A common sense court ruling on vicarious liability

Biffa Waste Services and Biffa Leicester v Maschinenfabrik Ernst Hese GMBH, Outokumpu Technology Wenmec AB and others

 (Court of Appeal - 12 November 2008)

The appellant contractor appealed against a decision that it was vicariously liable for the negligence of a subcontractor that had caused or materially contributed to a fire at a recycling plant.

The claim related to a ball mill, which is a large rotating drum containing steel balls that are intended to break down waste into smaller materials that can be separated. The contractor was asked by the main contractor to supply and design the ball mill. The contractor, based in Norway with no presence at the site, subcontracted the manufacture and installation of the ball mill; welding work became necessary and this was carried out by the subcontractor, supervised by another party at the contractor's request.

A fire occurred during the course of the welding work and the court at first instance held that the contractor was liable for the subcontractor's negligence as the welders had become the contractor's employees when performing the welding work - applying the principle regarding ultra hazardous activities in Honeywill and Stein v Larkin (1934).

Reversing the decision, the Court of Appeal held that, although the contractor supervised the subcontractor's work, it did not control the subcontractor's work. The proper test for vicarious liability is whether or not the contractor had authority to control the manner in which the subcontractor executed the work. In this case, the subcontractor's men were skilled workers and the contractor did not exercise control over the way that they welded. The subcontractor's workers did not become part of the contractor's business, their work being temporary.

The Court of Appeal then looked at the contractor's liability for ultra hazardous work and held that the contractor, based in Norway, should not be vicariously liable for welding work carried out by skilled welders employed by an independent subcontractor.

The court stressed that the basis for vicarious liability of the type in question was "truly exceptional" and could only be applied to activities that were exceptionally dangerous whatever precautions were taken.

Comment

This case is important as it offers a fair and common sense approach. There are many instances in the construction industry when an architect, clerk of works or contractor supervises the work of a contractor/subcontractor but that does not mean they exercise control over the work/workers for the purposes of vicarious liability. This is a sensible decision which clarifies that Honeywill will only apply to activities which are exceptionally dangerous whatever precautions are taken. - Suzanne Weight, BLM London.

The following law report contributed by specialist insurance practice Berrymans Lace Mawer first appeared in Post Magazine on 5 February 2009.

Disclaimer: The law report contains information of general interest about current legal issues, it does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. Specialist legal advice should always be sought in any particular case.