Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd [1946] UKHL 1

A harbour board loaned a crane and driver to stevedores. The driver's negligence caused an injury. The House of Lords held the board, as the general permanent employer, remained liable, establishing a strong presumption that responsibility for a loaned employee is not easily transferred.

Facts

The appellants, Mersey Docks and Harbour Board, owned a number of mobile cranes which they hired out with a driver. The driver was an employee of the Board, paid and subject to dismissal by them. The Board hired a crane and a driver, Mr Newall, to the respondents, Coggins & Griffith (Liverpool) Ltd, a firm of stevedores, for the purpose of loading a ship. The contract for hire included a clause stating that the driver would be the servant of the hirers (Coggins). The stevedores had immediate control over the tasks to be performed by the crane driver – they directed him where to move the crane and what goods to lift. However, the Board, as the general employers, paid his wages and retained the power to dismiss him. During the loading operation, the crane driver’s negligent handling of the crane resulted in an injury to a Mr McFarlane. The injured party sued both the Board and the stevedores.

Issues

The central legal issue was to determine which employer was vicariously liable for the crane driver’s negligence. This required the court to decide whether, at the time of the accident, the driver was acting as the servant of his general employer, the Harbour Board, or his temporary employer, the stevedores. The court had to consider the a) the test for determining the employer-employee relationship in the context of a loaned employee, and b) the legal effect of the contractual term that purported to transfer employment status to the hirer.

Judgment

The House of Lords unanimously dismissed the appeal, holding that the Mersey Docks and Harbour Board remained the employer responsible for the driver’s negligence. The court affirmed that there is a heavy burden of proof on the general employer to establish that responsibility has been shifted to the temporary employer.

Reasoning of the Court

Their Lordships established that while control is the key test, a distinction must be drawn between having authority to direct what work the servant is to do, and having authority to direct how the servant is to do that work. Although the stevedores could direct the driver on the specific tasks, they had no authority over his technical skill or the manner in which he operated the crane.

Viscount Simon stated the primary test:

In a case of this sort the question is, of course, not who was the man’s paymaster, that is not a decisive test… The great test is this: ‘whose servant was he?’… the real test is ‘who was entitled to give the orders as to ‘how the work should be done’.

He further clarified that the burden of shifting liability is substantial:

It is not easy for the general employer to discharge the burden of proving that the hirer has become the ‘pro hac vice’ employer. … Prima facie, the liability is that of the general employer, and where a man driving a mechanical device, such as a crane, is sent to perform a task, it is easier to infer that the general employer continues to control the method of performance, since it is his crane and his driver that he is lending.

Lord Porter emphasised that the burden of proof on the general employer is a heavy one that can only be overcome in exceptional circumstances. He articulated the distinction between control over the task and control over the method:

The stevedores could and did tell him where to go, what parcels to lift and where to take them… but… they had no authority to tell him how he was to handle the crane in doing his work.

Regarding the contractual clause, the court held that it could not be the sole determinant of liability towards an injured third party. Lord Macmillan noted:

The parties cannot by a contractual device of this kind without more transfer the liability for a servant’s negligence from the real master to a hirer. As between the parties the clause may operate as a stipulation for a right of indemnity, but it cannot affect the legal position of the workman ‘vis-a-vis’ the injured third party.

Implications

This case is a landmark authority on the issue of vicarious liability for loaned employees. It establishes a strong legal presumption that the general or permanent employer remains liable for the torts of their employee unless they can discharge the heavy burden of proving a complete and effective transfer of control to the temporary employer. The judgment solidified the ‘control test’ but refined it by distinguishing between control over the delegated task and control over the method of its performance, particularly where specialised skill or equipment is involved. The decision also clarified that private contractual arrangements between employers regarding liability are not binding on third parties who are injured by an employee’s negligence.

Verdict: The appeal was dismissed. The Mersey Docks and Harbour Board, as the general employer, was held to be vicariously liable for the negligence of the crane driver.

Source: Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd [1946] UKHL 1