In a recent decision delivered by Murray J in Barlow & Ors -v- The Minister for Communications, Marine & Natural Resources & Ors [2025] IESC 14 (the Decision), the Supreme Court (the Court) clarified the circumstances in which public authorities may be found to owe a duty of care and therefore ultimately be held liable for negligence in the exercise of their statutory powers. This judgment provides important guidance on the intersection of public law functions and private law liability.
This case involved several plaintiffs (the Plaintiffs) who claimed significant financial losses on investments due to the alleged mismanagement of mussel seed resources by state bodies (the State/State Defendants). The Plaintiffs’ claims were dismissed in the lower courts. The Court allowed their appeal, finding that the State Defendants had assumed a responsibility towards the Plaintiffs through their close dealings with them. However, the Court held that the standard of care owed was aligned with the standard of unreasonableness at administrative law such that liability in negligence could only be imposed if the decisions of the State Defendants were found to be irrational. The Court remitted the case to the High Court to determine whether the State’s actions were in fact ‘irrational’.
Background
Between 2002 and 2004, the Plaintiffs invested €14.25 million in four new mussel dredging vessels, encouraged by the State’s promotion of the mussel fishing sector, and with the assistance of the State Defendants who helped them secure European Union grant aid to cover the remaining cost.
By the time the vessels were operational in 2005, the yield from the mussel seed fishery had significantly dropped, and in 2006, it collapsed entirely. The Plaintiffs attributed this collapse to the State’s mismanagement, including the issuance of permissions to Northern Ireland vessels to collect mussel seed in Irish waters, which they claimed led to overfishing and depletion of the resource. In 2016, the Court declared the grant of such permissions contrary to Article 10 of the Constitution.
The Plaintiffs sought damages on multiple grounds. The High Court dismissed these claims, and the Court of Appeal upheld that decision. The Court granted leave to appeal on the issue of whether the State Defendants were liable in negligence for the mismanagement of the mussel seed resource.
The Legal Principles
In examining whether the State Defendants owed a duty of care to the Plaintiffs and whether the State Defendants’ actions could amount to negligence, the Court considered a number of key legal principles.
Duty of Care
The Court reaffirmed that there is no rule that a public body enjoys immunity from liability in negligence in respect of its exercise of statutory discretionary powers.
It further noted that public authorities can owe a duty of care similarly to private bodies, subject to statutory provisions and/or public policy considerations. On this point the Court observed: “In cases in which there is a clear, simple and direct analogy to be drawn between the activities of private actors and of public authorities, the public authority is liable in negligence for those activities in the same way as a private actor.”
On the other hand, there will always be certain actions of the State which do not attract liability in negligence because they have no plausible analogue in private law and the Court noted: “A member of the public who stands to benefit from the exercise of a discretionary statutory power in their favour cannot, without considerably more, point to any remotely similar private law relationship in which the common law of negligence would attach a duty of care” (emphasis added).
Once a duty of care is found to exist by private sector analogy, it is then also still necessary to consider the broader policy implications in terms of whether it is just and reasonable to recognise a duty of care. For example, citing precedent emphasising that no duty of care will be implied if its imposition might inhibit the exercise of statutory powers or where it might require a public body to act in a manner prohibited by statute.
Assumption of Responsibility and Economic Loss
The Plaintiffs sought to argue that the State Defendants had tacitly promised that if the mussel dredging vessels investments were made, the State would subsequently take reasonable care in the allocation process and management of the mussel seed resource. On this point, the Court reaffirmed that a duty of care may be found to exist where a person promises to exercise skill and care towards another who may reasonably rely on such undertaking to their detriment. Here, the Court applied the test for the recovery of pure economic loss in negligence in private law, noting that the relationship must be close, transactional, and akin to contract, with the State being aware of the reliance and able to disclaim liability if it so chose. Here, the Court was satisfied that the State Defendants had assumed a responsibility towards the Plaintiffs, as a consequence of which they owed a duty of care, which the Court characterised as a duty to exercise care in the allocation of the mussel seed resource in accordance with statute.
The Standard of Care
The Court then turned to consider what standard of care public authorities should be held to in negligence claims arising in relation to the exercise of statutory powers.
The Court clarified that the standard of care is one of reasonableness. Where the negligence alleged is in respect of decisions made by a public authority acting upon a statutory power, the standard of care is assessed by reference to whether the action was outside the range of choices that a reasonable body charged with the activity concerned could have made. This should be viewed as equivalent to the standard of unreasonableness as developed in administrative law.
Availability of Judicial Review
One of the grounds relied on by the High Court in refusing to impose a duty of care upon the State Defendants was the availability of judicial review as a remedy. In considering whether a duty of care could be negated by the availability of judicial review, the Court highlighted the distinct functions of private law and public law and determined that the availability of judicial review as a potential form of relief does not preclude a claim in negligence.
Decision
Ultimately, the Court held that the State had assumed a responsibility towards the Plaintiffs, creating a duty of care in the management of the mussel seed resource. It found that the State Defendants’ actions in encouraging the Plaintiffs to invest in the mussel fishing sector, combined with the State’s control over the resource, created a relationship of proximity and reliance. The Plaintiffs had made significant investments based on the state’s assurances and were dependent on the State’s management of the resource to recoup their investments.
The Court clarified that the standard of care owed by the State was aligned with administrative law principles. This meant that the Plaintiffs will ultimately have to prove that the State’s actions were unreasonable. The Court also emphasised that the State’s decisions in managing the resource involved policy choices and discretionary powers, which should not be easily second-guessed and to which the courts must have deference in applying the standard.
The Court remitted the case to the High Court to determine whether the State’s actions in allocating the mussel seed resource were irrational and whether the plaintiffs suffered investment losses as a result. Notably, the Court highlighted that grant offers to some Plaintiffs might affect the duty of care, and that the Plaintiffs’ knowledge of the State’s arrangements with Northern Ireland vessels could impact their claims.
Comment
The Decision provides helpful clarification on the circumstances in which the State may be found liable in negligence for economic loss arising from the exercise of statutory powers, particularly where it has actively encouraged private investment.
Even when a public authority has properly exercised a statutory power, the Decision confirms that a duty of care may be owed and a claim in negligence may still be brought. This Decision has therefore clarified, and arguably slightly expanded the law of negligence, and the tortious remedies available against public bodies over and above the traditional remedy of misfeasance in a public office. On the other hand, in holding that the standard of care owed by public bodies is aligned with the stand of unreasonableness in administrative law, the Court has underlined the high threshold for proving negligence against a State body.
Finally, this Decision clarifies that the availability of judicial review does not preclude a claim in negligence, making clear that the remedies and purposes of public law and private law are distinct. Invalidity in public law is not a prerequisite for liability in tort.
For more information on this case or the scope of public law negligence more generally please contact Hannah Shaw, Senior Associate, Rebecca Martin, Senior Associate, Sinéad Hayes, Knowledge Consultant or your usual ALG Disputes team contact.
With thanks to Molly Hyland, Trainee, for her contribution to this article.
