Viasystems (Tyneside) Ltd. v Thermal Transfer (Northern) Ltd & Ors

The claim arose from damage caused by the negligent act of a fitter’s mate working on subcontracted ducting at the claimant’s premises. The County Court found the third defendants (the labour hirer) vicariously liable for the employee’s negligence and the third defendants appealed. The Court of Appeal examined whether vicarious liability could rest on both the temporary employer (hirer) and the general employer (labour supplier) and adjourned to receive further submissions on that point. The central question before the court was whether the legal doctrine permits dual vicarious liability and, if so, on what basis it should be imposed; the court also considered the consequences for statutory contribution between co-liable parties under the Civil Liability (Contribution) Act 1978.

(1) Overall disposition: the Court of Appeal allowed the appeal in part and held that both the second defendants and the third defendants were vicariously liable for the negligence of the employee; as between them contribution was to be equal.

(2) Legal principles and approach:

• Leading authority remains [1947] AC 1 (Mersey Docks), but its tests are fact-sensitive and not exhaustive; many considerations bear on whether vicarious responsibility lies with the general or the temporary employer.
• The classic device of treating a servant as "transferred" for the time being to a temporary employer is a useful descriptive device but not determinative; consent to transfer is not necessary and the inquiry should focus on who was entitled, and in theory obliged, to control the negligent act. The court therefore rejects the view that "entire and absolute control" is a necessary precondition in all cases (relying on [1955] 2 QB 437 (Denham)).
• Where the practical right and obligation to control the particular negligent act is shared between two employers, it is legally permissible for both to be vicariously liable. The historical assumption that only one employer may be liable is not an absolute rule preventing dual liability.

(3) Application to the facts:

1. The negligent act was the employee crawling through ducting. On the judge’s findings, neither the immediate foreman on site nor the fitter in charge had an actual opportunity to prevent the momentary act and neither was personally negligent.
2. Both the temporary employer’s representative (the foreman on site) and the general employer’s fitter were, for the relevant purposes, entitled and theoretically obliged to control the employee’s conduct; control was therefore shared.
3. Accordingly, both the second and third defendants were vicariously liable.

(4) Contribution: the court held that, pursuant to Civil Liability (Contribution) Act 1978 s.1 and s.2, where dual vicarious liability arises and neither employer is personally at fault, the just and equitable apportionment between the employers in this case is equal (50% each).

(5) Orders: the appeal was allowed in part; each of the second and third defendants was held vicariously liable to the claimants and, inter se, contribution was to be equal. (Costs and detailed ancillary orders were dealt with as recorded in the court transcript.)

• Court of Appeal (Civil Division): Allowed the appeal in part, holding that both the second and third defendants were vicariously liable and ordering equal contribution between them ([2005] EWCA Civ 1151).
• County Court (Newcastle-upon-Tyne): HH Judge Walton found the third defendants vicariously liable (decision under appeal: NE 203485).