Construction sites: negligence and non-delegable duties

Parties’ legal rights and obligations are usually negotiated and set out in contracts. Yet there are circumstances when legal obligations are imposed by law, i.e. irrespective of any agreement. The tort of negligence provides one example of this. The result is that parties who are not in a contractual relationship, e.g. a main contractor and a sub-subcontractor, may be legally accountable to each other.

A person may be liable in negligence where they have acted carelessly. But the law says that where a person delegates work to an apparently skilled and competent contractor (an “independent contractor”), he will not be liable for the carelessness of that contractor. There are, however, certain circumstances in which a court will impose an overriding duty (a “non-delegable duty”) on a person who delegates work to ensure that the work is carried out properly. Earlier last month the courts of England and Australia turned their attention to one of the more contentious situations in which liability may be imposed on a “non-delegable” basis, being where the activity to be performed is alleged to be “ultra hazardous” or “inherently dangerous”.

Biffa

Biffa engaged MEH to design and install an industrial grinder at a waste disposal plant. MEH, in turn, subcontracted the supply of the grinder to a company called OT. During the course of welding work, which OT had subcontracted to a third party, a fire broke out causing substantial damage to the plant. At first instance, the TCC held that whilst the subcontractor who performed the welding work had failed to fire proof the area or remove nearby combustible materials, the work in hand, i.e. “welding in the vicinity of unwetted combustible materials”, was an “inherently dangerous” activity. On that basis, OT was held liable to Biffa. The fact that OT had arranged for an apparently competent subcontractor to perform the welding work did not matter. OT’s duty was “non-delegable”.

The Court of Appeal adopted a much narrower approach than the TCC, and held that in determining what the relevant activity is (for the purpose of saying whether it is “ultra hazardous”), account must be taken of any precautionary measures that ought to have been taken. Only if the activity would have been “ultra hazardous” in spite of all suitable precautions having been taken will the person who engaged the contractor be subject to a “non-delegable” duty of care to persons who are injured or affected by the contractor’s carelessness. In this case, the Court of Appeal held that the relevant activity was simply welding inside the grinder, which would have been a relatively hazard-free activity had suitable precautions been taken. OT was therefore off the hook for the incompetence of the welders who carried out the work.

Transfield

In this recent Australian case, Transfield were contracted to maintain a high ropes course at a naval base. Transfield subcontracted the task of inspecting the course to Adventure Training Systems (ATS), who failed to carry out a thorough inspection of the course, as a result of which the claimant injured himself whilst using it.

The New South Wales Court of Appeal confirmed that under Australian law a non-delegable duty of care no longer exists in respect of “ultra hazardous” work. The Court went on to observe that even if such a duty were recognised for “ultra hazardous” work, the present case would not have come within its ambit. The duty would only apply to activities “that in [their] very nature involve… special danger to others.” Here the relevant activity was the act of inspecting the ropes, and therefore a duty of care could only have arisen if a third party had been injured during, and as a result of, the act of inspecting the ropes.

This case illustrates one of the fundamental characteristics of non-delegable duties (where they exist), namely that they apply to harm caused by the performance of the work, not all liability arising out of the work. By way of example, a fire breaking out during electrical work might give rise to a duty, but a fire breaking out at a later date as a result of defective workmanship would not.

Conclusion

The effect of Biffa is to all but sideline the existence of “non-delegable” duties of care in English law, certainly insofar as construction work is concerned. It is hard to think of an activity ordinarily carried out within the industry that remains “ultra hazardous”, despite the attendant safety precautions. Consequently, it may be that the duty now only applies where a contractor is specifically told to do something in a dangerous manner or in hazardous conditions. The Australian case of Transfield is consistent with this approach.

What both cases do is affirm that the distinct trend of the courts is to impose liability in negligence only where it can be shown that a person has himself been careless in some way. Liability will not readily be imputed on the basis that a “non-delegable” duty exists. More generally, these decisions should provide comfort to contractors, subcontractors, insurers and others who may be in a claimant’s crosshairs that the limits of their liability on a project will usually be circumscribed by contract, not super-added by the courts.

References:

Biffa Waste Services Ltd v Maschinenfabrik Ernst Hese GmbH [2008] EWCA Civ 1238

and Transfield Services (Australia) Pty Ltd v Hall [2008] NSWCA 294