Biffa Waste Services Ltd & Anor v Maschinenfabrik Ernst Hese GmbH & Ors

A contractor is vicariously liable for a borrowed employee only where the circumstances justify treating it as responsible for the relevant negligent act. The inquiry focuses on the right to control how the work is performed. Supervision of skilled workers, or control over what work is required, does not suffice. The burden of establishing transferred or dual responsibility is heavy.

The rule imposing liability for an independent contractor’s extra-hazardous operations is anomalous and must remain exceptional. It applies only where an activity is exceptionally dangerous despite appropriate precautions. The court assesses the authorised activity itself, including precautions intrinsic to its proper performance. It does not treat an ordinarily safe activity as extra-hazardous merely because an independent contractor negligently omitted those precautions.

A fire damaged a waste recycling plant while employees of Pickfords, an independent welding contractor engaged by Outokumpu Wenmec AB, were welding inside a ball mill. The fire resulted from inadequate fire precautions. Pickfords and the main contractor, Hese Umwelt GmbH, were negligent, but Outokumpu itself was not found negligent.

Ramsey J, sitting in the Technology and Construction Court, nevertheless held Outokumpu liable for damages to be assessed: [2008] EWHC 6 (TCC). He found both that the welders had become Outokumpu’s borrowed employees and that the welding was an extra-hazardous operation attracting a non-delegable duty.

Outokumpu appealed on both grounds. The central questions were whether it had acquired sufficient control or responsibility for the welders to incur vicarious liability, and whether the independent-contractor rule concerning extra-hazardous activities applied to the welding operation.

1. The appeal was allowed and the claim against Outokumpu was dismissed. The exceptional requirements for liability on either asserted basis were absent.

2. For borrowed-employee liability, the inquiry concentrates on the relevant negligent act and on who was entitled to direct how the work should be performed. Control of the task is insufficient; the relevant authority concerns the method of performance. Practical and structural considerations, including the worker’s integration into each undertaking, may also support dual responsibility.

   Pickfords supplied skilled welders, their equipment and their own foreman. Hese Umwelt controlled site safety, issued the hot-work permit and could stop the work. Millteam’s ability to supervise the welders did not amount to a right to control their welding or fire precautions. Moreover, Outokumpu had contracted for two welders without knowing that four were supplied. The heavy burden of establishing an exceptional transfer or assumption of responsibility was not discharged.

3. The doctrine in Honeywill v Larkin [1934] 1 KB 191, although binding, was anomalous, uncertain and difficult to reconcile with Read v J Lyons & Co Ltd [1947] AC 156. Its application should therefore be kept as narrow as possible. It applies only to activities that are exceptionally dangerous whatever precautions are taken.

4. The relevant activity was welding in the ball mill, not welding beside combustible material which had negligently been left unprotected and unwetted. The assessment had to include the precautions intrinsic to proper welding practice. Welding as such was not extra-hazardous. The trial judge had erred by including circumstances which made the work hazardous while excluding the precautions that should have made it safe.

   Outokumpu was therefore not liable without fault for negligence committed by skilled employees of an independent contractor on a site where another company bore general responsibility for safety.

1. Court of Appeal (Civil Division): The appeal was allowed. The findings of borrowed-employee vicarious liability and liability for extra-hazardous operations were reversed, and the claim against Outokumpu was dismissed: [2008] EWCA Civ 1257.

2. Technology and Construction Court: Ramsey J entered judgment for the claimants against Outokumpu for damages to be assessed, holding it liable both for the welders as borrowed employees and under the rule concerning extra-hazardous operations: [2008] EWHC 6 (TCC).