Casualty

The past year has witnessed a continued transformation in the liability landscape facing insurers, characterised by expanding legal boundaries, evolving regulatory frameworks, and the emergence of new statutory obligations.

The continued expansion of vicarious liability beyond traditional employment relationships, the shift towards holding online marketplaces accountable for defective products, and the introduction of Martyn's Law all reflect a broader trend: the courts and legislature are increasingly willing to extend the reach of liability to match the complexities of modern business operations. Meanwhile, recent judgments in multi-party litigation have highlighted the significant costs risks and nuanced legal considerations that continue to challenge conventional approaches to claims management.

Looking ahead, the clear direction of travel suggests that insurers must adapt their risk assessment methodologies, underwriting practices, and policy wordings to reflect these developing exposures. The UK's product safety and liability regime is undergoing its most significant transformation in almost 40 years, with the Product Regulation and Metrology Act 2025 coming into force and the Law Commission launching a comprehensive review of the product liability framework to ensure it keeps pace with innovation in an age of AI and digital products. Similarly, with Martyn's Law anticipated to come into force in early 2027, insurers have a valuable window of opportunity to work proactively with insureds to understand their obligations and implement appropriate protective measures.

The common thread running through these developments is the need for enhanced scrutiny and proactive engagement. Whether it is ensuring that contractual arrangements properly reflect genuine independent contractor relationships to manage vicarious liability risk, or assessing whether online marketplace clients have robust systems for identifying unsafe products and maintaining traceability of third-party sellers, insurers must move beyond reactive claims handling to strategic risk partnership. The importance of thorough risk assessment and strategic legal planning cannot be overstated, with early collaboration and identifying the most effective course of action proving crucial in an environment where judicial discretion remains wide and outcomes increasingly complex.

Articles in this section include: 

• Vicarious liability: Managing risk for the modern workforce. 
• Evolving product liability risks: What insurers need to know about online marketplaces.
• Martyn's Law: Implications for insurers.
• Illegality, insurer liability and contributory negligence in motorbike claims.

Vicarious liability: Managing risk for the modern workforce 

Author: James Fawcett

Vicarious liability is one of the few remaining areas where civil liability can attach without ‘fault’ on the part of a defendant, with organisations fixed with liability for the negligent acts of their employees. 

With the continued expansion of vicarious liability beyond traditional employment relationships, new risks are being created. In what is an increasingly complex landscape of service delivery through flexible working, it is essential that organisations carefully structure their contractual relationships and properly document their arrangements.

For insurers providing public liability, employers' liability, and professional indemnity cover, understanding these evolving exposures is vital for risk management, ensuring appropriate policy wording, and effective claims management. 

The legal framework: A two-stage test

The well-established two-stage test for vicarious liability requires:

1. a relationship of employment or one akin to employment between the defendant and individual committing the negligent act; and
2. that the conduct was sufficiently closely connected to the acts the employee was authorised to perform, that it can fairly and properly be seen as acting in the course of employment (or quasi-employment).

While this framework appears clearly defined, it remains an area of considerable scrutiny and attempts to broaden the scope continue, particularly in respect of the first stage.

The expanding boundaries of ‘akin to employment’

The first stage of the test has seen significant expansion beyond traditional employer-employee relationships.

In Cox v Ministry of Justice, [2016] UKSC 10, a prisoner engaged in kitchen work was found to be in a relationship akin to employment where, (i) the prison service created the risk of the act being committed by assigning tasks, (ii) the prisoner was under the control of the MOJ, and (iii) the work relieved the prison service from engaging employees at market rates.

This decision is more relevant now than ever as organisations increasingly rely on support from outside of the traditional workforce. This might be gig economy workers, agency staff, and employees working fully remotely across numerous jurisdictions. The quickly evolving nature of workforce presents a significant challenge in managing the risks of vicarious liability, with that risk heightened by a willingness of the courts to continue to expand the reach of the employment relationship.

A significant development was the Court of Appeal decision in DJ v Barnsley [2024] EWCA Civ 841, which extended the scope of vicarious liability to kinship foster carers. Whilst the judgment was fact-specific, the sequence of events was not unusual - informal voluntary care arrangements that were later formalised. The decision reinforces the increasingly challenging environment of managing risk from the actions of individuals who are engaged by organisations in an informal capacity.  

The independent contractor distinction

The recent case of J D Wetherspoon Plc v Burger & Risk Solutions BG Ltd [2025] EWHC 1259 (KB) does however, reinforce the crucial distinction between true independent contractors and deemed employees.

On appeal, it was held that while the wrongful conduct (a serious assault by door staff against a customer) was sufficiently closely connected with authorised activities, the facts did not support a relationship ‘akin to employment’. Significantly, neither did the commercial arrangement. This was a contract for the provision of specialist services, not a contract of service.

Conclusion 

The shift to new and more flexible working arrangements will inevitably continue at pace. In order to properly manage risk, organisations need to ensure that their contractual arrangements are scrutinised and are properly structured to reflect genuine independent contractor relationships.

For insurers, this evolution demands proactive risk management, enhanced underwriting scrutiny, and careful claims handling. Those who adapt their approach to reflect these expanding exposures will be better positioned to price risk accurately, manage claims effectively, and support insureds through an increasingly complex liability landscape.

Evolving product liability risks: What insurers need to know about online marketplaces

Author: Lydia French and Victoria Curran

The recent case of a consumer suing Amazon for an injury sustained from a product bought from the website, highlights a significant change in the liability of online marketplaces. Against the backdrop of the recently enforced UK Product Regulation and Metrology Act 2025 and the Law Commission’s review of the UK’s product liability laws, this represents a shift in the landscape that insurers need to be alive to.

Case against Amazon

The claimant, Fabio Tresoldi, purchased a power tool described as a "Vevor Portable Benchtop Table Saw Woodworking Cutting Polishing Carving Machine Woodworking Cutting Machine with Countertop" from Amazon using his Prime account membership in September 2022. He used the tools and suffered an injury to his dominant index finger, which resulted in a partial amputation. Shortly after the purchase, the UK Government's Office for Product Safety and Standards warned the product in question was a "serious risk" to users as "the blade is accessible by hand from the side". It issued a safety report for over 90 Vevor products, resulting in imports being destroyed at the UK border. 

Mr Tresoldi brought his claim against Amazon under the Consumer Protection Act 1987, alleging that the power tool was defective for the purposes of the Act and that Amazon were liable as the “producer” of the defective product. Section 2(2) of the Consumer Protection Act 1987 provides that where damage is caused by a defective product, liability for the damage will rest with the producer of the product, which includes importers of products into the United Kingdom. 

Amazon admitted liability, without putting forward a defence, and it is understood that the claimant has since secured a five-figure settlement. 

Current UK legal position

It has been the widely held view that online marketplaces and other retailers are not liable under the Consumer Protection Act. 'Pure' online marketplaces (which host listings for products sold by third parties) are generally considered to fall outside the product liability regime. The Tresoldi case demonstrates that this position may be changing, particularly where online marketplaces:

• are directly involved in the importation of products into the UK;
• store products;
• supply such products to UK consumers;
• hold themselves out as producers or importers; and
• play an active role in the supply chain rather than passively hosting listings. 

Evolving regulatory landscape 

In addition, the UK's product safety and liability regime is undergoing its most significant transformation in almost 40 years, with the Product Regulation and Metrology Act 2025 coming into force and the Law Commission launching a review of the UK's product liability framework. 

The Act came into force in the summer and gives the government powers to update product safety and metrology regulation, with the power to amend or replace previous EU based rules. It also allows the creation of detailed rules for a wide range of products and ability to address issues arising from new technologies and online marketplaces.

At a similar time as the Act came into force, the Law Commission launched a detailed review of the UK's product liability regime. The review aims to ensure the liability regime keeps pace with innovation in an age of AI and digital products and seeks to strengthen consumer access to redress. 

It is significant that the EU has recently amended its product liability framework, with the specific intention of protecting the right of consumers to bring claims for personal injury. The Product Liability Directive applies to products put on the EU market from December 2026. It stipulates that an online platform may be held liable to an injured customer where the seller of the defective product cannot be identified and the transaction takes place in a way that would lead an average consumer to believe that the product sold is provided by the online platform itself. The revisions clearly expand the scope of liability for online marketplaces.

Implications and considerations for insurers

The settlement of the Tresoldi case and the regulatory landscape, have significant implications for online marketplace retailers as their involvement in the supply chain could result in liability for defective products under the current legislation. Perhaps more significantly, the clear direction of travel suggests that this liability may soon be further embedded and extended. This creates significant exposure for insurers providing product liability coverage to online marketplaces. 

The government has outlined its focus areas for future regulations under the Act, including introducing a proportionate regulatory framework for online marketplaces and other new business models in the supply chain. Insurers will want to assess whether online marketplace clients have robust systems for:

• identifying and removing unsafe products;
• responding to safety alerts;
• maintaining traceability of third-party sellers; and
• implementing product safety standards.

Alongside assessment of whether current premium structures adequately reflect the evolving risk landscape, insurers will want to review policy wordings to clarify coverage for online marketplace liability and consider exclusions or sub-limits for third-party seller products.

Martyn's Law: Implications for insurers

Author: Lydia French and Herjit Khinda

The Terrorism (Protection of Premises) Act 2025, also known as 'Martyn’s Law', received Royal Assent on 3 April 2025. It is anticipated that it will come into force in early 2027.

The inquiry following the Manchester Arena bombing in 2017 called for the government to legislate to ensure stronger and more consistent measures were put in place to protect the public against potential terrorist attacks.

What duties does the Act impose?

The Act places legal responsibility on venues, events and public spaces where 200 people or more are present, to prepare for potential terrorist attacks and have measures in place to mitigate risk should an attack occur. There are enhanced requirements for larger premises and events with 800 people or more. 

Whilst there is no legal requirement to comply with the legislation until it comes into force, all who fall within the scope of the Act will want to start to plan. The government is to produce guidance this year to assist those who are impacted to understand their obligations and implement the requirements. 

The Security Industry Authority (SIA) will oversee compliance with the Act and individuals/organisations responsible for qualifying locations, will need to engage with the SIA. The role of the SIA is to advise and ensure compliance with legislation, as well as providing support to those with qualifying premises. Preparatory work is being done by the SIA, who has actively engaged with a number of sectors, including retail, healthcare and education. The SIA are also preparing guidance which will detail its regulatory functions and investigatory power.   

How will this impact insurers?

Insurers will need to consider the new statutory obligations when underwriting policies, as non-compliance could expose policyholders to enforcement action by the SIA, including compliance notices, monetary penalties, restriction notices and potential criminal offences. There is also the potential for civil claims to be brought obligations have been breached. 

Insurers would be well advised to reflect upon risk assessments and claims handling given that enhanced duty premises must document their public protection procedures and measures, including assessment of how these mitigate vulnerability and risk of harm. Insurers can utilise this audit trail when evaluating terrorism risk exposure and determining coverage levels. As there is a period of time before the Act comes into force, insurers have the opportunity to adapt their products and risk assessment methodologies.  

However, it will be necessary to monitor compliance levels across their portfolio as engagement with businesses indicates that preparedness and protective security in counter-terrorism often falls behind areas with long-established requirements. It is important that insurers work with insureds to mitigate risks and ensure there is a clear understanding of obligations.

Illegality, insurer liability and contributory negligence in motorbike claims: Dormer v Wilson (D1), Green Realisations 123 Ltd (D2) and MIB (D3)  

Author: Norma O’Donovan

Summary

The claimant, aged 15, sustained serious injuries, including a traumatic brain injury, due to a collision that occurred on 12 April 2017. He was the pillion passenger on a stolen motorcycle being driven by his 16-year-old uncle (D1).

Issues

The case raised issues of the illegality defence in tort; liability under the Road Traffic Act 1988 of an insurer of a stolen motorbike – including to an injured pillion passenger where such liability is excluded under the policy; and the liability of the Motor Insurers’ Bureau (‘MIB’).

Circumstances

The claimant and D1 were riding a motorbike, neither of them wearing helmets. D1 was driving the claimant (who had suffered an injury and was riding as the pillion passenger) to the hospital. They went through a red light at a crossroads and collided with a car. It was accepted that D1’s negligence caused C’s injuries (D1 was unrepresented, did not enter a defence and played a limited part at trial, save as a witness for the claimant). D1 was unemployed and unable to pay the damages, therefore the claimant joined D2 (insurer) and D3 (MIB). D3 left its defence to D2 so that D2 faced two different routes to liability: first as RTA insurer under the Road Traffic Act 1988; and second as Art.75 insurer.

Decision  

Judgment was entered for the claimant. With regards to illegality, three offences were alleged against the claimant:

• ‘Allowing to be carried’: Failed on the basis that the offence requires the passenger to have known (actual or blind eye knowledge) that the vehicle had been stolen and the Court found that the claimant did not know or have reason to believe it was stolen or unlawfully taken.
• ‘Causing a vehicle to be used without insurance’: Did the claimant cause D1 to use the motorbike without insurance by injuring his ankle and requiring D1 to transport him to hospital? Recovery of damages when a subsequently injured passenger has (even knowingly) caused a driver to drive without insurance contrary to s.143 RTA is not harmful to the integrity of the legal system in the same way as dangerous driving. A claimant is not compensated for the consequence of his own criminal act in encouraging driving without insurance, but for the consequences of the driver’s negligence in injuring him and his foolishness can (and in this case, did) sound in contributory negligence.
• ‘Joint enterprise dangerous driving’: Did the claimant not only encourage dangerous driving but intend to do so? The Court found that D1's driving was dangerous. However, joint enterprise was not established as the claimant had neither encouraged it, nor intended to do so. 

As to insurer liability, D2 was liable to the claimant to satisfy any unsatisfied judgment against D1 for his injuries as RTA insurer, or, if that was wrong and D3 was liable instead, D2 was liable to pay it as the Art.75 insurer.

Regarding contributory negligence, claimant was not wearing a helmet (despite having been warned to do so by D1’s older brother) and for this alone the court would have applied a deduction of 15%. Taken in conjunction and ‘rolled up with’ the decision to go to hospital on the back of the bike driven by D1, the court applied a total overall deduction of 20%. 

Key takeaways for insurers 

The decision provides Insurers with useful guidance on a number of issues that are often central to motor claims, and particularly those involving motorbikes: 

• The illegality defence has a high threshold: The passenger must have actual knowledge of theft AND (for joint enterprise) have encouraged and intended dangerous driving.
• RTA liability overrides policy exclusions: Insurers of stolen vehicles remain liable to injured passengers despite theft exclusions.
• Focus on contributory negligence: Where illegality fails, contributory negligence is the primary tool for reducing quantum.
• Helmet non-use equals 15% contributory negligence: Apply this deduction consistently for motorcycle passenger claims.
• ‘Rolled up’ approach: Multiple contributory factors warrant an overall assessment, not mechanical addition.
• Knowledge is key: Early investigation of passenger's actual knowledge is critical to defence strategy.

Costs risks to defendants in multi-defendant claims

Authors: Joanna Wallace and Anna Gledhill

The decision in Pashamov v Taylor & Edward Vinson [2025] EWHC 1035 (KB) underscored the complexities and potential cost implications for defendants involved in multi-party cases. 

Background

Mr Pashamov was employed as a fruit picker on the second defendant’s (D2) farm. At the time of the accident he had alighted the bus on which he was travelling back to his accommodation (both of which were owned or operated by D2), to invite his colleagues to join him, when he was struck by the first defendant’s (D1) car. 

He suffered significant injuries and subsequently brought a claim against both defendants.

Decision

At trial, the Deputy High Court Judge could find no fault on behalf of D1 (in front of whose vehicle the claimant was said to have stepped) but did find that D2 was partially (65%) to blame for the accident.

This was on the basis that Mr Pashamov was said to be carrying out tasks at the direction of and for the benefit of his employer when calling others to the bus, which were held to be incidental to his employment even though the accident happened after his shift. 

Costs 

The question then arose as to costs. 

The starting point was that the claimant was entitled to his costs of succeeding in the claim against the second defendant; and the first defendant was entitled to his costs against the claimant for succeeding in his defence. 

Qualified one way costs shifting (QOCS), which generally protects an unsuccessful claimant against having to pay the costs of a successful defendant, applied.

The question for the court was therefore whether a different order should be made in relation to: (i) the costs payable by the claimant to D1, (ii) the costs the claimant had incurred in pursuing D1, and (iii) both of these interconnected issues.  

Costs principles 

The judge identified the key principles in the exercise of his discretion (which both parties accepted was a wide one), as:

• If the claimant has behaved reasonably in suing D1 and D2, it would be harsh if he was ordered to pay the costs of D1.
• If it was not reasonable to join D1 because the cause of action was practically unsustainable, it would be unjust to make D2 pay the costs of D1.
• It will always be a factor whether one defendant has sought to blame another.
• That cases are in the alternative, so far as they are made against two defendants, will be material.
• That claims were not truly alternative does not mean that the court does not have the power to order one defendant to pay the costs of another.

Costs discussion 

The judge concluded that it was reasonable for the claimant to pursue the claim against D1. There was a hard fought battle between them at trial, with the benefit of reconstructive expert evidence, and it seems that the point could have gone either way on the day. 

The judge accepted that D2 did not at any point seek to blame D1 - although, as the judge quite rightly stated, they did not need to, as the claimant had already included them in the proceedings.

The judge did not, therefore, put a huge amount of weight on this point. He also made the observation that while the battle “raged” between the claimant and D1, the outcome would undoubtedly have been to the benefit of D2 in either, absolving them of liability entirely or, at the very least, considering the extent to which the claimant contributed to the accident himself (and which, ultimately, D2 benefited from in the conclusions reached). 

The judge also accepted that the proceedings were not brought “in the alternative” (there were rather different causes of action against both D1 and D2), although they did relate to the same material facts and it was right that they were heard together. 

Ultimately, however, the judge did not find that the latter points weighed heavier than the former. He was also extremely sympathetic to the points taken by D2 that if they were able to have any chance of recovering their costs against the claimant (and this was a big “if” - there would have to be a second trial on quantum for QOCS to be defeated), it would not potentially be for quite some time. 

He, therefore, not only ordered D2 to pay D1’s costs, but also the claimant’s costs of pursuing D1. 

Costs analysis 

In some respects, D2 could perhaps feel a little aggrieved by the result. The litmus test for these applications has historically been thought to be the amount of blame each defendant has placed upon the other, which neither defendant really sought to do here. 

On this occasion, however, the judge placed less weight on these factors, instead preferring to focus upon whether or not it was reasonable for both defendants to be joined by the claimant and where fairness would ultimately lie, depending on what findings were made during the trial itself. 

Some solace may be taken from the fact the judge reached his conclusion based on the particular facts and circumstances of this case but, ultimately, the underlying principle is that there will always remain a risk for an unsuccessful defendant to pick up the tab for the others involved in the case. 

What does this mean for defendants and their insurers? 

While, on the face of it, the judge’s decision in this particular instance turns on the specific facts of the case (and is not, therefore, necessarily self-sufficient to constitute any sort of binding authority for how one should expect the court to determine the point in any future cases), it does highlight the significant discretion afforded to judges on issues of costs, and the risks faced of being on the receiving end of something similar. 

The judgment reinforces the complexities and risks involved when outcomes are mixed, meaning that some defendants might be found liable while others are not. This can lead to intricate decisions regarding costs allocations and liability. 

The outcome in Pashamov underscores the importance of thorough risk assessment and strategic legal planning. It is crucial to consider all potential risks when managing litigation, not least the possibility of an adverse costs order if the evidence turns against you at trial. Insurers, their insureds, and legal advisers need to be alive to the risks, working collaboratively and identifying the most effective course of action at an early stage, whether that is working together towards appropriate resolutions, through early settlement, successful strike outs, discontinuances or proceeding to trial in the right cases.