Vicarious liability is the obligation which falls on one person, for example an employer, as a result of the actions or omissions of another, for example an employee.
The Court of Appeal has ruled that liability for the actions of an ‘employee’ can fall on more than one ‘employer’, where both exercise control over the worker in question, even though this involves an employer who is not technically the employer of the employee responsible.
Thermal Transfer (Northern) Ltd. had the job of installing air conditioning in a factory. The company subcontracted work to S & P Darwell Ltd., which in turn subcontracted the provision of fitters and fitters’ mates to a third firm, CAT Metalwork. One of the fitters’ mates negligently set off a sprinkler system which resulted in flood damage to the factory.
Newcastle-upon-Tyne County Court found CAT Metalwork solely vicariously liable for the actions of its employee. CAT Metalwork appealed to the Court of Appeal.
The Court of Appeal found that the decision of the County Court had been based on the long-standing assumption that only one employer could in law be held vicariously liable for an employee’s negligence. However, the Court found that the assumption that dual vicarious liability is not possible could no longer be sustained. The possibility of dual liability is fairer and will also enable cases to be settled more easily.
When the Court finds that two employers share vicarious liability for the actions of an employee, their liability will be equal. Whether there will be a finding of dual vicarious liability depends on all the circumstances, particularly on which firm had control of the employee and whether, for practical purposes, the work made him or her part of the work, business or organisation of both employers.
This case should sound a warning to firms which supply or make use of ‘borrowed’ employees or subcontractors to make sure that their contractual and/or insurance arrangements will protect them should a problem of this nature arise. Contact us for advice on these issues.