Railway and Canal Traffic Act 1854 - Legacy

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 "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, 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.