DUAL VICARIOUS LIABILITY – A REMINDER
In Hwa Aik Engineering Pte Ltd v Munshi Mohammad Faiz and anor [2021] SGHC(A) 1 (“Hwa Aik v Munshi”), the newly established Appellate Division of the High Court refused to grant leave to appeal against the General Division’s recent decision on dual vicarious liability.
Background. In a previous blog post, we discussed the General Division of the High Court’s recent decision in Munshi Mohammad Faiz v Interpro Construction Pte Ltd [2021] SGHC 26, which was an appeal from the District Court.
To recap, a construction worker was injured by an excavator. The excavator operator was working under the directions of the excavation works subcontractor at the site. The operator was also under the general employment of the excavator supplier, who supplied the excavator and the operator to the excavation works subcontractor. The General Division of the High Court decided that both the excavation works subcontractor and the excavator supplier were vicariously liable to the plaintiff construction worker, but the main contractor was not liable.
The excavator supplier sought leave to appeal to the Appellate Division against the General Division’s decision.
Reasons for refusing leave to appeal. In refusing to grant leave to appeal, the Appellate Division said that the tests for imposing vicarious liability in Singapore and in the United Kingdom are not different, and that the English judgment of Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2006] QB 510 did not suggest that a general employer in the excavator supplier’s situation would never be liable. (Hwa Aik v Munshi [16] – [19]).
In addressing the perceived unfairness to the excavator supplier, the Appellate Division reiterated that there are policy reasons for imposing vicarious liability (Hwa Aik v Munshi [22]):
“22 All that can be said, at present, is that the absence of direct control by the permanent employer does not mean that the permanent employer is exempt from vicarious liability. A permanent employer may not be directly negligent itself. The question is whether it should be vicariously liable for the action of its employee where it has no direct control over that employee’s conduct at the time of the accident. The fault in question is not that of the permanent employer but of the employee. Nevertheless, the permanent employer may be vicariously liable to the injured party because of policy reasons, some of which have been mentioned in Viasystems, Christian Brothers and Ng Huat Seng. That is the very purpose of the doctrine of vicarious liability – to impose liability on an employer for an employee’s tort, even though the employer was not directly at fault for the tort (see, eg, Viasystems at [18]). Therefore, D3’s submission that it did not have control over Sujan’s actions on the day of the accident not only missed the point but also did not raise any novel issue of public importance.”
Importantly, the Appellate Division pointed out that employers have options to manage the risks involved (Hwa Aik v Munshi [23]):
“23 If employers like D3 still consider the legal position to be unfair, there are options available to them.
(a) First, they may seek a contractual indemnity from the temporary employer for the conduct of the employee. The value of that indemnity would depend on the scope of the indemnity and the financial strength of the temporary employer.
(b) Second, they may seek insurance cover for vicarious liability for the actions of the employee in such a situation. The scope of such a cover would have to be carefully framed.”
Significance. These are useful practical observations from the Appellate Division. As we had pointed out in our previous blog post, when an employer (the “permanent” employer) supplies its workers to another party (the “temporary” employer) to work under the instructions of the temporary employer, the permanent employer can still be held liable for the actions of its workers. Hence, it is prudent for employers to take steps to manage their risks if they are in the situation of being a permanent employer who supplies workers to a temporary employer.
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