Date: Tue, 11 Oct 2005 09:22:21 -0400

From: David Cheifetz

Subject: Two employers

Andrew,

If followed, the Viasystems decision will create a pretty problem, in the 1 employee 2 employers situation, for any jurisdiction in which the application of apportionment legislation requires that there be 2 or more persons at fault for the damage (or damages), provided the judges remember that vicarious liability doesn't impute the employee's fault to the employer. I am aware of Canadian cases that say the vicariously liable person(s) cannot be the additional person(s) required to trigger the legislation.

Assuming those jurisdictions follow the Viasystems analysis and opt for the possibility of dual vicarious liability, the judges will then have to create an analogous common law right of contribution. I'm sure the judges will do as good a job of clarifying the law, in this new area, as they have for statutory contribution rights.

The situation will create yet another conundrum for jurisdictions that limit their apportionment legislation to tort. We can anticipate a situation where, for whatever reason, the injured person has sued just one of the two employers. One obvious explanation is that only one of the two employers has insurance. In the subsequent contribution claim, the contribution defendant might argue that the apportionment legislation is exhaustive as to when contribution is available in respect of tort claims. The astute judge might respond that the legislation is exhaustive only in respect of the situations where there are 2 or more tortfeasors.

For jurisdictions where these types of statutory contribution lacunae exist, one route around the problem, where the facts permit, would be to conclude that both employers are liable to the injured person for breach of the same contract or separate contracts, and adopt the appropriate analysis leading to contribution rights between the employers. Or imply an obligation to contribute into the arrangement between the employers, assuming that isn't precluded by the terms of their arrangement.

A UE based rationale shouldn't be all that difficult to find given that employer 2 benefits from the fact that employer 1 has paid some or all of the damages.

Regards,

David

____________________
David Cheifetz
Bennett Best Burn LLP
Toronto, Canada

----- Original Message -----
From: Andrew Tettenborn
Sent: Tuesday, October 11, 2005 5:04 AM
Subject: ODG: two employers

A generation or two of lawyers have paid the school fees arguing when an employee is transferred, for the purposes of vicarious liability, under the Mersey Docks case. The CA has now, to some extent, short-circuited the process. In Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd & Ors [2005] EWCA Civ 1151 (10 October 2005) some idiot of a fitter flooded a factory when he inadvertently interfered with the sprinkler system. He was employed by X, who had themselves been engaged on a labour-only basis by Y. The judge held that X were liable but Y weren't, effectively applying Mersey Docks. The CA, overturning a long-standing assumption, said "why shouldn't 2 people both count as employers?" and held both X and Y liable, with equal contribution from each. Equal because X and Y were personally without fault and there was no other sensible solution.

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