What Is Absolute Liability In Insurance?

For example, if a hazardous gas escapes, the responsible company will be fully liable to all persons who are harmed as a result of the disaster. In Rylands V Fletcher, such liabilities do not give rise to any exceptions or exclusions to the strict liability principle.

What is strict and absolute liability?

  • Anyone can be held liable in strict responsibility, but only an enterprise can be held guilty in absolute liability (commercial objective).
  • The escape of a harmful thing is required in strict responsibility, whereas in absolute liability, an entity can be held liable even if it does not escape.
  • In strict liability, a person has certain exceptions, whereas in absolute liability, there are no defenses.

Is absolute liability a no fault liability?

In the case of M.C.Mehta v Union of India, the rule of absolute liability was developed. This was a significant landmark decision that established a new rule in the history of Indian law. The rule stated that if an enterprise is engaged in a hazardous or inherently dangerous activity and someone is harmed as a result of an accident in the operation of that hazardous or inherently dangerous activity, the enterprise is strictly and absolutely liable to compensate all those who are harmed.

On the 4th and 6th of December, 1985, there was a serious oleum gas leak in the city of Delhi. This occurred at one of the Shriram Foods and Fertilizers Industries units of the Delhi Cloth Mills Ltd, resulting in the death of one advocate practicing in the Tis Hazari Court and the affliction of several others. The case was filed as a writ petition in the name of public interest litigation (PIL). Litigation for the protection of the public interest is known as public interest litigation in Indian law. It is a type of lawsuit filed in a court of law by the court or any other private person, rather than the injured party. The individual who is the victim of a breach of his or her right does not need to personally approach the court in order for the court to exercise its jurisdiction. The authority provided to the public by courts through judicial activism is known as public interest litigation. The individual making the petition, however, must demonstrate to the court that the petition is being submitted in the public interest rather than as a frivolous lawsuit by a busybody.

The issue that was raised was a very serious one. It stated that if all of these catastrophes follow the strict liability rule, they will fall within the Rylands v Fletcher exceptions.

The Supreme Court made a daring move to develop a new norm that is appropriate for India’s economic and social realities. In place of the strict liability rule, the rule of absolute liability was established. All of the exclusions in the Rylands v Fletcher case were ignored by this rule.

The rule stated unequivocally that where an enterprise engages in a hazardous or inherently dangerous activity and causes harm to anyone as a result of an accident in the operation of such hazardous or inherently dangerous activity, the enterprise is strictly and absolutely liable to compensate all those who are harmed by the accident, and such liability is not subject to any of the exceptions that apply to the tortious principle of strict liability.

  • Any business that engages in dangerous operations for private profit has a social obligation to pay persons who are injured in an accident, and such losses should be absorbed as an item of overhead expenses.
  • Only the enterprise has the resources to identify and protect against such threats and dangers.

This is a detailed explanation of M.C.Mehta v Union of India’s absolute liability or rule. The court also determined the amount of compensation that the company must pay. It was stated that the larger and more profitable the business, the greater the amount of compensation payable for harm caused by an accident when the business was engaged in a hazardous or dangerous activity.

Is absolute liability the same as negligence?

In strict liability situations, the defendant is held automatically liable for any damages he or she causes. In negligence cases, on the other hand, the defendant must show that he or she failed to act as a reasonable person would under the circumstances in order to be compensated.

Is husband vicariously liable for wife?

I Liability of Husband for Wife’s Torts Furthermore, a wife could not be sued without her husband being named as a defendant. Following certain activities, a wife may sue or be accused without having to include her husband as a co-defendant. If the husband and wife are both joint tortfeasors, they may be held jointly accountable.

What are the exceptions of absolute liability?

Dangerous Substances: Only if a dangerous substance is used, the defendant will be held strictly liable “substances that are “dangerous” escape from his premises.

A dangerous substance might be defined as any material that will create mischief or harm if it escapes, for the purposes of establishing strict responsibility. Dangerous items include explosives, hazardous gases, electricity, and other such items.

Another requirement for holding the defendant strictly accountable is that the material must escape from the premises and not be within the defendant’s access after it has escaped.

For example, the defendant’s property contains a poisonous plant. The plant’s leaves fall onto the plaintiff’s property and are eaten by his cattle, who die as a result. The loss will be the defendant’s responsibility. The defendant, on the other hand, would not be liable if the plaintiff’s cattle entered the defendant’s grounds and ate the poisonous leaves and died. In the case of Reads v. Lyons & Co., the court decided that if there is no escape, the defendant cannot be held accountable.

Non-natural Use: A non-natural use of the land is required to establish strict responsibility. The water gathered in the reservoir was ruled a non-natural use of the land in the decision of Rylands v. Fletcher. Water storage for home purposes is termed natural use. However, the Court ruled that holding water for the purpose of energizing a mill was not natural. When it comes to the expression “If the term “non-natural” is used, it should be remembered that there must be some unique use that increases the risk to others. Natural uses of land include the supply of cooking gas through pipeline, electric wiring in a home, and so on. For example, if a spark escapes from the defendant’s fireplace and creates a fire, the defendant will not be held accountable because it was a natural use of the land.

To create a strict liability, all three conditions must be met at the same time.

Exception to the Rule of Strict Liability

Plaintiff’s Fault: If the plaintiff is at fault and any damage results, the defendant will not be held accountable because the plaintiff came into touch with the dangerous object.

In the case of Ponting v Noakes, the plaintiff’s horse died after entering the defendant’s land and eating some poisonous leaves. The defendant could not be held strictly accountable for the loss because it constituted a wrongful incursion, according to the Court.

Act of God: An event that is beyond the control of any human agency is referred to as a “act of God.” Such activities occur solely as a result of natural causes and cannot be stopped, even with extreme prudence and foresight. If the harmful substance escapes due to an unforeseeable and natural incident that could not have been controlled in any way, the defendant would not be liable for the loss.

Third-Party Act: The rule does not apply when the damage is caused by the actions of a third-party. The term “third party” refers to someone who is neither the defendant’s servant nor has the defendant any contract with them or authority over their employment. However, where the actions of a third party can be predicted, the defendant must use caution. He will be held accountable if this does not happen.

The Court concluded that the defendant would not be liable in the case of Box v Jubb, where the defendant’s reservoir overflowed because a third party discharged his drain into the defendant’s reservoir.

Plaintiff’s Consent: This exception is based on the principle of violenti non fit injuria.

For example, if A and B are neighbors and share the same water supply, which is located on A’s land, and the water escapes and causes harm to B, B will not be entitled to sue for damages because A is not responsible for the damage.

Absolute Liability

In simple terms, the rule of absolute liability is the rule of strict liability minus the exclusions. In the case of MC Mehta v Union of India, the rule of absolute liability was established in India. This is one of the most important decisions concerning the concept of absolute liability.

The circumstances of the case are that some oleum gas from industrial leaked in a certain neighborhood of Delhi. Many people were harmed as a result of the breach. The Supreme Court therefore based the rule of absolute liability on the rule of strict liability, stating that the defendant would be accountable for the damage inflicted regardless of the strict liability exceptions.

According to the rule of absolute liability, if a person is engaged in an inherently dangerous or hazardous activity and any harm is caused to another person as a result of an accident that occurred while performing such an inherently dangerous and hazardous activity, the person who is engaged in such activity will be held absolutely liable. The exception to the strict responsibility rule would likewise not be taken into account. The Supreme Court applied the rule established in the case of MC Mehta v UOI when resolving the matter of the Bhopal Gas Tragedy. The Indian legislature created the Public Liability Insurance Act in 1991 to ensure that victims of such catastrophes receive prompt assistance through insurance.

The Public Liability Insurance Act, 1991

This legislation was enacted with the intent of providing quick relief to those who have been injured in accidents involving the handling of dangerous substances. The Act’s major goal is to establish a public liability insurance fund that would be utilized to pay victims.

According to the Act, anybody who engages in intrinsically risky or hazardous activities should have insurances and policies in place that cover him against liability and offer compensation to victims in the event of an accident or injury. The notion of “no fault liability,” or, in other words, the rule of strict liability and absolute liability, underpins this liability. Any mixture, preparation, or substance that, due to its qualities, might cause substantial harm to humans, animals, plants, property, or the environment falls under the definition of an inherently dangerous or hazardous substance. If a substance is intrinsically harmful or hazardous as a result of its handling, the defendant faces absolute culpability.

Concluding Remarks

Strict liability and absolute liability are exceptions to the rule. Only when a person is at fault is he held accountable. The concept that governs these two regulations, however, is that a person can be held liable even though he is not at fault. This is known as the “no fault responsibility” principle. According to these laws, even if the liable person did not commit the act, he is nevertheless liable for the damages incurred as a result of the act. There are certain exceptions to strict liability in which the defendant is not held accountable. In the instance of absolute liability, however, there are no exceptions for the defendant. No matter what, the defendant will be held accountable under the strict responsibility rule.

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How is absolute liability different from the rule in Rylands v Fletcher?

The first section of the analysis examines the seminal decision of Rylands v. Fletcher, which established the strict liability standard. The essentials and exceptions to the strict liability rule are then examined. It also delves into the landmark case of M.C. Mehta vs. Union of India in order to grasp the concept of absolute liability and then provides some insight into the essentials.”

In the year 1868, the strict liability rule was established. According to this rule, in this scenario, anyone who keeps a hazardous substance on his property will be held accountable if that substance escapes and causes injury to others. It would be immaterial at that stage whether the defendant had exercised reasonable caution or was negligent. Under this approach, a person would be held accountable even if he had taken reasonable precautions, unless there are specified circumstances that allow the defendant to escape liability.”

Rylands and Fletcher were two individuals that lived close to one other. Fletcher owned a mill and built a water reservoir on his property to meet the mill’s energy needs. He had enlisted the help of independent contractors and engineers to complete the project. There were ancient unused shafts beneath the reservoir site that the engineers were unaware of and hence did not block. When the reservoir was filled with water, the shafts leading to Rylands property burst due to the contractors’ incompetence. Ryland suffered significant damage and loss as a result of the water entering his coal mine. Ryland then filed a lawsuit against Fletcher.

Issues: The question was simple: should a plaintiff be put at danger because of someone else’s actions that resulted in a part of his property being removed? It was surprising in light of the fact that the claimant had shown no negligence or expectation.”

The respondent’s plea was dismissed by the House of Lords, and he was found accountable for all of the damages to Rylands’ mine. According to the rule established by this case, if a man expedites his territory and keeps any dangerous thing there, a thing that is likely to cause insidiousness if it escapes, he will be liable for the harm caused by its escape at first sight, despite the fact that he had not been careless in keeping it there. Despite the fact that there was no fault or carelessness on the part of the litigant, he was held accountable because he kept an unsafe thing on his premises, and the said hazardous thing escaped and caused harm.”

According to the rule established by this decision, if a person places on his land and keeps any dangerous thing there, a thing that is likely to produce mischief if it escapes, he is prima facie liable for the damage caused by its escape, even though he was not negligent in keeping it there. The liability arises not because of any fault or negligence on the part of the person, but because he kept something harmful on his property and it escaped and caused damage. The concept of strict responsibility applies in this situation because liability arises even if there is no fault on the part of the defendant. Since a result, this is one of the most significant landmark decisions in the history of the legal system, as it resulted in the formation of a new notion, an idea, and consequently a new principle—the strict liability rule. Certain qualifications were offered based on his concepts to determine whether a liability was strict liability or not. A obligation can only be classified as strict liability if these fundamental requirements are met.”

  • Dangerous substance: This means that the defendant would only be liable for damages if anything dangerous had escaped from the property. The phrase “dangerous” here refers to the possibility of suffering if it departs the defendant’s territory. The accumulated water in the Fletcher pool was toxic in the preceding case. Objects such as gasoline, electricity, bombs, flag poles, harmful smoke, vibration, yew trees, sewage, and even rough wires might be considered hazardous if they escape from the owner’s property, according to the legislation.”
  • Escape: Another important component of Strict Liability is escape, which specifies that anything that causes harm to another person must be escaped from the person’s property and should not be within reach of the person. For instance, suppose A has developed some poisonous plants that could cause great injury to anyone or any animal who consumes them. If B’s Sheep ate that plant because some of them had fallen in B’s land, then A is obligated to recompense B for his loss; but, if B’s Sheep entered A’s land and ate that plant, then A is not liable for the loss.”
  • Non-natural use: This means that if stored water is used for a natural purpose, such as domestic purposes, a person cannot be held liable for any harm caused by it; however, if it is used for a non-natural purpose, such as in the case of Rylands Vs. Fletcher, the defendant used the land for the construction of a reservoir to benefit its mill, which put others in danger, and he was liable for the plaintiff’s loss.”
  • Damage caused by the plaintiff’s own fault: Damage caused by the plaintiff’s own fault might be utilized as a good defense. That example, if the plaintiff causes harm to the defendant’s property through his own incursion, he has no right to complain about the damage. In one example, the plaintiff’s horse died after chewing the leaves of poisonous plants put on the defendant’s property. It was argued that because the horse intruded onto defendants’ land and ate leaves, defendants would not be held accountable. Furthermore, if the plaintiff’s damages were caused not by the defendant’s departure but by its inability to handle throughout its normal course of business, the defendant will not be held accountable.”
  • Act of God: It has long been assumed that if an incident occurs as a result of an unforeseeable event over which the human body has no control, the person cannot be held liable for any responsibility that arises or any incident that occurs as a result of it. In this case, the defendant created artificial lakes over his land by damming up a natural stream, as held in a case that serves as a good illustration of an Act of God. There was exceptional rain that year, which had never happened before in human history. The lakes overflowed as a result of the severe rain, causing damage to plaintiff’s property. It was decided that the defendant could not be held accountable since the event was unforeseeable, and so the defendant could not be held liable under the strict responsibility rule.”
  • Plaintiff’s consent: If the plaintiff has willingly consented to endure the harm for the mutual advantage of both, the defendant will not be held accountable. That is, if the plaintiff freely consented to the installation of such a dangerous object on the defendant’s property, the defendant will not be held liable for the plaintiff’s damage. In one case, there was a two-story building with the plaintiff acquiring the bottom floor and the defendant acquiring the first floor. A leak from the upper floor of the building occurred, which both the plaintiff and defendant agreed to store. The defendant was not to blame for the leak. Plaintiff’s goods were harmed as a result of the leak. It was decided that because the damage was caused by a consented act, the defendant could not be held accountable.”
  • Act of a third-party: If the plaintiff suffers damage as a result of the defendant’s negligence but as a result of a third party who was neither the defendant’s servant nor related to the defendant, the defendant will not be held accountable. As in a situation where water from the defendant’s reservoir overflowed, causing damage to the plaintiff. It was discovered that the overflow occurred as a result of a stranger, i.e., a third party, blocking the drain. Under the strict responsibility rule, the defendant was not held guilty.”

The research analysis reveals that there are some exceptions to the strict liability rule; thus, the null hypothesis, i.e., that there are no exceptions to the strict liability rule, can be rejected, and the alternate hypothesis, i.e., that there are some exceptions to the strict liability rule, can be accepted.”

After the case of M.C. Mehta vs. Union of India, also known as the Oleum Gas Leak case, absolute liability became a legal doctrine in India. This was a watershed moment in the development of the absolute liability theory. This principle is a sort of no-fault strict liability. That is, unlike in Rylands vs. Fletcher, the defendant will not be entitled to raise any defense under this concept.”

Facts: On the fourth and sixth of December, 1985, a severe oleum gas spill occurred in one of Shriram Foods and Fertilizers Industries’ units in Delhi, which was affiliated with the Delhi Cloth Mills Ltd. As a result of this, a backer honing at the Tis Hazari Court had died, and countless others had been affected. The court received a writ appeal via method for open intrigue suit (PIL).”

Issues: It was argued that if all of the tragedies arising from the handling of massive production lines are subjected to stringent liability regulation, they will fall within the exemptions and be free of blame for the harm they have caused as a result of their actions.

The Court noted that this was the second large-scale spillage of a lethal gas in India within a year, since more than 3000 people had died a year earlier as a result of the spillage of gas from the Union Carbide facility in Bhopal, and lakhs more had been exposed to various illnesses. If the strict risk control established in Rylands v. Fletcher was linked to such circumstances, the people who had built up the risk would be harmed “Businesses in and around densely populated areas could argue that they are exempt from liability for the destruction they cause by citing some exceptions. “Absolute Liability,” published by then-Chairman of the Supreme Court of India PN Bhagwati, was subsequently developed by the Supreme Court.”

Analysis: According to the needs of law at the time, the law handed down by the English government in the case of Rylands v. Fletcher was justifiable. However, in the modern industrial society with highly developed scientific knowledge and technology, where it is necessary to run hazardous or inherently dangerous industries as part of the development programme, it is not necessary or binding for the Indian government to strictly follow the rule laid down in the late nineteenth century. This regulation was established in the nineteenth century, when science and technology had not progressed to the extent that they have in today’s economy and social structure. The law must adapt to the changing requirements of society and the changing social structure. The law can no longer afford to be static. New concepts must be developed, and modern and revised rules must be established in order to appropriately address the difficulties of a new and industrialized economy. We cannot allow judicial reasoning to be limited to the laws of England or any other nation. As a result, the absolute liability principle was established.”

  • Hazardous or inherently dangerous activities: Under the rule of absolute liability, if a person is engaged in an inherently dangerous or hazardous activity and any harm is caused to another person as a result of an accident that occurred while performing such an inherently dangerous and hazardous activity, the person who is engaged in such activity will be held absolutely liable.
  • Escape is not required: The escape of a dangerous thing from one’s own property is not required; it simply implies that the law of absolute accountability applies to those hurt both inside and outside the premises.”
  • There are no exceptions under Strict Liability, and if a case falls under one of those exceptions, the defendant is not accountable for the act. Absolute Liability refers to a situation in which the defendant is obligated to pay compensation and cannot claim any of the exceptions as a defense.
  • Applies to Non-Natural and Natural Land Uses: The Ryland v. Fletcher rule only applies to non-natural land uses, but the new rule of absolute liability applies to both natural and non-natural land uses. If a person uses a dangerous material that is a natural use of land and the substance escapes, he will be held accountable even if he has taken all reasonable precautions.”
  • Damages Amount: The amount of damages is determined by the institute’s size and financial capability. The enterprise must be held to be under an obligation to ensure that the hazardous or inherently dangerous activities in which it is engaged are conducted with the highest standards of safety and security, and if any harm results as a result of such negligent activity, the enterprise/institute must be held absolutely liable to compensate for any damage caused, and no opportunity must be given to the enterprise to say that it had not done so.

What do you mean by mens rea?

In Anglo-American law, mens rea refers to criminal purpose or an evil mind. The definition of a criminal offense, in general, includes not only the act or omission and its repercussions, but also the actor’s mental state. For most crimes, all criminal justice systems require an element of criminal intent. The word mens rea, on the other hand, is only used in Anglo-American systems. Unless a special regulation instructs otherwise, countries like France and Japan merely state that there must be a criminal intent.

Is Rylands v Fletcher a tort?

Fletcher vs. Rylands The House of Lords made a ruling in UKHL 1 that established a new area of English tort law. Rylands hired contractors to construct a reservoir and took no part in the process. The contractors elected to continue working rather than properly closing up a series of ancient coal shafts that had been poorly filled with rubble. As a result, Rylands’ reservoir burst on December 11, 1860, shortly after being filled for the first time, flooding a nearby mine run by Fletcher, causing £937 in damage (equivalent to £90,000 in 2020). Fletcher filed a negligence claim against Rylands, and the matter eventually went to the Exchequer of Pleas. The majority of the judges in the first instance court ruled in favor of Rylands. Dissenting, Bramwell B contended that the claimant has the right to enjoy his land without interruption from water, and that the defendant was therefore guilty of trespass and annoyance commissioning. The “Rule in Rylands v Fletcher” states that “the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not, is prima facie answerable for all the damage which is the natural consequence of its escape.”

English courts developed this doctrine further, and it had an immediate impact on the law. Prior to Rylands, English courts had not relied on strict responsibility in similar circumstances, instead focusing on the motivation behind the conduct rather than the nature of the actions themselves. Rylands, on the other hand, imposed severe liability on persons found to be harmful in this manner without requiring proof of a duty of care or carelessness, bringing the law in line with that governing public reservoirs and signaling a fundamental doctrinal shift. Academics, on the other hand, have criticized it for the potential economic harm that such a philosophy could produce as well as its restricted applicability.

Which liability is absolute in tort?

When compared to the former rule, the reach of the absolute liability rule is far broader in all aspects. Because it is not covered by any exceptions in the new rule. Not only does it cover public negligence or wrongdoing, but it also covers personal harm caused by a neighbor’s misconduct. It now applies not only to those who occupy the land, but also to those who are not the landowners. Absolute liability was raised in the case of M.C. Mehta vs. Union of India, which is considered one of India’s key judicial decisions. Following this lawsuit, the rule was established that any business engaged in any type of hazardous or intrinsically dangerous material that could result in any kind of harm would be completely accountable to recompense all those who were harmed, as happened in the case of the Bhopal Gas Tragedy.