Cases that helped shape software liability
In 1842, Winterbottom, a contracted driver of a stagecoach contracted to deliver mail, was injured when the stagecoach collapsed. Winterbottom sued Wright, who was contracted to maintain the stagecoach by the same organization that had contracted Winterbottom to drive the stagecoach.
Winterbottom claimed that Wright had been negligent in his failure to properly maintain the stagecoach, which led to Winterbottom's injury. The court sided with the defendant because Winterbottom and Wright did not have "privity of contract." Thus, Wright had no duty of care toward Winterbottom.
This holding is orthogonal to the dominant approach today, which provides that a person may be liable for their negligence without a contract between the parties. However, for consumers of defective products in 19th century England, the focus was on allocating liability between parties to a specific contract In this case, because Winterbottom had not entered directly into a contract with Wright, Wright was not liable for the harm caused to Winterbottom.
In 1916, Macpherson, an owner of a Buick Runabout, was injured when one of the car's wheels collapsed. Although the wheel was not manufactured by Buick, they had installed the part purchased from their supplier. The court decided that Buick was liable in this instance, rejecting the holding in Winterbottom v. Wright.
The ruling is considered a precursor to the modern product liability framework. The reasoning here was that if there is a reasonable basis for concluding that a product could put someone in harm, then extra steps must be taken to ensure the safety of anyone who will come into contact with the product. This should hold regardless of the contract between the parties in question. Put another way, in this case, the rule put forth is that if you build a product with parts from other suppliers, you are responsible for how those parts perform in the new product.
In 1928, Donaghue joined a friend at a local cafe. She ordered a Scotsman Ice Cream Float, which consists of ice cream topped with ginger beer from the bottler, D. Stevenson, Glen Lane, Paisley.
When the remaining ginger beer was poured into her glass, she saw a decomposed snail. She became ill, which included a trip to emergency service and a diagnosis of severe gastroenteritis and shock.
Up to this point, for a party to be held liable for harm caused, case law in Scotland required privity of contract or either intentional or unintentional trespass. Trespass is someone doing something to someone else either intentionally, like physical assault, or unintentionally, where harm transpired, but not based on a direct motive like operating a car recklessly.
In this case, neither intentional nor unintentional trespass was present. Under prior case law, Donahue would not have a case. However, the court eventually sided with Donahue on the principle of negligence. This decision set a precedent for case law in Scotland and provided a foundation for negligence in common law worldwide.
Today we would more commonly refer to negligence based on an obligation of duty of care, which informs most modern views on the importance of food safety. In harvesting, preparing, and delivering food, there is an expectation of care placed upon those involved in those operations. Here again, we see this to be true regardless of any contract or agreement that might be in place.
In 1947, a barge, the Anna C, was leased to the Pennsylvania Railroad Company by Conners Marine Company and was loaded with flour owned by the United States. On the same day, the Caroll Towing Co. was contracted to remove a different barge moored to the same pier as the Anna C and several other barges. In removing the other barge, the lines to the Anna C became disconnected. This resulted in the Anna C floating into other barges and eventually sinking. As a result, the United States initiated an indemnity lawsuit against the Caroll Towing Company.
It's important to point out the complicated nature of this case, as many parties were involved. This included contracts between the Pennsylvania Railroad company and the United States, as well as contracts between Pennsylvania Railroad, Conners Marine, and Carroll Towing. Ultimately, liability was shared across these companies (including liability between them) and was decided in a court of appeals. Specifically, Carroll Towing was responsible for ensuring barges they interacted with that day were safe and secure. In this duty, they failed.
The complexity of this case led to how we more commonly view negligence today, establishing a formula for a standard of care. Judge Learned Hand wrote the following:
"Since there are occasions when every vessel will break from her moorings, and since, if she does, she becomes a menace to those about her; the owner's duty, as in other similar situations, to provide against resulting injuries is a function of three variables: (1) The probability that she will break away; (2) the gravity of the resulting injury, if she does; (3) the burden of adequate precautions. Possibly it serves to bring this notion into relief to state it in algebraic terms: if the probability be called P; the injury, L; and the burden, B; liability depends upon whether B is less than L multiplied by P: i.e., whether B < PL."
Put another way, liability exists when B < PL. In this case, placing responsible individuals aboard barges that had been interacted with during the day would have represented a burden that was less than the cost of damage to the other vessels and the cargo times the likelihood something bad would happen.
There's much more to each of these cases and additional cases that have helped inform and shape modern liability. However, what should start to stand out is that organizations have a growing responsibility. This responsibility includes a duty of care (expectation to act responsibly) and a standard of care (the level of responsibility). In the next section, we'll tie this legal history with the increasing expectations and shifting liability due to cybersecurity concerns for software organizations.
