Construction and Public Liability

Construction work always carries with it the potential risk of injury or death of a third party and it is accordingly of paramount importance that employers and contractors be made aware of vicarious liability in the event of injury or death of a third party arising from the action or omission of their employees or subcontractors. We will briefly highlight the nature of vicarious liability by referring to case law and how to manage and mitigate such liability.

Vicarious liability in the context of construction was addressed in the 1990 Supreme Court of Appeal decision of Langley Fox Building Partnership (Pty) Ltd (Appellant) v De Valence (Respondent) where the Respondent instituted legal action against the Appellant, the main contractor on a construction site, for damages arising as a result of an injury sustained when her head struck a wooden beam suspended across the sidewalk on which she was walking.

The Appellant’s scope of work included the installation of a ceiling under an overhead canopy which extended over the sidewalk at the entrance to the building where the work was being performed. A subcontractor was mandated by the Appellant to install the ceiling and it was during this process that Mrs Langley sustained her head injury. The subcontractor erected a wooden beam underneath the canopy, but failed to adequately place warning signs at the surrounding area of the beam, alternatively to restrict access around the beam.

The court found the Appellant to be negligent, notwithstanding the fact that the subcontractor erected the beam. It was found that the Appellant should reasonably have foreseen the risk of danger to pedestrians as a result of the work carried out by the subcontractor since an obstruction of this nature on a busy sidewalk would necessarily have created a likely danger for pedestrians using the sidewalk. In light of the fact that the danger was reasonably foreseeable the Court considered whether the Appellant should have taken preventative steps to guard against possible injury to a third party and the Court found that the Appellant made an error to leave the situation in the hands of the subcontractor and had a duty to take adequate steps to protect the public against the imminent danger.

In order to determine whether an employer and in this instance the main contractor could be held liable for the acts of an employee or subcontractor, the Court established a test based on three broad questions:

1.1. Would a reasonable man have foreseen the risk of danger in consequence of the work he employed the subcontractor to perform? If so,

1.2. Would a reasonable man have taken steps to guard against the danger? And, if so,

1.3. Were such steps duly taken?

Accordingly, using the above three questions, an employer may be held liable for the consequences of a subcontractor where such contractor fails to take the necessary steps to prevent harm to the public and actual harm occurs. Courts may also take other factors into consideration, such as the nature of the danger, the context in which the danger could arise, the degree of expertise available to the employer and subcontractor respectively and the means available to the employer to avoid probable danger.

Appropriate public liability insurance is a vital requirement for any main contractor involved in construction projects. Moreover, to further limit the effects of vicarious liability, it is essential that employers and their subcontractors conclude appropriate agreements which determine who is responsible to carry the risk of injury or death to a third party. These agreements normally take the form of a subcontractor or service agreement and contracting parties should ensure that the following aspects are dealt with in such agreements:

2.1. the agreement must be clear that the subcontracted works are provided independently from the main contractor;
2.2. the agreement must clearly state that there is no requirement of supervision or control by the main contractor over the subcontractor;
2.3. the duration of the agreement must be for a fixed or determinable period;
2.4. the subcontractor must contractually accept responsibility for the negligent acts of its employees;
2.5. the agreement must contain a proper indemnity clause;
2.6. the agreement can provide for public liability insurance;
2.7. the agreement can provide for specific health and safety requirements.

These are just some of the most important aspects that should be considered for inclusion in subcontractor agreements. Having regard to the sometime irreversible and substantial impact that injury or death to a third party can hold, it is imperative that contractors mitigate their risk exposure through appropriate insurance strategies and clear subcontracting arrangements that allocate risk appropriately.

by
Francois van Zyl
francois@dyason.co.za