Naylor (t/a Main Street) v Payling 7.5.04

Nightclub owner not negligent for failing to satisfy himself that an independent contractor providing security was insured.

Mr Naylor was the owner and operator of a local authority licensed nightclub. He employed an independent contractor, Mr Whitehead to provide security at the club. Mr Whitehead was local authority accredited, as were his employees.

In the course of being ejected from the nightclub by a doorman employed by Mr Whitehead, the Claimant sustained severe head injuries.

First instance decision

At the liability hearing it was accepted that the doorman had acted negligently in the course of employment and that he was not an employee of the nightclub. It was also agreed that the nightclub did not owe the Claimant or members of the public a non-delegable duty to ensure their reasonable safety. Accordingly Mr Naylor was entitled to delegate the security function to Mr Whitehead. Unfortunately Mr Whitehead held no insurance and Mr Naylor had failed to enquire whether he had.

The trial Judge held that pursuant to his duty to ensure the safety of visitors to his premises, the nightclub owner ought to have ensured that his security contractor had public liability insurance and his failure to do so rendered him negligent for failing to use reasonable skill and care in selecting a competent subcontractor and therefore liable to the Claimant.

Court of Appeal

In an unanimous verdict the Court of Appeal reversed the trial Judge's decision, making it unequivocally clear that save in special circumstances (see below), there is no "free standing" duty on an employer to satisfy himself that his independent contractor is insured.

There are 2 types of cases governing liability for independent contractors:

• The first is where the employer will not be liable for the wrong doing of his contractors provided that he has taken reasonable care in selecting them for the relevant task and that he has not in some way contributed directly to the negligent act.
• The second is the well established category of exceptions where the employer cannot avoid liability because the liability is non delegable or where the task being undertaken by the contractor is extra hazardous or being carried out on public highways.

The Law Lords expressed the view that the job of a bouncer does not constitute an extra hazardous activity. In Gwilliam v West Hertfordshire Hospital NHS Trust & others (2002) it was held that a hospital carried out an activity which was extra hazardous with a clear risk of injury to the public and was therefore required to carry insurance. In Naylor the Court of Appeal said that Gwilliam was an unusual case which turned on its own peculiar facts and from which no principles of general application could usefully be derived.

Comment

The decision is a useful one for employers of contractors and their insurers in that it clarifies and re-affirms that save, in certain well established circumstances, an employer is not liable for the torts of his independent contractor. Failing to enquire as to the existence or adequacy of an independent contractor's insurance does not by itself constitute grounds for negligence.