Gwilliam v West Hertfordshire Hospital NHS Trust [2002] EWCA Civ 1041 (24 July 2002)

A claimant was injured on a 'splat-wall' run by an uninsured independent contractor at a hospital fete. The Court of Appeal held the hospital's duty included taking reasonable steps to check the contractor's insurance but found it had not breached this duty.

Facts

The claimant, Mrs Gwilliam, a 63-year-old woman, was injured while using a ‘splat-wall’ amusement at a summer fete organised by the West Hertfordshire Hospital NHS Trust (‘the Trust’) on its premises. The attraction was provided and operated by an independent contractor, Club Entertainment. The mechanism of the wall failed, causing Mrs Gwilliam to fall and sustain serious injuries. It subsequently transpired that the public liability insurance held by the independent contractor had expired four days prior to the event. At first instance, the judge held that although the contractor was negligent, the Trust was also liable for failing to ensure that the contractor had adequate public liability insurance. The Trust appealed this decision.

Issues

The central legal issues before the Court of Appeal were:
1. What is the scope of an occupier’s common duty of care under section 2 of the Occupiers’ Liability Act 1957 when engaging an independent contractor for an activity on their land?
2. Does this duty extend to an obligation to check that the independent contractor has adequate public liability insurance?
3. If such a duty exists, what steps are required to discharge it, and had the Trust breached its duty in the circumstances?
4. If a breach was established, did it cause the claimant’s loss?

Judgment

The Court of Appeal, by a majority, allowed the Trust’s appeal. The judgments of Lord Woolf CJ, Waller LJ (dissenting), and Sedley LJ provided differing views on the scope of the occupier’s duty.

The Majority View (Lord Woolf CJ and Sedley LJ)

Both Lord Woolf CJ and Sedley LJ held that the common duty of care owed by an occupier under the 1957 Act could, in appropriate circumstances, extend to checking whether an independent contractor was insured. They reasoned that the availability of insurance could be a relevant consideration when assessing the competence of the contractor selected by the occupier. The duty is to take such care as is reasonable to see that the visitor will be reasonably safe. Sedley LJ stated:

In my judgment, therefore, the common duty of care may, and in the circumstances of a case like the present does, extend to taking reasonable steps to see that an independent contractor engaged to carry out an activity on the occupier’s land is adequately insured.

However, the majority concluded that the Trust had not breached this duty. The Trust had enquired whether the contractor had insurance and had received an affirmative reply. In the absence of any indications that this answer was unreliable or that the activity was exceptionally hazardous, this inquiry was sufficient to discharge the duty. According to Sedley LJ:

In my view, given that the contract was a straightforward one for the supply of an ordinary piece of funfair equipment, that a written contract was not drawn up, and that nothing had happened to put the Trust on alert, an affirmative answer to an inquiry about insurance was a sufficient discharge of the Trust’s duty as occupier.

Lord Woolf CJ agreed, emphasising that the standard is one of reasonable care, not a guarantee of safety or of the contractor’s solvency. Thus, while the duty existed in principle, the Trust had not fallen below the required standard.

The Dissenting View (Waller LJ)

Waller LJ dissented on the fundamental issue of whether the duty extended to checking insurance at all. He argued that the duty under the 1957 Act is concerned with ensuring the physical safety of the premises and the visitor, not with ensuring the visitor has a financial remedy if injured. In his view, the competence of a contractor relates to their ability to perform the work safely, not their insurance status. He stated:

It is in my view stretching the duty of care owed by an occupier to a visitor too far to hold that it is a breach of that duty not to check the insurance position of an independent contractor.

He argued that imposing such a duty would create uncertainty and be overly burdensome. He concluded that the Trust’s duty was to select a reasonably competent contractor, which they had done, and that their duty did not extend to checking the contractor’s insurance arrangements.

Implications

The case is significant for establishing that an occupier’s non-delegable duty of care can include an obligation to inquire into the insurance position of an independent contractor, as a factor relevant to their competence. However, the majority’s finding that a simple inquiry could suffice, without demanding documentary evidence, set a relatively low standard for discharging this duty in straightforward circumstances. The decision created a nuanced duty that falls short of making occupiers guarantors of their contractors’ solvency. It highlights the judicial tension between protecting visitors from physical harm and ensuring they have a financial recourse in the event of negligence by a third party for whom the occupier is not vicariously liable. The case has been influential in subsequent discussions about the scope of duties of care in relation to the actions of independent contractors.

Verdict: The appeal was allowed. The defendant Hospital Trust was found not to be liable.

Source: Gwilliam v West Hertfordshire Hospital NHS Trust & Ors [2002] EWCA Civ 1041 (24 July 2002)