Viasystems Ltd v Thermal Transfer Ltd [2005] 4 All ER 1181

Court of Appeal

Basic Facts: Viasystems Ltd (V) contracted Thermal Transfer Ltd (T) to install air conditioning in their factory. T subcontracted the work to Y, who further subcontracted it to X. X provided workers M and S, with Y’s employee H supervising them. S, while fetching screws, caused a flood by mishandling insulation, which led to V’s claim.

Issue: Who is vicariously liable for S’s actions: Z, Y, or X?

Held: rejected this claim (against subcontractor) , stating that vicarious liability applied to employees and not sub-contractors. The CA held for the first time that dual vicarious liability was possible (against employees).

• May LJ (allowing the appeal in part):

• Factors for determining vicarious liability include who had control over the employee and power of dismissal.

• Since H directed S’s task but not how to perform it, control was not transferred from X to Y.

• Both X and Y could have controlled S, suggesting joint liability, with each party bearing 50% of the responsibility.

• Rix LJ:

• Dual vicarious liability should be based on whether the employee is integral to both employers' operations.