Joint Committee on Statutory Instruments Sixteenth Report


Memorandum from HM Treasury


1. The Joint Committee has asked for clarification of Regulation 3(1) of the above Statutory Instrument.

Subject matter

2. The Cross­Border Payments in Euro Regulations ("the Regulations"), laying down sanctions for breach of the EC Regulation of 19 December 2001 on Cross­border Payments in euro ("the EC Regulation") were laid before Parliament on 4 March 2003 and come into force on 25 March 2003.

3. Regulation 3 of the Regulations makes provision for a person to bring civil proceedings, subject to the defences and other incidents applying to actions for breach of statutory duty, where that person suffers loss as a result of an institution's contravention of Article 3 of the EC Regulation. The main purpose of Article 3 of the EC Regulation 2001 is to prohibit institutions from charging customers more for making cross­border payments in euro than they would be charged for making equivalent domestic payments in euro.

4. The Joint Committee on Statutory Instruments considered the Regulations at their meeting of 17 March and have requested an explanatory memorandum explaining the nature of the "defences and other incidents" referred to in Regulation 3(1) of the Regulations.


5. The effect of the use of the expression "defences and other incidents" is to incorporate the relevant common law principles that have been established in the case law governing actions for the breach of statutory duty.


6. The use of this term in Regulation 3(1) reflects that fact that, as a matter of common law, where a person has allegedly breached a statutory duty and civil proceedings are brought against him there are a number of defences open to him. The defences generally available against claims for damages for breach of statutory duty are:

  • any defences that the statute itself specifically provides for;
  • that the claimant's own negligence was the effective cause of the damage suffered;
  • contributory negligence;
  • that the claimant had voluntarily assumed the risk;
  • that the loss suffered by the claimant resulted from an act of an independent third party that the defendant could not reasonably have foreseen; and
  • acts of God.

1. Which of those defences are in fact available to the defendant in a particular case will depend on the duty breached and of course, the construction of the relevant statute.

Other Incidents

2. This term covers the other elements, which are not defences, of the cause of action for breach of statutory duty that are established as a matter of common law. Its use reflects the fact that a person must meet certain qualifying conditions in order to bring civil proceedings under either Regulation 3(1)(a) or (b) of the Regulations. A potential claimant will need to show firstly, that there has been a breach of a statutory obligation which, on a proper construction of that statute, was intended to be a grounds of civil liability to a class of person of whom he is one. Secondly, he will need to prove that the damage that he has suffered was of the kind that the statute was designed to protect against and thirdly, that the breach of the obligation materially contributed to that damage.


3. The Financial Secretary to the Treasury has approved this Memorandum.

March 2003

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