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

In a borrowed-worker case, dual vicarious liability is legally possible. The inquiry concerns the relevant negligent act and asks which employer was entitled, and in theory obliged, to control the way the employee performed it. A formal transfer of the contract of employment, employee consent, and entire and absolute control are not determinative preconditions.

Where both the general and temporary employer share the relevant right and responsibility of control, each may be vicariously liable. Under the Civil Liability (Contribution) Act 1978, each is liable for the same damage and, absent personal fault or other contributing negligence, an equal contribution may be just and equitable.

A fitter’s mate, supplied as labour by the third defendants, negligently crawled through installed ducting while working on an air-conditioning project. The ducting damaged a sprinkler system and caused a costly flood at the claimant’s factory.

The first defendants had subcontracted ducting work to the second defendants, who obtained fitters and mates from the third defendants. The County Court held the third defendants alone vicariously liable. On the third defendants’ appeal, the court raised and received submissions on whether both the general and temporary employers could be vicariously liable for the same negligent employee.

1. Appeal allowed in part. The second and third defendants were each vicariously liable for the fitter’s mate’s negligence. The judge’s conclusion that the third defendants were liable remained justified if the law required an exclusive choice, but such a choice was not required.

2. Per May LJ, with whom Rix LJ agreed, the correct inquiry derived from Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd and Denham v Midland Employers’ Mutual Assurance Ltd was directed to the relevant negligent act. The court had to ask who was entitled, and in theory obliged, to give directions capable of preventing it. A supposed transfer of employment was a distracting device. Nor was entire and absolute control a necessary condition of vicarious liability.

3. Both employers had the relevant control. The fitter employed by the third defendants was the negligent worker’s immediate supervisor. The foreman acting for the second defendants supervised the roof-space work. Each could, in principle, have stopped the worker from taking the unsafe route through the ducting. There was no coherent reason why the existence of one right of control should exclude the other.

4. The historic assumption that only one employer could be vicariously liable was not supported by binding authority. The earlier statements against dual liability were either dicta, concerned a different statutory or factual issue, or had not considered the point. In a modern setting, dual liability accords with the functional and risk-allocation basis of vicarious liability.

5. Under sections 1(1) and 2 of the Civil Liability (Contribution) Act 1978, the second and third defendants were liable for the same damage. As neither was personally at fault and their relevant control was shared, the just and equitable contribution between them was 50 per cent each.

6. Rix LJ added that shared control is important but the doctrine may require refinement in later cases. The broader practical question is whether the worker was sufficiently part of the work, business or organisation of both employers to make shared liability just.

• Court of Appeal (Civil Division): allowed the third defendants’ appeal in part and held that the second and third defendants were both vicariously liable: [2005] EWCA Civ 1151 .

• Newcastle upon Tyne County Court: HH Judge Walton held the third defendants alone vicariously liable for the negligent fitter’s mate.