Privity

This is dealt with by Article 4. It is one of the most important provisions and certainly the most litigated. Article 4 of the 1976 Convention brings in a radical change from the 1957 Convention and, indeed, from the United Kingdom’s domestic legislation of 1894. Article 4 of the 1976 Convention sets out new standards and provides that: ‘A person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result’. Under the former rules, conduct which would bar limitation was known as the ‘actual fault or privity rule’. ‘Actual fault’ speaks for itself. ‘Privity’ is that fault to which the person wishing to limit was privy, i.e. a fault of which he knew or of which he had ‘constructive’ knowledge. Constructive knowledge is knowledge which the court will impute to a person, saying that ‘this person in the circumstances should have had knowledge of this incident’. With respect to the words ‘intent to cause loss’ it is difficult to imagine how a claimant could prove such intent. It has yet to be seen how the courts will interpret the word ‘intent’ with respect to Article 4. Will direct or actual intent be required to be evidenced, or will the courts accept evidence of actions which leave it in no doubt that the defendant must have intended the act? With respect to the words ‘or recklessly and with knowledge that such loss would probably result’ there are similar difficulties as to how the court will interpret these words. How is recklessness to be decided? Will the test used be ‘subjective’ i.e. what did the defendant himself think? Did the defendant himself realise that he was taking a risk? Or will the test be ‘objective’ i.e. would the reasonable person have considered that a risk was being taken? What sort of ‘knowledge’ is to be required? ‘Actual’ knowledge i.e. what the defendant actually knew, or ‘constructive’ knowledge i.e. what the reasonable person in all the circumstances would have known? There can be little doubt that future years will bring protracted litigation on these questions.