8.61 Occupiers’ liability duty to visitors and trespassers
A duty of care is owed as between an occupier of premises and his lawful visitors and a limited duty of care is also owed by an occupier to trespassers. Occupiers’ liability is regulated by the Occupiers Liability Acts 1957 (visitors) and 1984 (trespassers). The question of who is an occupier depends upon the particular facts of each case but generally it would be the person who is in actual occupation for the time being or who has possession or physical control of the premises. Accordingly, unless and until an insolvency practitioner is appointed, the official receiver is likely to be the occupier of the premises of the insolvent, if they have been vacated by the insolvent.
8.62 Provisions of the Occupiers' Liability Acts 1957 and 1984
An occupier owes the ‘common duty of care’ to all his visitors, i.e. a duty to take such care as in all the circumstances of the case is reasonable, to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there. The duty of care to trespassers arises only when the occupier is aware of a danger or has reasonable grounds to believe that it exists, knows or has reasonable grounds to believe that a trespasser may be or come into the vicinity of danger and, in all the circumstances of the case, the risk of a trespasser coming into the vicinity of the danger is one against which the occupier may reasonably be expected to offer some protection. The occupier’s duty also extends to anyone who suffers injury as a result of any danger arising due to the state of the premises or things done or omitted to be done on the premises, even if the person suffers injury on an adjoining highway, private road or premises. The Occupiers’ Liability Act 1957 further imposes liability for damage to property brought onto the premises by a visitor, whether or not the property belongs to the visitor. The 1984 Act does not. Therefore, a trespasser or other uninvited entrant cannot make a claim for damage to property.
8.63 Duty to visitors and trespassers where property leased by insolvent
In addition to the above duties of care and any other duty of care, section 4 of the Defective Premises Act 1972 imposes a liability for defective premises which could be relevant if the insolvent was a landlord in respect of any premises. This section provides that a duty of care is owed by a landlord to visitors, and possibly trespassers, where the premises are let under a tenancy which places the landlord under an obligation to the tenant for the maintenance or repair of the premises or where the landlord has the right to enter the premises and carry out such repairs. The duty arises when there has been a breach of that obligation to repair (or failure to exercise the right of repair) which has led to the defect in the premises which caused an injury to, or damage to the property of, the tenant or visitor or any other person who might reasonably be expected to be affected by defects in the premises. Section 4 only applies if the landlord knew or ought in the circumstances to have known of the relevant defects. The duty cannot be excluded and the official receiver as liquidator, receiver and manager or trustee may become subject to it.
8.64 Action to minimise risk of liability
The official receiver should take steps to minimise the danger to visitors to the premises and to the public generally. Otherwise, he might face a claim if, being aware of the hazards of potentially dangerous property, or of any potential danger on the property, he took no steps to prevent injury to the unwary visitor or trespasser (particularly a child) or damage to property in the possession of a visitor. Any premises of the insolvent and any potentially hazardous assets, eg machinery, should therefore be adequately secured against trespassers and if there are any potential dangers on the property, visitors should be warned in advance. Both of the Occupiers’ Liability Acts (see paragraph 8.61) provide for the occupier to exclude his liability - e.g. by the use of warning notices - but the warning must be sufficient to enable a person to be reasonably safe in order to effectively exclude liability. Note that the ability to exclude liability is limited by the Unfair Contract Terms Act 1977 in the case of premises which are used by the occupier for business purposes. The official receiver should consider whether it would be appropriate and advisable to erect a notice at any premises where he is aware of an actual or potential danger or seek to warn visitors in some other way. Assistance should be sought from Technical Section on the wording of any notice. Insurance is not in itself an answer to the official receiver’s possible liability in damages but he should ensure that adequate insurance cover, particularly public liability cover, is in force as a matter of urgency. Reference should be made to paragraph 8.70 and chapter 49 for further guidance concerning insurance cover. The official receiver should, however, also have regard to the resources he has available to reduce the risk of liability, including the funds available in the insolvent estate. Any case causing difficulty should be discussed with Technical Section.
8.65 Duty to visitors and trespassers and the involvement of a mortgagee or other financially interested party
If the insolvent has vacated the premises and a mortgagee is in possession, either himself or through an agent, eg a receiver, it is likely that the mortgagee will be the occupier of the premises for the purposes of this part of this chapter. In any particular case it may be difficult to identify who is in occupation at any one time and, if there is any residual occupation by an insolvent, e.g. if property belonging to a bankrupt remains on the premises although he himself has vacated those premises, the official receiver could still potentially be considered the occupier and be liable in damages to a visitor or trespasser. Therefore, unless it is quite clear that the mortgagee is in sole possession, a clear understanding should be reached with the mortgagee as to the steps to be taken to secure the premises, to display warning signs and to hold the official receiver indemnified for any liability that might arise. Any oral agreement should, wherever possible, be confirmed in writing. It is unlikely that a mortgagee will be willing to indemnify the official receiver for any liability other than for the cost of securing the premises. However, the official receiver should seek to place as much responsibility as possible on to the mortgagee as the party with the principal beneficial interest. Fully charged assets should not normally be insured by the official receiver - see paragraph 8.70.
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