Smith v Skanska Construction Services Ltd

Vicarious liability for negligent driving depends on the driver having the principal’s authority and acting for the principal’s purposes. An employee or agent who knowingly acts outside an internal limitation on authority cannot rely on that limitation to establish a claim against the principal. Such limitations may still be ineffective against innocent third parties. Post-accident insurance claims do not, without clear evidence of informed adoption, ratify unauthorised acts or create retrospective authority. The doctrine of approbation and reprobation is principally procedural and requires more than equivocal conduct outside proceedings.

The claimant, an employee seconded to a mining project in Thailand, was seriously injured when a company car left the road. The driver was the son of another employee and was not employed by the defendant. The claimant alleged that the site manager had authorised him to take the car and authorised the driver to drive it, making the defendant vicariously liable.

The action was a retrial following Smith v Kvaerner Cementation Foundation Ltd (Bar Council intervening) [2006] EWCA Civ 242. The issues included authority, insurance claims, ratification, approbation and reprobation, and contributory negligence.

1. The court found that Paul Andrew was driving and that his negligent driving caused the accident. The claimant took the Toyota 2L without the site manager’s permission, knowing that permission was required, and permitted Paul to drive it. The defendant was therefore not vicariously liable to the claimant.
2. Both Thai and English law required the driver to act for the principal’s purposes and with the principal’s authority. The court would have applied Thai law because the material events and arrangements were principally connected with Thailand.
3. An internal limitation on authority may not protect a principal against an innocent third party. It does not assist an agent who knows that the required authority is absent and acts in breach of the principal’s rules.
4. The defendant’s pursuit of insurance claims did not ratify the unauthorised driving. Ratification required informed conduct showing adoption of the agent’s act. The claims were equally explicable by humanitarian considerations, uncertainty about liability and the insurer’s limited inquiries.
5. Approbation and reprobation was treated as a procedural doctrine connected with inconsistent positions in separate proceedings. The insurance conduct was too equivocal to amount to an election or inconsistent position.
6. The defendant failed to prove contributory negligence. The claim was dismissed.

The judgment records that an earlier trial had been set aside and a retrial ordered in Smith v Kvaerner Cementation Foundation Ltd (Bar Council intervening) [2006] EWCA Civ 242. This judgment determined the retrial.