DUTY TO VISITORS AND TRESPASSERS
A duty of care is owed between an occupier of premises and his/her lawful visitors [note 1], and an occupier also owes a limited duty of care to trespassers [note 2]. 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.
An occupier owes the ‘common duty of care’ to all his/her visitors. This is a duty to take such care (as is reasonable in the circumstances of the case), to see that the visitor will be reasonably safe in using the premises for the purposes for which he/she is invited or permitted by the occupier to be there [note 3].
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 [note 4].
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. There is further imposed a liability for damage to property brought onto the premises by a visitor, whether or not the property belongs to the visitor [note 5], but this liability is not imposed in relation to trespassers [note 6]. Therefore, a trespasser or other uninvited entrant cannot make a claim for damage to property.
In addition to the above duties of care and any other duty of care, there is a liability for defective premises, which could be relevant if the insolvent was a landlord in respect of any premises [note 7]. This 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. This duty 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.
The official receiver should take steps to minimise the danger to visitors to the premises and to the public generally. Otherwise, he/she might face a claim if, being aware of the hazards of potentially dangerous property, or of any potential danger on the property, he/she 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, e.g. machinery, should therefore be adequately secured against trespassers and if there are any potential dangers on the property, visitors should be warned in advance. With both visitors and trespassers, there is provision for the occupier to exclude his/her 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 8]. Note that the ability to exclude liability is limited in the case of premises which are used by the occupier for business purposes [note 9].
The official receiver should consider whether it would be appropriate and advisable to erect a notice at any premises where he/she is aware of an actual or potential danger or seek to warn visitors in some other way. Insurance is not in itself an answer to the official receiver’s possible liability in damages but he/she should ensure that adequate insurance cover, particularly public liability cover, is in force as a matter of urgency. Reference should be made to paragraph 31.0.6 and Chapter 49 for further guidance concerning insurance cover. The official receiver should, however, also have regard to the resources he/she has available to reduce the risk of liability, including the funds available in the insolvent estate.
If the insolvent has vacated the premises and a mortgagee is in possession, either independently or through an agent, e.g. 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 the bankrupt 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. The official receiver should not normally insure fully charged assets; see paragraph 31.0.6.
[Back to Part 6 – Securing and protecting premises]