Viasystems v.Thermal Transfer
The Court of Appeal has found that, contrary to a long-held legal assumption, it is possible for two parties to be vicariously liable for the actions of the same, negligent employee. Dual liability will arise where an employee is lent or temporarily transferred to work for another and both employers are entitled and, in theory, obliged to control the employee's actions so as to prevent the negligent act
DMC Category Rating: Developed
This case note is based on an Article in the November 2005 Edition of the ‘(Re)insurance Bulletin’, published by the Insurance and Reinsurance teams at the international firm of lawyers, DLA Piper Rudnick Gray Cary. DLA Piper is an International Contributor to this website
On 28 July 1998, one such fitter, a Mr Megson, was working with his mate, Darren Strang, (both supplied by CAT Metalwork) installing ductwork in the roof space under the supervision of Mr Horsley, a self-employed fitter contracted to the second defendants. Mr Megson sent Darren Strang to fetch some fittings. But instead of returning by a sensible route, Darren crawled through some sections of ducting already in place, causing them to come into contact with the sprinkler system, which resulted in an extensive flood.
It was not in dispute that Viasystems was entitled to recover from Thermal Transfer under its contract. But Viasystems also claimed against the second and third defendants in negligence. The issue was whether it was the second defendant or the third defendant that was vicariously liable to Viasystems for Darren's actions.
Lent, borrowed or transferred employees
The decision emphasised that the issue would depend on the facts of each case. The inquiry, however, should concentrate on the relevant negligent act and then ask whose responsibility it was to prevent it. The issue did not depend on who, in strict legal terms, employed the individual, but it was for the original employer to show that the vicarious responsibility was no longer his, and this burden would normally be a heavy one.
In the Viasystems case, the judge at first instance found that the third defendants remained vicariously liable for Darren's actions. Mr Horsley had not been in entire and absolute control of Darren Strang and Darren's employment had not been transferred. The third defendants appealed.
Which of them was entitled and (assuming they had the opportunity) obliged, to control Darren so as to stop him crawling through the duct? In the Court of Appeal's view, the answer was both. This presupposed that it was possible to find two parties jointly vicariously liable.
The idea that dual liability could not exist in English law is based on an assumption that goes back to the early 19th century, starting with a number of so-called "carriage cases" where carriages and their drivers were lent (with or without horses) by their employer to another. The assumption has not been questioned by an English court for 180 years but, in most cases, the factual circumstances were such that the issue simply never arose. Consequently, there was no authority binding on the Court of Appeal to say that dual vicarious liability was a legal impossibility.
One legal red herring (irrelevance) was the idea that there had to be a transfer of the employment before the temporary employer could be held vicariously liable. But this was not actually the case. Although the nature of the employment was material, it was not necessary to show that the employment had formally been transferred from one to the other.
It followed that, if two employers were both vicariously liable for the same negligent action of the employee, contributions between them should be on a 50/50 basis.
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