Court of Appeal decision brings insurance complications to traditional employers' liability cover

The Court of Appeal's decision in Michael Moon v Paul James Garrett and Ors is of interest to insurers.

While carrying out building works at his home, Garrett ordered some concrete blocks. These were transported by Moon, a delivery driver. While unloading them, some blocks fell towards Moon, who, understandably, moved out of the way. In doing so, he fell into a deep pit, suffering serious injury.

In December 2005, the court found Garrett liable pursuant to the Occupiers' Liability Act 1957 but declined to find that the Construction (Health, Safety and Welfare) Regulations 1996 imposed any duty on him towards Moon.

The court also ordered Garrett to pay Moon's costs and Moon's employer's costs. Moon's claim against his employer was dismissed.

On appeal, the court found that the real question for the court to ask when considering liability was not whether Garrett could foresee the tumbling blocks, but rather whether he could foresee that "a man delivering blocks ... a few feet from this deep excavation, might slip, and if so whether it was reasonably foreseeable that in slipping he might fall into this pit".

Finding that it was reasonably foreseeable that Moon might fall, the court found Garrett liable under the 1957 Act and the 1996 Regulations.

On costs, it upheld the first instance decision and went on to say that a Bullock or Sanderson order (to compel an unsuccessful defendant to pay the costs of a successful defendant directly) does not require two "truly alternative" cases: Garrett had sought to blame Moon's employers. The claimant's conduct was reasonable, therefore, it was fairer for Garrett than for Moon to pay their costs.

This case is likely to affect insurers in the following circumstances:

  • When an insured carries out DIY works: The court said the duty of an occupier carrying out extensive building works is under a duty very similar to that of a professional builder. How extensive the works must be is not clear, so insurers must make sure the extent of cover to their insured during construction works is clear

  • When defending an action by blaming another, insurers and their advisers will need to consider carefully the possibility of losing and then paying three parties' costs, even though the two claims are not truly alternatives

  • When involved in litigation against a "man of straw", the court may make a cost order that represents a pyrrhic victory

  • When an employee is working under another's direction, someone not immediately recognisable as an 'employer' may be liable for another's employee, and the EL insurer may avoid liability completely.

    • ' Sonja Dale is a solicitor with law firm DLA Piper Rudnick Gray Cary UK