Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151

An agency worker's negligence caused injury on a building site. The Court of Appeal, considering which of two contractors was liable, established a significant precedent: two separate 'employers' can share control and therefore be held jointly vicariously liable for an employee's tort.

Facts

Viasystems (Tyneside) Ltd engaged Thermal Transfer (Northern) Ltd (‘Thermal Transfer’) as the main contractor for works at its factory. Thermal Transfer subcontracted ducting installation to CAT Metalwork Services Ltd (‘CAT’). CAT hired two fitters, Mr Taylor (a CAT employee) and Mr Megson (his mate), to perform the work. Mr Megson was technically employed by an employment agency, Darlington Technical Services, and supplied to CAT. However, on site, both Mr Taylor and Mr Megson worked under the direction and supervision of Thermal Transfer’s site foreman. An employee of Viasystems, Mr Crosbie, was injured due to Mr Megson’s negligence. At first instance, the judge found CAT solely vicariously liable for Mr Megson’s tort. Thermal Transfer appealed, arguing it was not liable at all, or alternatively, that liability should be shared with CAT.

Issues

The central legal issue was whether, as a matter of law, two distinct ’employers’ could be held vicariously liable for a single tort committed by one ’employee’. The court had to determine if the traditional rule—that liability must be transferred to a single temporary employer—was absolute, or if dual liability was possible where control was shared. The specific question was whether Thermal Transfer, CAT, or both were vicariously liable for Mr Megson’s negligent act.

Judgment

The Court of Appeal unanimously allowed the appeal, holding that both Thermal Transfer and CAT were jointly vicariously liable for Mr Megson’s negligence. The court departed from the conventional view that liability must lie with a single master.

Lord Justice Rix

Rix LJ conducted a detailed review of the doctrine of vicarious liability, noting the ‘control’ test and the strong presumption laid down in Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd that the general employer remains liable. However, he concluded this was not an irrebuttable presumption and did not preclude dual liability in principle. He found that on the facts, both Thermal Transfer and CAT exercised significant control over Mr Megson’s work. He concluded:

Where two potential defendants meet the relevant tests for vicarious liability in respect of a single tortfeasor, those defendants are to be held jointly and severally liable for the tort. That is a matter of principle… In such circumstances, both should be liable, and it is for the court to apportion the liability as between the two defendants, under the Civil Liability (Contribution) Act 1978.

He determined that both companies shared control and were therefore equally to blame, apportioning liability 50/50 between them.

Lord Justice May

May LJ agreed, framing the core question as whether dual vicarious liability was legally possible. He emphasised that previous case law did not create a binding precedent preventing such a conclusion and that policy considerations supported its recognition in the context of modern, complex contracting arrangements. He stated:

There is in my judgment no authority which is binding on this court which prevents the court from concluding that it is in a particular case a legal possibility… In my judgment, there is no reason of principle or policy why it should not be a legal possibility. It may be rare that the facts of a particular case justify a conclusion of dual vicarious liability, but the legal possibility should not be excluded.

Lord Justice Clarke

Clarke LJ also concurred, providing a clear summary of the principles to be applied. He explicitly acknowledged that the court was moving the law forward:

For the reasons given by May and Rix LJJ, with which I agree, the courts have not recognised a principle of dual vicarious liability. I agree with May and Rix LJJ that the law should now recognise that both employers may be vicariously liable for the tort of an employee… where the employee in question is in the position of Mr Megson here. Whether the same principles would apply to a very different kind of case in which an employee has two different jobs with two different employers is not for decision in this case.

Implications

This case is of major significance in the law of tort and employment. It formally established for the first time in English law that two parties can be held jointly and severally vicariously liable for the tortious act of a single employee. The decision reflects a pragmatic judicial approach, adapting the common law to the realities of modern labour-hire and multi-layered subcontracting arrangements. It moves the focus from a search for a single ‘master’ to an analysis of whether more than one party exercises sufficient control over the employee’s actions to warrant the imposition of liability. It provides greater scope for claimants to seek redress and shifts the burden of apportionment onto the co-liable employers under the Civil Liability (Contribution) Act 1978.

Verdict: Appeal allowed. The judgment at first instance was varied to hold that Thermal Transfer (Northern) Ltd and CAT Metalwork Services Ltd were jointly and severally liable for the claimant’s injuries, with liability apportioned 50/50 between them.

Source: Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151