In August 3, 1992 Joyce Andrews, a cleaning supervisor employed by Initial Cleaning Services, was injured when working at one of Initial's customers, McDougalls Catering.
She was working in a storeroom and rested a carpet cleaner on a sink. Unbeknown to her, the sink was defective. It came away from the wall, causing her to suffer injuries. McDougalls was unaware of the fault, but it was known to her employer. Andrews sued Initial as her employers and McDougalls as owners of the premises.
At trial in October 1998, the Recorder found that McDougalls used the storeroom, which was known as the "cleaners' cupboard" albeit not daily as did the cleaners. It alone retained the key. Both defendants owed a duty to Andrews under the Occupier's Liability Act. Initial also owed a duty to its employee even when working at the premises of another company. So far, so uncontroversial. When it came to apportioning liability between the defendants, however, he considered who had been the principal occupier of the storeroom and who, therefore, had the greater responsibility for the sink's safety.
He accepted that McDougalls would have repaired the sink had it been aware of the defect. However, on the basis that McDougalls owned the sink and retained the key to the storeroom and that its employees used the storeroom, there was a special onus of responsibility on it. He apportioned liability as 25% against Initial and 75% against McDougalls.
The claim had a limited value – it was pleaded at in excess of £75,000 but was subsequently settled for £3,000. However, significant costs had been incurred; Andrews' costs alone exceeded £20,000. Furthermore, the case raised a point of interest. Could an employer, aware of a defect, pay a smaller share of the damages than an occupier who was not (but whose systems should have shown it up)? McDougalls appealed.
The Court of Appeal heard the appeal on July 14, 1999. It held that it was inappropriate to equate ownership with occupation of the sink. The fact that McDougalls owned the sink and maintained control of the storeroom key did not necessarily involve a responsibility for a defect in equipment used in activities carried on in the premises. Initial, as the claimant's employers and the party carrying out operations in the storeroom, bore the overwhelming responsibility. In those circumstances, the Court of Appeal assessed Initial's share at 75% and McDougalls at 25% – a reversal of the Recorder's apportionment.
The case teaches important lessons for insurers such as the benefits of a Calderbank offer on liability (now a Part 36 offer). In this case, there had been a number of such offers, commencing in 1996 with an offer by McDougalls to pay 25% of the liability of the defendants. This was exactly the amount adjudged by the Court of Appeal, with the result that Initial had to pay McDougalls' costs for three years, in addition to all the claimant's costs.
It is tempting to write unexpected trial losses off to experience. It is generally considered that the Court of Appeal has little interest in personal injury cases but this was a fairly trivial case and involved findings of fact and an apportionment of liability – but the Court was prepared to entertain the case. It costs relatively little to appeal, often in contrast to the trial costs.
Had the Recorder apportioned liability 50/50, then McDougalls would have felt aggrieved but would have realised an appeal was unlikely to succeed. Sometimes, where a party considers that the judge has got the result very wrong, the prospects of success are enhanced.