance as the Commission may give them”.

	We have not been referred to the regulations made by the Secretary of State  under sub-section (2) but it is common ground that the three Councils referred to in the Statement of Claim had been duly constituted enforcing authorities in their respective areas (see sub-section (7)).

	Sections 19 and 20 of the 1974 Act deal with the appointment and powers of inspectors.  Every “enforcing authority” can appoint inspectors and specify the powers exercisable by the appointed inspectors.  Under section 20(2) the powers that can be conferred on inspectors include the specific powers set out in sub-paragraphs (a) to (l) and also “(m) any other power which is necessary for the purpose [of carrying into effect any of the relevant statutory provisions within the field of responsibility of the enforcing authority which appointed him]”.  The breadth of the powers that can be conferred on inspectors is remarkable.

	Section 21 deals with Improvement Notices; section 22 with Prohibition Notices.

	“21	If an inspector is of the opinion that a person -

		(a)	is contravening one or more of the relevant statutory provisions; or

		(b)	has contravened one or more of those provisions in circumstances that make it likely that the contravention will continue or be repeated,

	he may serve on him a notice (in this Part referred to as `an improvement notice’) stating that he is of that opinion, specifying the provision or provisions as to which he is of that opinion, giving particulars of the reasons why he is of that opinion, and requiring that person to remedy the contravention or, as the case may be, the matters occasioning it within such period (ending not earlier than the period within which an appeal against the notice can be brought under section 24) as may be specified in the notice.

	22(1)	This section applies to any activities which are being or are likely to be carried on by or under the control of any person, being activities to or in relation to which any of the relevant statutory provisions apply or will, if the activities are so carried on, apply.

	(2)	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”).

	(3)	A prohibition notice shall -

		(a)	state that the inspector is of the said opinion;

		(b)	specify the matters which in his opinion give or, as the case may be, will give rise to the said risk;

		(c)	where in his opinion any of those matters involves or, as the case may be, will involve a contravention of any of the relevant statutory provisions, state that he is of that opinion, specify the provision or provisions as to which he is of that opinion, and give particulars of the reasons why he is of that opinion; and

		(d)	direct that the activities to which the notice relates shall not be carried on by or under the control of the person on whom the notice is served unless the matters specified in the notice in pursuance of paragraph (b) above and any associated contraventions of provisions so specified in pursuance of paragraph (c) above have been remedied.

	(4)	A direction in a prohibition notice in pursuance of subsection (3)(d) above shall take effect -

		(a)	at the end of the period specified in the notice; or

		(b)	if the notice so declares, immediately”.

	Section 24 provides for appeals against Improvement Notices and Prohibition Notices to be brought before an industrial tribunal.  Sub-section (3) provides:-

	“(3)	Where an appeal under this section is brought against a notice within the period allowed under the preceding subsection, then -

		(a)	in the case of an improvement notice, the bringing of the appeal shall have the effect of suspending the operation of the notice until the appeal is finally disposed of or, if the appeal is withdrawn, until the withdrawal of the appeal;

		(b)	in the case of a prohibition notice, the bringing of the appeal shall have the like effect if, but only if, on the application of the appellant the tribunal so directs (and then only from the giving of the direction)”.

	It is of some importance that an appeal against an improvement notice automatically suspends the operation of the notice whereas an appeal against a prohibition notice only does if, on an application by the appellant, the industrial tribunal so directs.  In the present case it would have been open to Mr Harris to have applied for a suspension of the Prohibition Notice issued by Teignbridge District Council.  It seems he did not so apply.

	Section 33(1) creates a number of criminal offences.  It is sufficient, I think, for present purposes if I refer to only two of them.  It is an offence for a person:-

	“(a)	to fail to discharge a duty to which he is subject by virtue of sections 2 to 7;

	...

	(g)	to contravene any requirement or prohibition imposed by an improvement notice or prohibition notice ...”.

	A person guilty of an offence under section 33(1)(a) is liable to a fine (s.33(1A)).  A person guilty of an offence under section 33(1)(g) is liable to a fine or imprisonment (section 33(2A)).  There are exceptions which I need not take time to describe.

	Section 38 requires proceedings for an offence to be instituted either by an inspector or by or with the consent of the Director of Public Prosecutions.

	There is one other section to which I should refer because it might seem at first sight to be relevant to the question at issue in this case.

	Section 26 provides as follows:-

	“Where an action has been brought against an inspector in respect of an act done in the execution or purported execution of any of the relevant statutory provisions and the circumstances are such that he is not legally entitled to require the enforcing authority which appointed him to indemnify him, that authority may, nevertheless, indemnify him against the whole or part of any damages and costs or expenses which he may have been ordered to pay or may have incurred, if the authority is satisfied that he honestly believed that the act complained of was within his powers and that his duty as an inspector required or entitled him to do it”.

	Mr Jackson QC has relied on this section, as also did the judge below, as an indication that a negligence action can be brought against an inspector “in respect of an act done in the execution or purported execution of any of the relevant statutory provisions ...”.  In my judgment, the section is wholly neutral on this issue.  There are a number of different types of actions which might be brought against inspectors in respect of acts done by them in the exercise or purported exercise of their statutory functions or powers.  Actions based on allegedly malicious acts intended to damage the owner of the business rather than to protect the public from exposure to risks caused by the business would be an example.  It is possible that circumstances might arise in which actions of trespass or for breach of copyright or tortious interference with contract could be brought.  No doubt other examples can be brought to mind.  The language of section 26, however, neither demonstrates nor supports the viability of any particular cause of action against an inspector.  I accept and agree with Mr Carlisle’s submission that the section  was simply intended to make clear the propriety, from a vires viewpoint, of an enforcing authority indemnifying its inspector against liabilities incurred in defending an action brought against him in respect of an act done in the exercise or purported exercise of his statutory function or powers.

	The important features of the statutory scheme for present purposes seem to me to be the following:-

	(i)	The purpose of the 1974 Act is to protect the safety of members of the public, whether employees or others.

	(ii)	The statutory duties imposed on employers and on entrepreneurs, such as Mr Harris, whose businesses involve participation by members of the public are imposed for that purpose.

	(iii)	The very extensive powers that are available to inspectors are made available to them for that same purpose.  Whether in giving advice to local authorities about safety requirements in relation to particular activities, or in deciding whether to issue an Improvement Notice and, if so what improvements to require to be carried out, or in deciding whether to issue a Prohibition Notice, inspectors are exercising discretionary powers given to them for the purpose of protecting the safety of members of the public.

	In considering the question whether an entrepreneur, such as Mr Harris, is conducting his business “in such a way as to ensure, so far as is reasonably practicable, that persons ... who may be affected thereby are not thereby exposed to risks to their health or safety”  (see section 3(1)) and in deciding what (if any) improvements the entrepreneur should be required to carry out, the inspector must strike a balance.  Absolute safety, where sporting activities involving some risk are concerned, will be unattainable.  Formula One racing is a good example.  National Hunt racing is another.  There will always be risks to the participants, and lesser ones to the onlookers.  The inspector has to take a view as to what would be reasonably practicable.  If he considers that there are reasonably practicable steps that can be taken to reduce the risks of the activity in question, it must follow that he considers the entrepreneur to be for the time being in breach of the statutory duties imposed by sections 2 and 3.  In such a case the inspector has a choice to make as to the power he should exercise.  He can institute a prosecution for a section 33(1)(a) offence.  He can serve an Improvement Notice under section 21 specifying the steps that he thinks should be taken to reduce the risks.  He can serve a Prohibition Notice under section 22, if he thinks that the activity in question involves a risk of serious personal injury.  Or, as in the present case, he can give advice to some other enforcing authority, leaving it to that authority to make the decision as to what enforcement steps should be taken.

	In R -v- Board of Trustees of the Science Museum [1993] ICR 876, Steyn L.J. referred to the Report of the Committee 1970-1972 on Safety and Health at Work (1972) (Cmnd. 5034), which led to the 1974 Act, and continued as follows:-

	“It was a central thesis of the report that the development control powers of local authorities were insufficient to protect members of the public.  The report recommended specific statutory controls exercised directly in the interests of public safety.  This approach explains the battery of powers in the Act of 1974 ....  These far reaching statutory powers are linked with section 3(1).  It is therefore, clear that the broad purpose of this part of the legislation was preventive” (pp 881/2).

	I respectfully agree with the emphasis placed by Steyn L.J. on the preventive purpose of the legislation.  The purpose was to enable inspectors to require steps to be taken to reduce risks and thereby to avoid accidents.

	I return to the question whether an inspector, when deciding what, if any, exercise of his powers he should make in respect of a particular business activity, owes a duty of care to the proprietor of that business.

	We have been referred to a good deal of authority as to the approach we should adopt in answering this question.  The leading authority is X (Minors) -v- Bedfordshire County Council [1995] 2AC 633.  The case was one in which children, who alleged that they had suffered parental abuse and neglect, sued the Council for its negligence in failing to protect them by instituting care proceedings under the Children Act 1989 and its statutory predecessors.  The claims had been struck out as disclosing no cause of action.  The children had appealed.  The leading judgment in the House of Lords was given by Lord Browne-Wilkinson.  At p.739 he said this:-

	“If the plaintiff’s complaint alleges carelessness, not in the taking of a discretionary decision to do some act, but in the practical manner in which that act has been performed (e.g. the running of a school) the question whether or not there is a common law duty of care falls to be decided by applying the usual principles i.e., those laid down in Caparo Industries Plc -v- Dickman [1990] 2 A.C. 605, 617-618.  Was the damage to the plaintiff reasonably foreseeable?  Was the relationship between the plaintiff and the defendant sufficiently proximate?  Is it just and reasonable to impose a duty of care?  See Rowling -v- Takaro Properties Ltd. [1988] A.C. 473; Hill 
	-v- Chief Constable of West Yorkshire [1989] A.C. 53.

	However the question whether there is such a common law duty and if so its ambit, must be profoundly influenced by the statutory framework within which the acts complained of were done.  The position is directly analogous to that in which a tortious duty of care owed by A to C can arise out of the performance by A of a contract between A and B.  In Henderson -v- Merrett Syndicates Ltd. [1995] 2 A.C. 145 your Lordships held that A (the managing agent) who had contracted with B (the members’ agent) to render certain services for C (the Names) came under a duty of care to C in the performance of those services.  It is clear that any tortious duty of care owed to C in those circumstances could not be inconsistent with the duty owed in contract by A to B.  Similarly, in my judgment a common law duty of care cannot be imposed on a statutory duty if the observance of such common law duty of care would be inconsistent with, or have a tendency to discourage, the due performance by the local authority of its statutory duties”.

	Later in his judgment, at pages 749 to 751, Lord Browne-Wilkinson addressed himself to the question whether it was “just and reasonable to superimpose a common law duty of care on the local authority in relation to the performance of its statutory duties to protect children”.  He held that it was not for a number of reasons, several of which bear upon the present case.

	First, he held that a common law duty of care would cut across the whole statutory system set up for the protection of children at risk.  Similarly, the 1974 Act and the regulations made thereunder have set up a statutory system for the reduction of risks to health and safety caused by dangerous business activities.  The system includes provision for appeals against acts taken by enforcing authorities in exercise, or purported exercise, of their statutory powers.  If an appeal against an Improvement Notice or a Prohibition Notice succeeds, the error on the part of the enforcing authority is corrected.  If an appeal fails, how can it then be open to the aggrieved entrepreneur to recover via a negligence action the damage caused to his business by the Notice that has been upheld by the industrial tribunal?

	Another reason given by Lord Browne-Wilkinson was that if a liability in damages were to be imposed, it might well be that local authorities would adopt a more cautious and defensive approach to their duties.  He commented:-

	“If the authority is to be made liable in damages for a negligent decision to remove a child (such negligence lying in the failure properly first to investigate the allegations) there would be a substantial temptation to postpone making such a decision until further inquiries have been made in the line of getting more concrete facts”.

	This point is one which, in my view, has strong implications in the present case.  The duty of enforcing authorities, whether inspectors or local authorities, is to have regard to the health and safety of members of the public.  If steps which they think should be taken to improve safety would have an adverse economic effect on the business enterprise in question, so be it.  A tortious duty which rendered them potentially liable for economic damage to the business enterprise caused by the steps they were recommending to be taken would, in my judgment, be very likely to engender untoward cautiousness and the temptation to which Lord Browne-Wilkinson referred.

	Lord Browne-Wilkinson referred specifically to the statutory complaints procedures contained in the Child Care Act 1980 and the Children Act 1989 which provided a means to have grievances investigated.  The situation was not one in which no remedy for maladministration bar an action in tort was available.  The same is true so far as actions by enforcing authorities under the 1974 Act are concerned.  Not only can an Improvement Notice or a Prohibition Notice be challenged by an appeal to an industrial tribunal but the statutory system makes provision for the suspension in the meantime of the Notice in question or, in the case of a Prohibition Notice, an application for its suspension to be made.

	Finally, Lord Browne-Wilkinson referred to the House of Lords decision in the Caparo Case [1990] 2 AC 605 which “lays down that, in deciding whether to develop novel categories of negligence the court should proceed incrementally and by analogy with decided categories”.  He concluded:-

	“In my judgment, the courts should proceed with great care before holding liable in negligence those who have been charged by Parliament with the task of protecting society from the wrongdoings of others”.

	The guidance as to approach to be found in X (Minors) -v- Bedfordshire County Council suggests, in my judgment, that the negligence action brought by the Plaintiff in the present case ought not to be permitted.

	Mr Jackson has sought to resist that conclusion in two ways.  First he has drawn our attention to the cases in which a plaintiff has succeeded in recovering by means of a negligence action economic loss caused by a negligent statement made by the defendant to a third party and acted on by the third party.  In Spring -v- Guardian Assurance [1995] 2 AC 296 the defendant, who had given a negligent reference about the plaintiff to a prospective employer, was held to have owed a duty of care to the plaintiff in respect of the reference.  In White -v- Jones [1995] 2 AC 207, a solicitor who was negligent in acting on a client’s testamentary instructions was held liable to the disappointed intended beneficiaries. Mr Jackson submitted that the allegedly negligent advice given by Mr Evans to the local authorities and on which the local authorities acted was similarly capable of founding an action in negligence by an individual who suffered economic loss as a result of the local authorities’ acts.  However, Mr Jackson’s reliance on these authorities ignores the statutory framework within which Mr Evans advised and the local authorities acted.  It is, in my opinion, a matter of irrelevance that the Improvement Notices and the Prohibition Notices served on the plaintiff were issued by the District Councils rather than by Mr Evans himself.  He had power under the  1974 Act to have issued them himself.  His, and the HSE’s, liability in negligence for the economic consequences of the issue of the Notices cannot, in my judgment, depend on whether the Councils issued the Notices on his advice or he issued them himself.  Similarly, liability in negligence cannot depend on whether the threat to issue a Prohibition Notice was made by Torridge District Council on Mr Evans’ advice or by Mr Evans himself.  In each case Mr Evans gave his advice as an inspector, indeed a specialist inspector (see the letter of 26 November 1993 from the Secretary of State to Mr Patrick Nicholls MP), and the question of what, if any, tortious duty of care he owed when giving his advice cannot sensibly be considered otherwise than in the context of an inspector’s functions and powers under the 1974 Act.

	Mr Jackson’s alternative submission was that a regulatory official, such as Mr Evans, when discharging his statutory functions and powers, does owe a tortious duty of care to the owners of the business enterprises affected by his decisions.  He cited in support Welton -v- North Cornwall D.C. [1997] 1 WLR 570, a decision of the Court of Appeal.  The case involved advice given by an environmental health officer under the Food Act 1984 and the Food Safety Act 1990.  The plaintiffs owned a guest house which constituted “food premises” for the purpose of the Acts.  The officer visited the premises and told the plaintiffs to execute substantial building works in order to comply with regulations made under the Acts.  The plaintiffs did so but subsequently discovered that the officer’s requirements had been vastly in excess of what was required by the regulations.  The plaintiffs brought a negligence action to recover their unnecessary expenditure.  The trial judge found in their favour.  The Court of Appeal dismissed their appeal.  The basis of Rose L.J.’s judgment was that the officer, in advising the plaintiffs as to the works they had to carry out, was assuming a responsibility to them.  He referred to Henderson -v- Merrett Syndicates Ltd [1995] 2 AC 145 in which “Lord Goff went on to re-assert the helpfulness of the concept of `assumption of responsibility’”.  Rose L.J. continued:-

	“In the light of this analysis, leaving aside for the moment the existence of the defendant’s statutory powers and duties, which provided the backcloth and reason for the relationship between Mr Evans and the plaintiffs, it seems to me that the judge’s conclusion that the relationship gave rise to a duty of care within the ambit of the Hedley Byrne principle is unassailable.  His unchallenged findings of fact included reliance by the plaintiffs on Mr Evans and knowledge of such reliance on Mr Evans’ part.  Accordingly there was, within Hedley Byrne as subsequently analysed, an assumption of responsibility for Mr Evans and hence a duty of care owed by him”.  (p.580).

	Rose L.J. then went on to consider “the impact of statutory duty on the relationship in the present case” and said this:-

	“... it seems to me that there are at least three categories of conduct to which the existence of the defendants’ statutory enforcement duties might have given rise.  First, there might be conduct specifically directed to statutory enforcement, such as the institution of proceedings before the justices, the service of an improvement notice and the obtaining of a closure order, in an emergency or otherwise.  Such conduct, even if careless, would only give rise to common law liability if the circumstances were such as to raise a duty of care at common law (see per Lord Browne-Wilkinson in X (Minors) -v- Bedfordshire County Council [1995] 2 A.C. 633, 735); and such a duty is not raised if it is inconsistent with, or has a tendency to discourage due performance of, the statutory duty:  see per Lord Browne-Wilkinson in X (Minors) -v- Bedfordshire County Council, at p. 739.  Secondly, there is the offering of an advisory service:  in so far as this is merely part and parcel of the defendants’ system for discharging its statutory duties, liability will be excluded so as not to impede the due performance of those duties:  see Lord Browne-Wilkinson in X (Minors) -v- Bedfordshire County Council, at p. 763.  But in so far as it goes beyond this, the advisory service is capable of giving rise to a duty of care; and the fact that the service is offered by reason of the statutory duty is immaterial:  see per Lord Browne-Wilkinson, at p.763.  Thirdly, there is the conduct which is at the heart of this case, namely the imposition by Mr Evans, outwith the legislation, of detailed requirements enforced by threat of closure and close supervision”.

	Ward L.J., in his judgment, emphasised the “public interest in not imposing a common law duty of care if it would render the correct operation of the statutory duty disproportionately onerous by, for example, deterring inspections and recommendations for fear of having to defend and meet claims for negligence which further deplete previous human and financial resources”.  But he made the point that “Looking at the matter from the point of view of the plaintiffs, they had no other remedy than this action” and agreed that a duty of care lay.

	It does not seem to me that Rose L.J.’s judgment provides much comfort to the Plaintiff in the present case.  It may be that his reasoning would lead to the conclusion that Miss Finan, in advising in October or November 1992, owed a duty of care to the Plaintiff.  But, since it is not alleged that her advice was in any respect negligent, that is immaterial.  What seems to me to be more important is that Rose L.J.’s remarks about the “impact of statutory duty” indicate that if the officer had served an Improvement Notice on the plaintiffs requiring them to carry out the excessive works, or had given advice to some other enforcing authority who had then served the Improvement Notice, the question whether a duty of care was owed would have depended upon whether the imposition of the duty of care would have tended to discourage the performance of the statutory duty.  I respectfully agree that that question would have so depended.  But that question, critical in the present case, was not answered in Welton -v- North Cornwall D.C.

	There are, in any event, two notable differences between the facts of the Welton case and the facts of the present case.  First, in Welton the negligent advice was given to and acted on by the plaintiffs.  In the present case the advice was given to and acted on not by the Plaintiff but by the local authorities in purported exercise of their statutory functions.  Second, the actions of the local authorities which caused the economic damage sought to be recovered  could in the present case have been challenged under the statutory procedures provided for in the Act.  In Welton, nothing had been done by the officer that could be challenged under the comparable statutory procedures.  So Welton is, in my judgment, distinguishable.  And it leaves expressly open the question whether, if the officer instead of giving advice to the plaintiffs, had served an Improvement Notice which they had complied with, they could have maintained their negligence action.

	I must confess, however, that I find some difficulty with the decision.  I do not understand how it was possible to come to the conclusion that the plaintiffs’ claim based on the principles in the Hedley Byrne case was “incontrovertible” (see Judge L.J. at p. 586) without considering whether the duty of care contended for was consistent with the statutory framework of the two Acts.  The only reason, I would imagine, why the plaintiffs had followed the officer’s recommendations was because he was an environmental health officer under the Acts and, as such, in a position to serve an Improvement Notice on them if they did not follow his recommendations.  I find it very difficult to accept that the result of the negligence action could depend upon whether the officer’s advice that the plaintiffs had followed had been given without the service of an Improvement Notice or had been incorporated into an Improvement Notice.  It seems to me that in either case the question whether a duty of care was owed should have depended on whether the imposition of the requisite duty was consistent with the statutory scheme and the statutory duties lying on the officer, as to which the various considerations expressed by Lord Browne-Wilkinson in X (Minors) -v- Bedfordshire Council would arise.  If the imposition of the duty was not consistent with the statutory scheme, there should have been no liability under the Hedley Byrne principle or under any other common law duty of care principle.  

	Be that as it may, the question for us, left open in Welton -v- North Cornwall, is whether an enforcing authority, in giving advice that leads to the issue of Improvement or Prohibition Notices, owes a duty of care to the owner of the business enterprise in question.  In my judgment, subject to one qualification not relevant to the present case, it does not.  It is implicit in the 1974 Act that Improvement Notices and Prohibition Notices may cause economic loss or damage to the business enterprise in question.  It would, in my view, be seriously detrimental to the proper discharge by enforcing authorities of their responsibilities in respect of public health and safety if they were to be exposed to potential liability in negligence at the suit of the owners of the businesses adversely affected by their decisions.  The 1974 Act itself provides remedies against errors or excesses on the part of inspectors and enforcing authorities.  I would decline to add the possibility of an action in negligence to the statutory remedies.

	The one qualification I have in mind is this.  It could be that a particular requirement imposed by an inspector, whether expressed in an Improvement Notice or Prohibition Notice or expressed in advance  advice, might introduce a new risk or danger not present in the business activity as previously conducted.  The new risk or danger might materialise and result in economic damage to the business itself as well as physical damage to person or to property.  We do not need to decide the point but I would not be prepared to rule out the possibility that damage thus caused could be recovered by means of a negligence action.  Capital & Counties PLC -v- Hampshire County Council [1997] 2 AER 865 seems to me to provide support to such an action.  But the present case is not of that sort.  Mr Evans’ allegedly negligent advice did not lead to the introduction of any new danger in the carrying on by the Plaintiff of his bungee jumping business.  What it did do was to lead to statutory restraints being placed on the Plaintiff’s ability to carry on his business.  A negligence action to compensate the Plaintiff for the damage thereby caused to his business cannot, in my judgment, be brought.

	The conclusion to which I have come on the duty of care point is sufficient for the Defendants’ purposes.  I should, however, express my view on the two additional grounds of appeal on which Mr Carlisle has relied.  Neither of these was relied on in the court below.

	First, it is contended that Mr Evans is entitled to immunity from suit in respect of the advice he gave to the respective local authorities.  Reliance is placed on the line of authorities under which witnesses in court proceedings cannot be sued in respect of anything said, even if said falsely, maliciously and without reasonable or probable cause, as part of their evidence in court.  The authorities were examined by the Court of Appeal in Silcott -v- Commissioner of Police for the Metropolis (1996) Vol. 8 ALR 633.  Simon Brown L.J. said, at p.640:-

	“Protection must extend to the preparation of evidence equally as to its presentation”.

	and that:-

	“... Drake J was correct in Evans to have held that the immunity covers all conduct that can fairly be said to be part of the investigatory and, I would add, preparatory process”.

	Mr Carlisle submitted that the advice given by Mr Evans on which this negligence action is based might have led to a prosecution under section 2 or section 3 of the 1974 Act.  If it had led to a prosecution, it would, he said, have been entitled to witness immunity.  In the event, it led not to a prosecution but to the service of Improvement Notices and Prohibition Notices.  These, in turn led (or could have led) to appeal proceedings before the industrial tribunal.  Mr Evans’ advice was given as part of the preparatory process that led to the industrial tribunal proceedings and formed part of the evidence that he would have given, or, perhaps, actually gave.

	I follow the argument, but the immunity contended for cannot, in my judgment, be relied on in aid of the Defendants’ striking-out application.  The availability of an immunity from suit plea must, in my opinion, depend upon the purposes for which the statement in question was made.  In some cases it may be obvious that the statement was made for the purpose of court proceedings.  In the present case it is far from obvious.  If, at trial, evidence were to be given by Mr Evans, and accepted by the court, that in giving his advice he had regarded himself as supplying the local authorities with a statement of the evidence he would give in proceedings which he expected would follow, it might be that the immunity could be claimed.  But the point is one for trial and not for a striking-out application.

	Finally there is Mr Carlisle’s point that, because the Plaintiff appealed to the industrial tribunal against the Teignbridge District Council’s Notices and lost, he cannot be allowed to re-litigate in a negligence action the question whether Mr Evans’ advice was competent.  The negligence action is, Mr Carlisle submitted, an impermissible collateral attack upon the decision of the industrial tribunal.

	The importance, for public policy reasons, of barring “the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings ...”.  (per Lord Diplock in Hunter -v- Chief Constable of the West Midlands Police [1982] A.C. 529) was strongly affirmed by Sir Thomas Bingham M.R. (as he then was) in Smith -v- Linskills [1996] 1 WLR 763 at p. 773.  But there are established exceptions to the bar, one of which is the emergence of fresh evidence.  In Walpole -v- Partridge & Wilson [1994] 1QB 106, Ralph Gibson LJ described the exception thus:-

	“If the plaintiff introduces fresh evidence, that is evidence which was not available, or could not by reasonable diligence have been obtained at the first trial, which `entirely changes the aspect of the case’ (see Hunter’s case [1982] AC 529, 545) he may pursue his claim ...”. (p.115).

	In the present case the evidence that led to the withdrawal by Teignbridge District Council and North Devon District Council of their respective notices in November 1993 and February 1994 may well have constituted evidence that was not reasonably available to the Plaintiff at the time of the industrial tribunal hearing in October 1993.  At least it cannot be determined at this stage of the proceedings what was the availability of that evidence in October 1993.  This, too, is not a striking-out point.

	Accordingly, I would allow the appeal on the single ground that an inspector under the 1974 Act cannot be made liable in an action in negligence for economic damage caused to a business by Notices under the 1974 Act, whether the Notices have been issued by the inspector himself or by some enforcing authority acting on advice given by the inspector.

	I would, therefore, allow the appeal and restore the order of the Master striking-out the action.

Lord Justice Auld

I agree.

Lord Justice Schiemann

I also agree.

		ORDER:  Appeal allowed; order of the master set aside by the judge below be restored; costs in this court be paid by the Legal Aid Board under section 18; costs below be paid by the plaintiff, not to be enforced with leave of the court; legal aid taxation; leave to appeal to the House of Lords refused.
		(Order not part of approved judgment)