In applying the third stage of the Caparo test, of fair, just and reasonable, the courts take certain policy factors into account. Policy factors which may influence the court include such issues as:
Loss allocation:-
Who can afford to bear the loss?
Which of the parties have insurance/ is the situation one subject to compulsory insurance?
Is the defendant a publicly funded body?
The floodgates:-
Will imposing liability lead to a high volume of new claims?
What effect would this have on cost of insurance or its availability?
Will the courts be able to cope with the volume of cases?
The practical effects of imposing liability
Will the imposition of a duty of care act as a deterrent or raise standards?
Will imposing a duty have an adverse effect on decision making?
Will it effect the allocation of resources away from necessities?
These issues often arise in the context of publicly funded bodies and in particular in relation to the police, the CPS, Local authorities and emergency services.
