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CONTINGENT LIABILITY AND REAL ESTATE VALUES

A phrase which is being heard with increasing frequency on Anguilla (as well as on other British Dependent Territories, and indeed world wide) is contingent liability. Contingent liability, in its most basic sense, addresses the legal responsibility of one entity to any other entity which is under its legal control.

Recently, for example, in the United States parents were held legally responsible for the actions of their teenage son, who while living at home who had committed numerous criminal offences. The charge against the parents was based on the contention that their negligence in controlling their son led to the crimes the son committed and, therefore, the parents were responsible for the son’s acts—i.e. the parents were found by a court to have contingent liability.

Within the Anguillian context, contingent liability has been identified as the necessary rationale driving numerous British positions and concerns—from the Rifkin letter regarding reserve powers on the one hand, to the British control of international financial services on the other. As such, contingent liability is a concept which is of singular importance. Essentially, the resolution of the question as to the extent and degree of Britain’s contingent liability vis-a-vis Anguilla is central to the creation of a viable long term legal relationship between the two countries.

With regard to the Rifkin letter, a keynote speaker at a recent dinner raised the example of a maritime commission making recommendations for improving ferry safety which (for whatever reason) the local legislature decided not to adopt. If an accident occurred which might have been avoided if the recommendations had been adopted, what would Britain’s responsibility be with regard to that accident if Britain allowed the local legislature to ignore the commissions findings? Fair question.

With regard to international financial services, the forum at which the above example was posed, a similar question exists—i.e. what would be Britain’s legal liability if the local minister of finance or registrar of companies approved a project (or projects) which proved to be fraudulent? Given the parent to child analogy of Britain to the Dependent Territories, and given the United States recent court findings of parental liability, fair question.

However within the arena of real estate, the issue of contingent liability has not been frequently raised—but one wonders why, and wonders what the consequences might be if the concept was applied to land as well as to sea and finance.

For example, the airport. The Government of Anguilla has been trying for quite some time to relocate the airport from its existing location, with Brimegen being the generally preferred site of relocation since the early 1980’s. The existing airport has been a focus of concern with regard to the risk faced by all those who live, work, or travel in the George Hill / South Hill / Old Ta areas due to the fact that the current runway approach takes aircraft over all those high density regions. A catastrophic aircraft accident is an unwelcome event waiting to happen.

As such, what would Britain’s contingent liability be if such an aircraft accident occurred—not only with regard to the loss of life on the plane, but on the ground as well? Would the liability be any less than that posed by the aforementioned ferry example? Ignoring fatal accidents for less gruesome economics, what would Britain’s contingent liability be if she does not take the lead in relocating the airport and as a result of that inaction American Eagle is no longer able to service the Island due to its concern over its own liability?

Who would be responsible for the economic loss and real estate devaluation that would inevitably result from either an airline accident or an airline’s decision to terminate island service? Based on the notion of contingent liability and parental responsibility, it would appear to be Britain.

Therefore, given this notion of contingent liability, who then should pay for the costs of airport relocation—Anguilla as the dependent or Britain as the guarantor? Should, therefore, contingent liability replace all other concerns? Is it all a matter of who might be sued, who might be liable?

While there are no immediate answers, there are numerous immediate questions—and a realization that the notion of contingent liability is both an opportunity and an obligation for us all.

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