Landmark liability ruling lands employers in dock

Employers could now be liable for the negligence or misbehaviour of another firm’s staff, following a ruling in the Court of Appeal which overturns centuries of legal assumption.

In the case of Viasystems v Thermal Transfer, S & P Darwell and CAT Metalwork Services, the court ruled that it was possible for two employers to be vicariously liable where an individual had been negligent while temporarily working for another company.

The court ruled that both S&P Darwell (the contractor) and CAT Metalwork Services (the subcontractor), were jointly liable for the flooding caused to a factory by CAT’s employee.

The two ’employers’ were both entitled to exercise control over the relevant act, and so were both vicariously liable for the employee’s negligence, the court ruled. It also said the measure of control was equal, so the employers should each contribute half of the damages awarded.

The ruling could have implications for many industries, including IT and engineering, according to Geraldine Elliott, partner at law firm Reynolds Porter Chamberlain.

“This is a significant decision. Subcontracting is a practice used in a wide range of different industry sectors,” she said.
“In the past, subcontractors bore the brunt of the blame for mistakes made by their employees, but contractors themselves now face being held to account for the negligence of their subcontractors.”

Background to the case

The dispute centred on who should be held responsible for the actions of Darren Strang, a fitter’s mate whose negligence caused extensive and expensive flooding at a factory owned by Viasystems.

Strang worked for CAT Metalwork Services, which provides fitters and fitters’ mates on a labour-only basis. His services, along with those of a fitter, had been secured by S&P Darwell, which was installing air-conditioning ducting work at the factory. S&P Darwell had been subcontracted by Thermal Transfer.

The key issue in the case was who was overseeing and in control of Strang when he made the costly mistake of crawling through the ducting, thus fracturing the sprinkler system. In particular, was it CAT Metalwork Services’ fitter or was it Darwell’s fitter, who was working with the fitter and his mate?

For 200 years, English law has never allowed for ‘dual’ vicarious liability. But, the two appeal court judges broke with this tradition and said that the only sensible conclusion was that both companies’ fitters were entitled to – and in theory obliged to – stop Strang crawling through the duct.

They acknowledged that the centuries-old legal assumption that only one employer could be vicariously liable should not “lightly be brushed aside”. But, said Lord Justice May: “In my judgment, dual vicarious liability should be a legal possibility.”

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