Legal Principles and Key Points
- In the case of Century Insurance v NI Transport Board  AC 509, the House of Lords ruled that not every activity conducted in the course of employment contributes to vicarious liability.
- This case concerned vicarious liability and employment contracts.
Facts of the Case
- The third party driver created an explosion as the cigarette touched the ground where petrol was spilled from a lorry tank.
- In this appeal, C claimed that D was responsible for the actions of the driver on the grounds of vicarious liability (based on the employer-employee relationship).
- Is D vicariously liable to C?
Held by House of Lords
- Appeal dismissed – the driver’s negligence cannot be attributed to his employer hence there is no vicarious liability.
- “Most cases can be explained on the basis of there being an understanding that the man is to obey the directions of the person with whom the employer has a contract, so far as is necessary or convenient for the purpose of carrying out the contract. Where that is the position, the man who receives directions from the other person does not receive them as a servant of that person, but receives them as servant of his employer. Where the contract is a running contract, for the rendering of certain services over a period of time, the places where, and the times at which, the services are to be performed being left to the discretion (subject to any contractual limitations) of the other contracting party, there must be someone who is to receive the directions as to performance from the other party, and they are given to the employer, whether he receives them personally or by a clerk or by the servant who is actually sent to do the work. That I think is the position here.”
- The third party worker lit his cigarette “for his own comfort and convenience and at least, generally speaking, not for his employer’s benefit.”
- “That last condition, however, is no longer essential to fix liability on the employer (Lloyd v Grace Smith & Co  AC 716). Nor is such an act prima facie negligent. It is in itself both innocent and harmless. The negligence is to be found by considering the time when and the circumstances in which the match is struck and thrown down. The duty of the workman to his employer is so to conduct himself in doing his work as not negligently to cause damage either to the employer himself or his property or to third persons or their property, and thus to impose the same liability on the employer as if he had been doing the work himself and committed the negligent act.”