Railway and Canal Traffic Act 1854
Encyclopedia
The Railway and Canal Traffic Act 1854, also known as Cardwell's Act, was an Act of the United Kingdom Parliament regulating the operation of railways. It designated the railway companies as common carrier
s transporting goods and persons for the public benefit. Each railway company was now required to take all trade offered and to set and publish the same levels of fares to all in respect of any particular service.
The Act marked a milestone in English law
and has also served as the foundation of similar legislation in the United States.
As Sir Alexander Cockburn
told the House of Lords
in 1863:
The 1854 Act therefore sought to put an end to this practice and reverse the jurisprudence in favour of railway operators, returning to the pre-railway age position where the courts were in the habit of construing contracts between individuals and carriers to the disadvantage of the latter.
The Act was promoted by Viscount Cardwell
, the President of the Board of Trade and chairman of the Select Committee responsible for the examination of the various amalgamation bills passing through Parliament. The Committee recommended that "Parliament should secure freedom and economy of transit from one end of the kingdom to the other and should compel railway companies to give the public the full advantage of convenient interchange from one railway system to another", and so came about the Railway and Canal Act 1854.
In a case decided in 1910, the Court of Appeal
rejected a claim by Spillers
that the Great Western Railway
had breached this obligation when it refused to transport Spillers' loaded grain vans. According to Lord Justice Kennedy, the railway was only obliged to transport "merchandise", this being the only possible interpretation of "traffic".
on an operator for loss or injury to "horses, cattle or other animals", or to any "articles, goods or things" in the course of their carriage by the operator as a result of his "neglect or default". Where the operator had attempted to limit or exclude his liability for such loss in the contract for carriage, the exclusion clause would only operate where it was "just and reasonable". It would fall to the judge trying a case under the 1854 Act to determine whether the clause was just and reasonable.
The damages recoverable from the operator were capped at £50 for each horse, £15 for any cattle per head and £2 for each sheep or pig. It was however open to the customer to ask for the level of compensation to be raised by paying the excess of the increased amount.
Although this provision prevented routine exclusions of liability for gross negligence
, misconduct
or fraud
by operators, it did not disturb the protection afforded by section 1 of the Carriers Act 1830 (limitation of liability for the loss of certain goods above £10), or abridge the right to contact out of strict liability
.
This provision is one of the first attempts by Parliament to introduce legislative controls on unfair terms in contracts. It requires the court trying the case to decide whether the clause in question is "just and reasonable". There followed a flurry of cases on the question of what exactly constituted just and reasonable and from there developed the so-called doctrine of the "fair alternative". The definitive judgment on the question was delivered by Justice Blackburn in Peek v The North Staffordshire Railway Company (1863) where he said that:
In other words, a clause purporting to limit a railway company's liability would be considered invalid unless the customer was offered an inducement to agree to the clause in the shape of, for example, a reduction in the cost of freight.
(England and Wales), Her Majesty's Superior Courts (Ireland) or the Court of Session
(Scotland). The court could issue an injunction
(interdict in Scotland) and could order the payment of a fine not exceeding £200.
The 1854 Act proved, however, to be ineffectual in dealing with the problems posed by dominant railway companies. The requirement that clauses limiting liability should be just and reasonable was taken by the courts to mean that as long as the contract was made in a just and reasonable way, the result would be regarded as just and reasonable. To reach an agreement which would be considered as "just and reasonable", a carrier had just to offer a customer the option of purchasing insurance for negligence at a reduced cost. If the customer proceeded without this cover, he had no grounds for challenging the agreement. Judges considered that the availability of a fairly priced alternative to limited liability gave adequate protection against coercion on the part of the carrier.
A Royal Commission was established in 1865 to investigate the charges imposed by the railway industry. This was followed up by another Select Committee inquiry led by Lord Carlingford
, President of the Board of Trade, which proposed the creation of a "Railway and Canal Commission" to oversee the rail industry. The Committee noted that the Board of Trade was not "sufficiently judicial" to carry out this task, that the courts were insufficiently informed about the workings of the industry and that a Parliamentary Committee did not have the necessary permanence. The result was the Railway and Canal Traffic Act 1873 which created the Court of the Railway and Canal Commission to enforce the 1854 Act.
Common carrier
A common carrier in common-law countries is a person or company that transports goods or people for any person or company and that is responsible for any possible loss of the goods during transport...
s transporting goods and persons for the public benefit. Each railway company was now required to take all trade offered and to set and publish the same levels of fares to all in respect of any particular service.
The Act marked a milestone in English law
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
and has also served as the foundation of similar legislation in the United States.
Historical context
The introduction of the railways from the 1830s onwards led to new possibilities for the transport of goods which previously had not been commonly carried at all. This led to the courts affording a certain degree of latitude to railway carriers, permitting them to make agreements for the purpose of protecting themselves against the new risks and dangers of carriage inherent to the goods they were transporting. It was not long before the railway companies were exploiting this new freedom, taking advantage of their dominance of the transport sector to impose stringent and often oppressive terms of business which limited their exposure to risk. The courts felt compelled to give effect to these agreements to which the parties to the contract had deliberately agreed unless there was evidence of fraud or illegality.As Sir Alexander Cockburn
Sir Alexander Cockburn, 12th Baronet
Sir Alexander James Edmund Cockburn, 12th Baronet Q.C. was a Scottish lawyer, politician and judge. A notorious womaniser and socialite, as Lord Chief Justice he heard some of the leading causes célèbres of the 19th century.-Life:Cockburn was born in Alţâna, in what is now Romania and was then...
told the House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
in 1863:
The 1854 Act therefore sought to put an end to this practice and reverse the jurisprudence in favour of railway operators, returning to the pre-railway age position where the courts were in the habit of construing contracts between individuals and carriers to the disadvantage of the latter.
The Act was promoted by Viscount Cardwell
Edward Cardwell, 1st Viscount Cardwell
Edward Cardwell, 1st Viscount Cardwell PC, PC , FRS was a prominent British politician in the Peelite and Liberal parties during the middle of the 19th century...
, the President of the Board of Trade and chairman of the Select Committee responsible for the examination of the various amalgamation bills passing through Parliament. The Committee recommended that "Parliament should secure freedom and economy of transit from one end of the kingdom to the other and should compel railway companies to give the public the full advantage of convenient interchange from one railway system to another", and so came about the Railway and Canal Act 1854.
Receiving and forwarding traffic without delay
An obligation was placed on railway and canal companies "to afford all reasonable facilities for the receiving and forwarding, and delivering of traffic" without delay to and from their railways and canals. This provision sought to put an to the practice whereby an operator, taking advantage of the monopoly it enjoyed over the provision of services within its area, did not deal with all customers in a uniform manner, perhaps favouring some to the disadvantage of others.In a case decided in 1910, the Court of Appeal
Court of Appeal of England and Wales
The Court of Appeal of England and Wales is the second most senior court in the English legal system, with only the Supreme Court of the United Kingdom above it...
rejected a claim by Spillers
Spillers
Spillers Ltd is a defunct British company that owned flour milling operations in the United Kingdom, operated bakeries and also sold pet food.Winalot is a popular brand of dog food sold by Spillers.The name was first used in 1927 for dog biscuits...
that the Great Western Railway
Great Western Railway
The Great Western Railway was a British railway company that linked London with the south-west and west of England and most of Wales. It was founded in 1833, received its enabling Act of Parliament in 1835 and ran its first trains in 1838...
had breached this obligation when it refused to transport Spillers' loaded grain vans. According to Lord Justice Kennedy, the railway was only obliged to transport "merchandise", this being the only possible interpretation of "traffic".
No undue preference or prejudice
Railways and canal companies had to publish and set the same fares for any particular service, they could not discriminate between passengers or goods transporters by giving or offering "any undue or unreasonable preference or advantage" in respect of the services provided or, conversely, suffer prejudice by comparison with other users.Continuous and unobstructed services
Transport services were to be provided "at all times" and without any "obstruction" to passengers or goods. This reinforced the idea that the railways and canals formed a special and important category of business services which were to be made freely available and, insofar as possible, permanently available.Liability for loss and damage
Section 7 of the Act imposed liabilityLegal liability
Legal liability is the legal bound obligation to pay debts.* In law a person is said to be legally liable when they are financially and legally responsible for something. Legal liability concerns both civil law and criminal law. See Strict liability. Under English law, with the passing of the Theft...
on an operator for loss or injury to "horses, cattle or other animals", or to any "articles, goods or things" in the course of their carriage by the operator as a result of his "neglect or default". Where the operator had attempted to limit or exclude his liability for such loss in the contract for carriage, the exclusion clause would only operate where it was "just and reasonable". It would fall to the judge trying a case under the 1854 Act to determine whether the clause was just and reasonable.
The damages recoverable from the operator were capped at £50 for each horse, £15 for any cattle per head and £2 for each sheep or pig. It was however open to the customer to ask for the level of compensation to be raised by paying the excess of the increased amount.
Although this provision prevented routine exclusions of liability for gross negligence
Gross negligence
Gross negligence is a legal concept which means serious carelessness. Negligence is the opposite of diligence, or being careful. The standard of ordinary negligence is what conduct one expects from the proverbial "reasonable person"...
, misconduct
Misconduct
A misconduct is a legal term meaning a wrongful, improper, or unlawful conduct motivated by premeditated or intentional purpose or by obstinate indifference to the consequences of one's acts....
or fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
by operators, it did not disturb the protection afforded by section 1 of the Carriers Act 1830 (limitation of liability for the loss of certain goods above £10), or abridge the right to contact out of strict liability
Strict liability
In law, strict liability is a standard for liability which may exist in either a criminal or civil context. A rule specifying strict liability makes a person legally responsible for the damage and loss caused by his or her acts and omissions regardless of culpability...
.
This provision is one of the first attempts by Parliament to introduce legislative controls on unfair terms in contracts. It requires the court trying the case to decide whether the clause in question is "just and reasonable". There followed a flurry of cases on the question of what exactly constituted just and reasonable and from there developed the so-called doctrine of the "fair alternative". The definitive judgment on the question was delivered by Justice Blackburn in Peek v The North Staffordshire Railway Company (1863) where he said that:
In other words, a clause purporting to limit a railway company's liability would be considered invalid unless the customer was offered an inducement to agree to the clause in the shape of, for example, a reduction in the cost of freight.
Remedies for breach of the Act
Violation of the Act was a civil and not criminal matter and proceedings could be brought before the Court of Common PleasCourt of Common Pleas (England)
The Court of Common Pleas, or Common Bench, was a common law court in the English legal system that covered "common pleas"; actions between subject and subject, which did not concern the king. Created in the late 12th to early 13th century after splitting from the Exchequer of Pleas, the Common...
(England and Wales), Her Majesty's Superior Courts (Ireland) or the Court of Session
Court of Session
The Court of Session is the supreme civil court of Scotland, and constitutes part of the College of Justice. It sits in Parliament House in Edinburgh and is both a court of first instance and a court of appeal....
(Scotland). The court could issue an injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
(interdict in Scotland) and could order the payment of a fine not exceeding £200.
Legacy
Sir William Hodges, a contemporary railway law commentator, welcomed the Parliament's attempt to regulate the carrying of freight and passengers on railways. He believed that "[t]he necessity of a supervision of some kind over the traffic on our railways has long been acknowledged and it was felt that it would be an intolerable abuse if the Queens' subjects were deprived (by the railways) of the protection which the crown formerly afforded them when travelling over the ancient highways. Moreover, it may be assumed that the need for rigorous control and supervision is even more necessary than formerly when before the railways there could be no monopoly of the means of conveyance."The 1854 Act proved, however, to be ineffectual in dealing with the problems posed by dominant railway companies. The requirement that clauses limiting liability should be just and reasonable was taken by the courts to mean that as long as the contract was made in a just and reasonable way, the result would be regarded as just and reasonable. To reach an agreement which would be considered as "just and reasonable", a carrier had just to offer a customer the option of purchasing insurance for negligence at a reduced cost. If the customer proceeded without this cover, he had no grounds for challenging the agreement. Judges considered that the availability of a fairly priced alternative to limited liability gave adequate protection against coercion on the part of the carrier.
A Royal Commission was established in 1865 to investigate the charges imposed by the railway industry. This was followed up by another Select Committee inquiry led by Lord Carlingford
Chichester Parkinson-Fortescue, 1st Baron Carlingford
Chichester Samuel Parkinson-Fortescue, 2nd Baron Clermont and 1st Baron Carlingford KP, PC , known as Chichester Fortescue until 1863 and as Chichester Parkinson-Fortescue between 1863 and 1874, Lord Carlingford from 1874 to 1887 and Lord Clermont after 1887, was a British statesman and Liberal...
, President of the Board of Trade, which proposed the creation of a "Railway and Canal Commission" to oversee the rail industry. The Committee noted that the Board of Trade was not "sufficiently judicial" to carry out this task, that the courts were insufficiently informed about the workings of the industry and that a Parliamentary Committee did not have the necessary permanence. The result was the Railway and Canal Traffic Act 1873 which created the Court of the Railway and Canal Commission to enforce the 1854 Act.