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Dr David Gibbs-Kneller, Associate Professor in Private Law, UEA Law School david.gibbs@uea.ac.uk https://research-portal.uea.ac.uk/en/persons/david-gibbs-kneller
Dr David Gibbs-Kneller has published his work in the 2023 October issue of the Law Quarterly Review, (2023) 139 Law Quarterly Review 592-614. Titled ‘“A rule adumbrated”: Bailment on terms and the rule of law’, this work is an important addition to the understanding of the structural coherence of English private law and observance of the rule of law. The article argues that bailment on terms (hereinafter “the rule”) is contrary to the rule of law for two reasons, duplication and discretion, and should not be followed by future decisions.
First, the rule is a duplication of the law of contract. The rule of law requires like cases to be treated alike and different cases to be distinguished in rationally different ways. The article establishes the rule is a duplication because it is irrationally distinguished by the language spoken. For example, imagine your football team has a goal disallowed for offside. In your next match a goal is scored against you from an offside position. However, on this occasion the referee allows the goal deciding it is governed by a different rule “unfair advantage”. You would be incensed at the lack of consistency and rightly so. Like cases have not been treated alike. They have been distinguished only by the language spoken: offside or unfair advantage.
If we would not tolerate this in our favourite sport, we should not tolerate it in our legal system. Bailments is a voluntary assumption of responsibility for another’s property. The terms the property is bailed on to the bailee are binding on the bailor when the bailor consented to bailment on those terms. Contract already functions to determine when parties are bound to contractual terms, holding that gratuitous promises are not binding in the absence of legal consideration. Consent alone is insufficient. That means the rule is a duplication. Like cases are not treated alike because both rules rest on the same justificatory principle for rights, consent, but are irrationally distinguished by the language spoken: contract or bailments.
This duplication could be tolerated if what a bailment is was certain. The rule may be irrationally distinguished but we could be sure that where there is a bailment the rule takes priority over contractual rules. However, there is a second reason the rule is contrary to the rule of law: discretion. The rule of law is that law, not discretion, decides cases. If bailments and contract rest on the same justificatory principle and are distinguished only by the language spoken, the descriptive terms of bailments are the only thing keeping the two separate. Descriptive terms of bailments are easily manoeuvrable by judges when they think justice demands consent should be binding without having to rationally explain why the case should be treated differently from the contract cases. That is a discretion, not law. This has occurred in the highest authority in the House of Lords decision Homburg Houtimport BV v Argosin Private Ltd [2003] UKHL 12, when it used the descriptive term “continuous possession” to distinguish a shipowner’s liability in bailments from stevedores’ liability in contract.
While consent is a rational reason to bind someone to terms, and not doing so may lead to injustice, the rule of law should be prioritised and deny the potential injustice to consenting parties. This is for three reasons. First, if bailments is distinguished by the language spoken, the rule risks imposing contractual liability on to parties who did not consent to being bound. By doing so, that risks undermining their individual liberty by redistributing the risk they did consent to in contract, causing injustice rather than preventing it. Second, if contractual liability can be imposed on parties this can reorder established legal rights, such as in secured credit transactions. That is problematic because giving priority to a bailee’s personal right to property over a creditor’s security over the property risks increasing the cost of credit or limiting the use of property. Either option is rarely desirable. Finally, the injustice should be denied because it erodes the rule of law at a principled level. If parties cannot be sure what language the court will speak, they cannot plan their affairs with certainty and there will be no equality before the law. Parties may then switch between bailments and contract to avoid the procedural limitations of the other, creating a strain on court resources. The bailments judge cannot say consenting parties are bound while the contract judge says they are not. The way to resolve this conceptual incoherence in private law is to discuss when contractual terms should be binding and not resorting to verbal formulae. In conclusion, there should be one rule, not two.