Negligence – Vicarious liability – Independent contractor – Claimants undertaking to construct recycling plant for council – First appellant contractor engaged to design and build plant – Contractor subcontracting part of works – Fire breaking out during works owing to actions of subcontractors – Whether defendants vicariously liable for negligence of subcontractors as borrowed employees – Whether liable on ground that subcontractors’ activities ultra-hazardous
The second respondent entered into a PFI contract with the council to collect, recycle and dispose of the council’s domestic waste, which necessitated the construction of a recycling plant. By a back-to-back contract, the first respondent associated company undertook to discharge the second respondent’s obligations in respect of the construction of the plant. The design and build of the plant was contracted out to the main contractor H, which in turn engaged the appellant to supply a key part of the plant, namely a ball mill comprising a large rotating drum containing steel balls that broke down the waste into smaller material for separating. H was generally responsible for site safety and employed a supervisor on-site to oversee the works.
Following the installation of the ball mill, modifications were carried out, which necessitated further welding works. Those works were carried out over a weekend by employees of a subcontractor, P, which was engaged by the appellant and which supervised on its behalf. During the course of the works, a fire broke out, causing substantial damage to parts of the plant. The respondents brought an action against the contractor (MEH) and the appellant for breach of contract and negligence. In those proceedings, it was held that the appellant was liable for negligence on the part of P’s employees. The judge reached that conclusion on the grounds that: (i) the welders had effectively been acting as employees of the appellant, rather than of P, when carrying out the welding in the ball mill, since the appellant’s supervision indicated that it had been entitled to control the manner in which they carried out their work, particularly as regards precautions against the risk of fire; and (ii) carrying out welding works in a location in which there was combustible material was an ultra-hazardous activity, inherently dangerous in nature, in respect of which there was a non-delegable duty of care in tort. The appellant appealed.
Held: The appeal was allowed.
(1) The respondents could not establish that the appellant was vicariously liable for the welders as “borrowed employees”. It was only where the agreement between the general employer and the hirer was to be taken, in all the circumstances, as conferring upon the hirer the power to control the manner of execution of the work that a transfer of vicarious liability could occur: Mersey Docks & Harbour Board v Coggins & Griffith (Liverpool) Ltd [1947] AC 1 applied. Moreover, the burden of showing a transfer or assumption of liability to or by the hirer was a heavy one and exceptional facts were required for a contractor to be vicariously liable for the negligence of a subcontractor. In the instant case, it was relevant that P’s men were skilled welders using their own equipment, with their own foreman on site to supervise them, and that the precautions to be taken when welding should have been known to them. They had not become part of the business or undertaking of the appellant since their work was of a temporary nature: Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151; [2006] QB 510 distinguished. Safety precautions generally were the responsibility of H, whose supervisor could decide if and when the work would be carried out and who had the power to stop the work if safety so required. There was nothing to indicate that the appellant was to have control over P’s employees. Supervision was not the same as control, and the entitlement of the appellant to control P’s employees had to be established rather than assumed. The relevant agreement was no more than a contract to provide the services of P’s employees and could not authorise an assumption of the right of control over them: Hawley v Luminar Leisure Ltd [2006] EWCA Civ 18; [2006] IRLR 817 distinguished.
(2) It was unsatisfactory to apply special rules of absolute liability to extra-hazardous acts while excluding precautionary measures from consideration. It was irrational to take into account factors that increased the hazard, such as the proximity of combustible materials to an area in which welding was carried out, without taking into account the known measures that could and should be taken to reduce or remove that hazard. The “ultra-hazardous activity” basis of liability was anomalous and should be kept as narrow as possible, with its application confined to activities that were exceptionally dangerous whatever precautions were taken: Honeywil & Stein Ltd v Larkin Brothers Ltd [1934] 1 KB 191 and Read v J Lyons & Co Ltd [1947] AC 156 considered. In the instant case, the activity to be assessed was simply welding, not welding in the vicinity of unwetted combustible material; welding as such was not ultra-hazardous. The judge had wrongly taken into account factors outside the appellant’s responsibility that had rendered that activity hazardous, while leaving out of account the factors that would and should have rendered it safe.
David Allen QC (instructed by Ince & Co) appeared for the appellant; Benedict Patten (instructed by Herbert Smith LLP) appeared for the respondents.
Sally Dobson, barrister
