Personal injury update

The last few months have seen the courts seeking to re-examine tortious concepts
in some cases, for instance when establishing liability against a parent company. The recent case of Thompson v The Renwick Group Plc EWCA Civ 635 [2014] is such an example.

The claimant (T) worked for a haulage company called Arthur Wood & Co (Transport) Ltd (A) from 1969 until around 1978. A became a subsidiary
of the defendant (R) in 1975. Only a handful of subsidiaries in R’s group were involved in haulage and transport, with the others engaged in other unrelated activities.

T was employed as a labourer and was required
to unload raw asbestos from containers, which caused him to be exposed to substantial quantities of asbestos dust. In fact, the Court
of Appeal considered the conditions in which
he worked quite shocking. As a result, he later developed severe lung disease which left him seriously incapacitated.

As is commonly the case given the passage
of time, A did not have sufficient assets to satisfy T’s claim, nor was there any employer’s liability insurance available to provide indemnity. This meant T had no option but to sue R, contending it owed him a direct duty of care.

Among others, T argued the following:

• that R appointed an individual who was involved in the day-to-day running and oversaw the health and safety aspects of A’s operations;
• the paperwork utilised by A, as well as a delivery vehicle with which T was provided, bore the parent company’s name; and
• there was some intermingling of business operations between A and some other subsidiaries (who were also engaged in haulage) in the group.

In deciding whether R was liable, reference was made to Lady Justice Arden’s dicta and the test
for establishing liability against a parent as set
out in Chandler v Cape Plc [2012] 1 WLR 3111.

Parallels with Chandler

With regards to the first of T’s contentions, the Court of Appeal could not find any evidence to show the relevant individual was either employed by or had any significant involvement with R.
It appears T sought to draw parallels with the role
of the chief medical officer in Chandler. However, this officer had a close connection with both companies. The main significance of this is that
it shows knowledge (and in particular knowledge
of the relevant health and safety aspects of the subsidiary) can be imputed to the parent company. It is not necessary that this individual is either employed or a director of both companies, but there needs to be some form of close involvement with both.

The Court of Appeal found T’s other contentions unconvincing and in fact considered T’s case to
be quite far removed from the facts of Chandler.

With regards to Renwick’s name being displayed on the company vehicle and the subsidiary’s paperwork, it was not entirely clear whether this referred to R or another haulage company within the same group which bore the Renwick name.
As concerns, the merging of businesses, the Court
of Appeal considered this just showed that the haulage companies (as distinct from the rest of
the group and in particular R) were able to operate as a separate unit.

The Court of Appeal found that apart from holding shares in the subsidiary, R appeared
to not have any significant involvement in the haulage business undertaken by A and, in particular, its involvement in handling and transporting asbestos materials. They therefore lacked the ‘superior knowledge’
that was found to exist against Cape in Chandler.

As such, T failed to succeed in establishing
that R owed him a duty of care.

It is clear this case failed on its own individual facts. The principle and test as set out in Chandler remains. Therefore, parent companies remain exposed to the risk of claims being advanced directly against them if their corporate structure
is such as to warrant imposing a duty of care.
The courts will look for evidence to show, among others, that it has a close relationship with its subsidiary and has knowledge of relevant
health and safety matters. A wide variety of circumstances and facts would be considered in determining whether a duty should exist. Therefore, the absence of any single material fact (such as having a shared employee) would not preclude a claim if other relevant factors exist. As highlighted in this case, Arden LJ’s test is more ‘descriptive’ rather than ‘exhaustive’.

Ex turpi causa

Moving away from parent company liability, Beaumont & O’Neill v Ferrer [2014] EWHC 2398 (QB) provided some further interesting discussion on
the topic of ex turpi causa.

The two claimants (B and O) sustained serious injuries when they attempted to jump out of
a taxi, which was driven by the defendant (F),
while it was moving.

B and O, both aged 17 at the time, had formulated a plan with four other teenagers to take a ride in a taxi and then subsequently, upon reaching the destination, run off without making payment. When the taxi neared the destination, three of the teenagers got out and ran away.
F then started to drive off, but shortly after he did
so, both B and O (within seconds of each other) jumped out causing themselves serious injuries.

Defendant’s irrational actions

F had been attacked and stabbed by a group
of youths he was transporting in his taxi approximately a year before this incident.
He claimed this experience caused him to panic
on this occasion, which is the reason he drove off. While he accepted that he was potentially placing himself at further risk by not allowing the remaining youths to run away, he said his actions were irrational as they were driven by fear.

While the court accepted this was a factor determining his actions, the court also considered he was understandably angered by the youths
and their intention to commit a criminal offence. Therefore, F possibly also had the intention of driving the remaining youths to the nearest
police station.

However, it was considered that in driving off did not cause the accident. Therefore, even if
F had been wrong in deciding to drive away,
the chain of causation between F’s fault and the claimants’ injuries was broken because instead of
B and O opting to stay in the taxi, they decided to jump out. This was to further their plan of seeking
to avoid paying the taxi fare.

While it appears this was sufficient to dismiss
B and O’s claims, the court went on to consider the doctrine of ex turpi causa.

It was clear that B and O were in the process of committing a criminal act and that their injuries arose as a direct result of it. This was not a situation where the criminal conduct was incidental to or set the scene for the defendant’s negligence, but directly attributable to it.

Therefore, it was considered the claimants would also be prevented from making a claim
on these policy grounds.

While this decision may appear to be a just application of the public policy doctrine, it should be noted that B and O sustained severe life-changing injuries. The claimants’ representatives sought to argue that the extent of criminality was not proportional to the defendant’s conduct. While this may appear an interesting argument,
it is clear from Joyce v O’Brien [2012] EWHC 1324 (QBD) and others that proportionality is not a relevant consideration.

It is clear therefore that the court will readily apply this doctrine in cases involving a wide variety of criminal conduct, however minor. SJ