Construction contract — Negligence by appellant’s employee — Whether more than one contractor having control over employee — Whether dual vicarious liability a legal possibility — Appeal allowed in part
The appellant was engaged by the respondent’s subcontractor to provide workmen to install air-conditioning in the respondent’s factory. The subcontractor engaged a self-employed fitter to supervise the appellant’s staff. Owing to the negligence of one of the appellant’s workmen, a flood occurred, which caused extensive damage. The respondent claimed damages against the main contractor, the subcontractor and the appellant. The main contractor accepted contractual liability and sought an indemnity against either of the other two parties.
The judge at first instance decided that vicarious liability for the negligence of the appellant’s workman lay with the appellant because the contractual arrangements did not suggest that his employment had been transferred to the subcontractor.
Appealing that decision, the appellant argued that vicarious liability should lie with the subcontractor since it controlled the working methods of the negligent workman at the relevant time.
Held: The appeal was allowed in part.
1. Dual vicarious liability was a legal possibility. The long-standing assumption that such a finding was not legally permissible was not technically supported by any authority that could bind the court: Mersey Docks and Harbour Board v Coggins
& Griffith (Liverpool) Ltd [1947] AC 1 and Oceanic Crest Shipping Co v Pilbara
Harbour Services Pty Ltd [1986] HCA 34 considered. The assumption was based upon the notion that, in order to find a temporary employer vicariously liable, there had to have been a transfer of employment. In a modern context, there was little intrinsic sense in, or justification for, such an assumption. The nature and incidence of the employee’s employment was material but was not the determinative matter in all cases. Although cases of dual control would be rare, in some cases it would be possible to find that each of the two “employers” was entitled, and in theory obliged, to control the employee’s actions so as to prevent negligence. That being so in the instant case, the appellant and the subcontractor were both vicariously liable for the workman’s negligence.
2. Thus, the appellant and the subcontractor were severally liable to the respondent in respect of the same damage, so that each might be able to recover a contribution from the other under section 1(1) of the Civil Liability (Contribution) Act 1978. On a just and equitable division of contributory responsibility, each should contribute 50% of its several liability to the respondent.
Per May LJ: Vicarious liability was a legal device designed to redistribute the incidence of loss from an employee who was personally at fault to a solvent, insured employer that was not personally at fault. For the purpose of establishing vicarious liability, the court did not seek to apportion blame to the employer. On that basis, it was probable that, in a finding of dual vicarious liability, it would be a logical necessity to apportion the loss on a strictly equal basis.
Per Rix LJ: The point at which each employer’s contribution is determined is the point at which the court makes a finding of dual vicarious liability. Assuming that neither employer contributed to the loss by reason of its own or other employees’ actions, the responsibility and financial liability of each would be equal at that point.
Patrick Field QC (instructed by James Chapman & Co, of Newcastle upon Tyne) appeared for the appellant; Andrew Prynne QC and Toby Riley-Smith (instructed by Watson Burton, of Manchester) appeared for the respondent.
Sally Dobson, barrister
