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Naylor v Payling, 7 May 2004

17 May 2004
The issues

Bouncer – Independent Contractor – Uninsured- Whether Employer Liable for Breach of Freestanding Duty to Ensure Independent Contractor Was Insured

The facts

Mr Payling suffered severe head injuries on 11th December 1999 in the course of being ejected from Main Street Nightclub in Rotherham by a door attendant. The appellant owned and ran the club and employed as an independent contractor a Mr Whitehead to provide security at the club. Mr Whitehead did not hold any public liability insurance policy covering the activities of his employees. At a liability only hearing it was accepted that the door attendant had acted negligently. The Judge found that the door attendant was not the employee of the appellant nor did the appellant owe any non-delegable duty to the respondent. However, he held that in the circumstances of the case the appellant owed a duty in effect to ensure that Mr Whitehead was insured and that he was in breach of his duty of care in that regard to the respondent.

The appellant appealed.

The decision

The Claimant relied on the decision of Gwilliam v West Hertfordshire Hospitals NHS Trust and Others for the proposition that there could be a freestanding duty to ensure that an independent contractor was insured.

An enquiry by an employer of a contractor as to his insurance policy might well be part and parcel of the employer’s decision as to whether the contractor was suitably competent. However, there was evidence that Mr Whitehead had provided employees who were licensed and approved by the Local Pub and Club Watch Committee. No evidence had been called to suggest that the appellant should have doubted the competence of Mr Whitehead’s employees.

Save in the absence of special circumstances the law did not cast a freestanding duty on an employer to satisfy himself that his independent contractor had insurance cover or would otherwise be good for a claim. Gwilliam v West Hertfordshire Hospitals NHS Trust was not authority for any contrary proposition. In that case Lord Woolf decided the appeal on the basis that by raising a request and receiving a satisfactory answer the Defendant had complied with its duty to satisfy itself that the independent contractor was competent. Lord Woolf did not consider that the Defendant had a free standing duty to satisfy itself that the independent contractor had insurance cover for the benefit of any member of the public who might be harmed through the negligence of the contractor.

Lord Justice Waller (who gave one of the three Judgments in Gwilliam) gave a separate Judgment in which he stated that a freestanding duty to check insurance might exist and did in the circumstances in Gwilliam. However, a freestanding duty did not exist in this case. What had influenced Lord Justice Waller to hold there was a free standing duty in Gwilliam were the following factors: –

i) The hospital had wished to carry out an activity which was hazardous with a clear risk of injury,
ii) It was not onerous to check whether the independent contractor carried insurance and it was therefore a situation where is would not be acting reasonably in arranging for an independent contractor to carry out a hazardous activity unless the hospital checked first that visitors would be protected.
iii) A freestanding duty could only arise where the employer would be under a duty to insure himself or at the least had actually recognised the need for insurance in relation to a particular activity.

In this case the job of acting as bouncer did not fall within the type of hazardous activity under consideration in Gwilliam and secondly, the Defendant was under no duty to carry public liability insurance nor was there any evidence of a clear recognition of a duty to carry insurance in relation to the particular activity of a bouncer.

Appeal allowed.

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