Privity

Privity (pronounced priv-i-tee)

(1) Private or secret knowledge.

(2) Participation in the knowledge of something private or secret, especially as implying concurrence or consent.

(3) Privacy or secrecy (obsolete).

(4) In medieval theology, a divine mystery; something known only to God, or revealed only in the Holy Scriptures (obsolete).

(5) The genitals (archaic, and only in the plural).

(6) In law, a relationship between parties seen as being a result of their mutual interest or participation in a given transaction, usually in contract.

(7) The fact of being privy to something; knowledge, compliance (now rare).

1175–1225: From the Anglo-Norman priveté & privitee and the Middle English privete & private, from the Old French priveté, privité & priveté (privacy; a secret, private matter), the construct being privé (from the Late Latin privus (set apart, belonging to oneself)) + -té (from the Middle French -té, from the Old French -té, from the Latin -itātem or -tātem, accusative singular of -tās, ultimately from the primitive Indo-European -tehts; the suffix was used to form nouns, often denoting a quality or a property).  The ultimate source was the Classical Latin privātus (perfect passive participle of prīvō (I bereave, deprive; I free, release).  Privity is a noun; the noun plural is privities.

Between the twelfth & sixteenth centuries a privity was “a divine mystery; something known only to God, or revealed only in the Holy Scriptures and by the late 1200s this meaning had leaked into a general sense of “privacy; secrecy”, used between the fourteenth & seventeenth centuries to refer to “a private matter, a secret”.  The use to describe the genitals (presumably influenced in some way by “private parts” or “the private”) as “the privities” is attested from the late fourteen century and didn’t wholly fade from use until the early nineteenth although use had by then long declined to a northern English, Irish & Scottish regionalism.  The word was used from the 1520s as a technical term in the laws regulating feudal land tenure and other fields of law picked it up in the general sense of “a relationship between parties seen as being a result of their mutual interest or participation in a given transaction”; it was in contract law this would assume it’s important meaning as “privity of contract” (describing the special status of the parties to a contract (as legally defined), something which would for centuries be of critical importance and still in use today.  Less precise was the sixteenth century sense of “the fact of being privy to something; knowledge, compliance” and while there are better ways of saying it, such use is not yet extinct.

Privity of contract, Donoghue v Stevenson and the snail.

The classic case (drummed for almost a century into law students) in the demolition of the sense of the absolute in privity of contract was Donoghue v Stevenson ([1932] A.C. 562, [1932] UKHL 100, 1932 S.C. (H.L.) 31, 1932 S.L.T. 317, [1932] W.N. 139), finally decided before the House of Lords.  It was the case which more than any other established the foundation of the doctrine of product liability, refined the concept of negligence (transforming tort law) and remains a core part of the framework for the principles of “duty of care” which substantially it expanded.

The extraordinary case began with events which transpired in the modest settings of the Wellmeadow Café in Paisle, Scotland, Mrs Donoghue’s friend on 26 August 1928 buying her a ginger-beer, served in a bottle made from a dark, opaque glass.  After she’d consumed about half, the remainder was poured into a tumbler at which point the partially decomposed remains of a snail floated out, inducing an alleged shock and severe gastro-enteritis.  Because Mrs Stevenson was not a party to the contractual purchase of the ginger beer, she was unable to claim through breach of warranty of a contract: she was not party to any contract because, at law, she received the drink as a gift.  Accordingly, she issued proceedings against Stevenson (the manufacturer) and, after some four years in the lower courts, the matter ended up before the House of Lords, then the UK’s highest appellate court.

All were aware it was an important case.  The lower courts, bound by precedent, had been compelled to find the absence of privity of contract doomed the suit but the issue of product liability in the modern era of consumers interacting usually not directly with the producer of goods but their agents or retailers had for some time been discussed as an area of law in which reform was required.  What the Law Lords had to decide was whether the manufacturer owed Mrs Donoghue a duty of care in the absence of contractual relations contrary to established case law.  The important point was not if she was owed compensation for damages suffered but if a cause of action existed.

Previously, as a general principle, manufacturers owed no duty of care to consumers except if (1) the product was inherently dangerous and no warning of this sate was provided and (2) the manufacturer was aware that the product was dangerous because of a defect and this had been concealed from the consumer.  The Lords found for Mrs Donoghue although in a cautious judgement which could be read as offering little scope for others except the specific matter of ginger beer in opaque bottles containing the decomposed remains of a dead snail when sold to a Scottish widow.  However, the mood for reform was in the legal air and the judgment established (1) negligence is distinct and separate in tort, (2) there need not be privity of contract for a duty of care to be established and (3) manufacturers owe a duty to the consumers who they intend to use their products.

In the leading judgment, Lord Atkin (James Richard Atkin, 1867–1944; lord of appeal in ordinary 1928-1944) wrote, inter alia, what was at that time the widest definition of the “neighbour principle”: “The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply.  You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour.  Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”  On this basis, if no other, the Lords held Mrs Donoghue’s action had succeeded and she had a cause of action in law, the culmination of a growing appreciation by the courts that the law needed to evolve to reflect the patterns of modern commerce.  Some years before Donoghue v Stevenson had been decided, another judge had observed “…it would appear to be reasonable and equitable to hold that, in the circumstances and apart altogether from contract, there exists a relationship of duty as between the maker and the consumer…”

Once, if someone bought two bottles of ginger beer and gave one to a friend, were both to be injured by decomposing snails within, only the consumer who handed over the cash could have recovered damages because they alone enjoyed a privity of contract.  Since Donoghue v Stevenson, both can in court seek remedy in tort on the basis of “product liability”, a manufacturer’s duty of care held to extend to all consumers of their products.

Being the common law, what was effectively a new doctrine (and one, as the term “neighbour principle” suggests, rooted in Christian morality) it was also a general principle and thus a foundation on which the building blocks of subsequent judgments would sit; it could not be treated, in the words of Lord Reid (James Scott Cumberland Reid, 1890–1975, lord of appeal in ordinary 1948-1975): “…as if it were a statutory definition. It will require qualification in new circumstances.”  The courts in the years after 1932 had ample opportunity to refine things and this included the development of the modern tests in tort for the “foreseeability of damage” and “proximity” to which was later appended the surprisingly recent “fairness”, something which came to be regarded as within the rubric of public policy, all able to work in conjunction and as one judge noted, the distinctions between them were “…somewhat porous but they are probably none the worse for that.”  From Donoghue v Stevenson has evolved the modern notion of product liability and it would now to many seem strange there was in living memory a time when a manufacturer could escape liability for selling defective goods simply on the basis the injured party wasn’t the purchaser.  One curious quirk of Donoghue v Stevenson remains that the facts were not tested so it will never be known if the most important character in the case (the decomposing snail) ever existed.