Hawley v Luminar Leisure Ltd & Ors

This is the judgment of the court to which all members have contributed. There are before us 2 appeals one brought by Luminar Leisure Ltd (“Luminar”) and the other brought by David Preston Mann on behalf of Faraday Underwriting Ltd (“the Insurers”) against the decision of Wilkie J. delivered on 10^th January 2005.

Luminar own and operate a number of clubs throughout the UK. They contracted with ASE Security Services Ltd (“ASE”) for “the provision of security services” at the Chicago Rock Café in Southend on Sea. ASE have gone into liquidation and have no assets. However, they do have the benefit of a public liability insurance policy with the Insurers described as a “Combined Liability Insurance for the Security Industry”.

The relevant contract between Luminar and ASE as far as these appeals are concerned is dated November 1996. That contract (“the agreement”) provided for the supply of doormen or stewards now known as “door supervisors”. One of the doormen was a man called Jeffery Warren. He worked at the Rock Café from 1998.

In February 1998 he applied for registration under a Door Supervision Registration Scheme operated by Southend Borough Council (“the Council”). The Council discovered that he had previously been registered with Basildon Borough Council but his registration had been revoked. Southend satisfied itself that there was no bar to his being registered with them and informed Mr Warren that he could proceed with his application provided he attended the necessary training course provided by them. Mr Warren failed to pursue his registration but led ASE to believe he was registered and sported an identification badge to prove it.

In the early hours of the 18^th August 2000 there was an incident outside the club. Three doormen including Mr Warren went to deal with it. He approached the claimant Mr Hawley who was standing nearby. Despite Mr Hawley’s attempt to show he wanted no trouble Mr Warren punched him so hard to the face that he fell to the ground. Mr Hawley suffered a fractured nose and jaw from the punch and a fractured skull from the fall. He required major surgery and sadly, despite the best efforts of the doctors, he has suffered permanent and serious brain damage. In the course of the police investigation into the incident it became apparent that Mr Warren had been using either a forged identification badge or one belonging to another.

On 30th April 2001 Mr Warren was convicted by a jury of causing grievous bodily harm to the Claimant contrary to section 20 of the Offences Against the Person Act 1861. Apart from a spent conviction on his record this is the only conviction to have come to light.

The Claimant sued Luminar and ASE on the basis that they were “each responsible” for Mr Warren’s tortious and deliberate act. He sued ASE as Mr Warren’s employer in master and servant terms and Luminar on the basis they were his “temporary deemed employer” in accordance with the principles laid down in the well known case of Mersey Docks Harbour Board v Coggins and Griffith [1947] AC 1. In essence, the Claimant alleged that both Luminar and ASE negligently failed to train and or supervise Mr Warren properly, failed to check that Mr Warren was properly registered with the local authority, and failed to carry out a proper investigation into whether he was a suitable person to be employed as a doorman.

Because ASE had gone into liquidation in 2002 they played no part in the litigation. In default of their serving a Defence, Master Foster entered judgment against them on 12^th June 2003. He ordered that ASE should pay the Claimant “an amount which the court will decide and costs”. ASE’s insurance policy (“the policy”) covered inter alia: legal liability for damages and reasonable costs and expenses arising from “accidental bodily injury to any person”. The Insurers declined to indemnify ASE. The Claimant sought a declaration, therefore, that he could recover under the terms of the policy; hence Mr Mann’s arrival on the scene as the Third Defendant.

At trial, it was conceded that Mr Warren was acting in the course of his employment and the issues narrowed to the extent that Wilkie J. had to rule upon just two, namely:

At that time all parties operated on the basis that only one of the Defendants could be held vicariously liable for Mr Warren’s act. Wilkie J. held that Luminar were vicariously liable. He found on the facts that they had sufficient control over ASE’s employees so as to make them “temporary deemed employees” of Luminar, at least for present purposes. He gave judgment against them. He also found that Mr Hawley’s bodily injury was “accidental” within the meaning of the policy, notwithstanding his finding that Mr Warren deliberately punched the claimant intending to do him serious harm. Accordingly, he granted a declaration that the Insurers were liable to indemnify ASE for any damages and costs awarded to the Claimant against ASE and to pay the Claimant pursuant to section 1 (1) of the Third Parties (Rights Against Insurers) Act 1930 any such damages and costs as assessed.

In relation to Luminar’s claim against ASE for a contribution pursuant to the Civil Liability (Contribution) Act 1978 he assessed ASE’s contribution at nil.

Invited at the eleventh hour by Mr Jeremy Stuart-Smith QC, on behalf of the Insurers, to consider setting aside the default judgment against ASE he declined to do so.

On behalf of Luminar, Mr Derek Sweeting QC sought to overturn the judges finding that they were vicariously liable as a “temporary deemed employer”. He submitted that the judge applied the correct test following Mersey Docks but failed to apply it appropriately to the facts of this case. Mr Sweeting’s primary submission was that ASE alone should be held liable for the acts of Mr Warren.

He argued that the general employer must establish quite exceptional circumstances to transfer control from them to a “temporary deemed employer”, which on the facts of this case did not exist. Luminar and ASE were independent commercial organisations. Luminar are recognised as a “conscientious contributor to the establishment of high standards concerning security”. ASE were engaged as a “specialist independent contractor” to provide trained and licensed door staff. ASE remained Mr Warren’s general employer throughout. Luminar’s manager may have given precise instructions to ASE’s employees coming on to their premises as to when and where their work was to be carried out, but this is by no means unusual. Even if the court concluded that Luminar controlled the task ASE had to perform by telling ASE’s employees where they should stand, which customers should be admitted and which rejected, this does not mean that Luminar also controlled the method by which ASE’s employees carried out their work. This, he submitted, is the test as laid down in Mersey Docks (see the speech of Lord Porter at page 12). It was not open to the judge, therefore, to find on the facts of this case that ASE had discharged the heavy burden upon them to show that Luminar should be held vicariously liable for the acts of ASE’s employee.

In the alternative, given the recent judgment in Viasystems (Tyneside) Limited v Thermal Transfers (Northern) Limited [2005] EWCA Civ 1151 handed down on 10^th October 2005, Mr Sweeting submitted this court should find, as it is empowered to do, that both Luminar and ASE were vicariously liable for Mr Warren’s behaviour. He sought permission to amend his appeal notice to this effect; an application we grant.

Mr Sweeting also attacked the judge’s finding of a nil contribution against ASE under the Civil Liability Act 1978. Having persuaded Wilkie J, in the face of opposition from Mr Stuart Smith, to embark upon an assessment, he took exception to the result. He argued that ASE breached their warranty to Luminar that their employees were suitable people to act as doormen. They failed to check Warren’s credentials. Had they done so, they would have found he was dishonest, unregistered and, therefore, unsuitable. They would not have employed him and he would not have been in a position to assault the claimant. Their negligence was, therefore, an effective cause of the damage suffered. Mr Sweeting argued that the finding of nil contribution could not stand alongside the default judgment. If it did it produced a “bizarre result”.

Below, Mr Sweeting submitted that following the judge’s finding that Luminar were vicariously liable on a strict liability basis, the default judgment against ASE must mean that ASE were 100 % liable for Mr Hawley’s injuries and the court should make a 100% contribution against them. Before us, and with the knowledge that dual vicarious liability is now a legal possibility, he was more modest in his ambition. However, he maintained his argument that ASE’s fault and therefore contribution to the damage was more than just negligible as the judge found.

Mr Stuart-Smith QC sought to uphold Wilkie J’s decision that Luminar were vicariously liable for the actions of Mr Warren and that ASE’s contribution should be assessed at nil. Further, he argued that the judge’s refusal to set aside the default judgment was inconsistent with his finding of a nil contribution and we should set it aside ourselves of our own motion. He accepted that the decision in Viasystems could have an effect on this aspect of the case. If we were against his primary submission that Luminar, and Luminar alone, were vicariously liable for Mr Warren’s acts he invited us to remit the case to the judge for further findings. Lastly, he sought to overturn the judge’s ruling that Mr Hawley was entitled to a declaration that the insurers were liable to indemnify ASE pursuant to the insurance policy and to pay him any sum he is awarded against ASE.

Mr John Foy QC (who did not appear below) also sought to uphold the judge’s finding of vicarious liability against Luminar. However, he supported Mr Sweeting’s submissions as to the evidence of direct and causative negligence on the part of ASE and his alternative submission as to a possible finding of dual vicarious liability against both Luminar and ASE.

Mr Foy submitted that although a very extensive transfer of control has taken place here, ASE’s area manager and their head doorman on duty had a coexistent duty to control Mr Warren’s conduct. He reminded us of the terms of the doorman’s job description and the contractual provisions whereby ASE accepted liability for the default of their staff. There was therefore, he argued, a residual obligation on ASE’s part to intervene and control Mr Warren. Further, adopting the approach of Rix LJ in Viasystems,ASE were responsible for selecting and training Mr Warren. ASE was his employer. ASE hired out his services as an integral part of their business. The fact that he was employed at a temporary employer’s site and subject to a temporary employer’s directions should not relieve ASE of all responsibility. It should be shared.

He justified the judge’s refusal to set aside the default judgment against ASE on a number of bases. First, if he succeeded in persuading us that the Viasystems principle of dual vicarious liability should be applied to the facts of this case, that in itself would justify not setting aside the default judgment. Mr Stuart-Smith invited the judge to set judgment aside on the basis that only one employer could be held vicariously liable. As this court can find both ASE and Luminar vicariously liable, the default judgment can stand even if there was insufficient evidence of direct negligence.

In any event, he reminded the court that the case against ASE was put on the basis of both direct and vicarious liability. No trial of these issues was necessary because the Claimant had the comfort of the default judgment which had not been appealed and no application made to set it aside. The trial on liability was conducted on that basis. It is now too late to attempt to set to aside.

He reminded us that Mr Stuart-Smith’s informal application to set the judgment aside came as a side wind to the judge’s findings in the contribution proceedings. The fact that the judge assessed ASE’s contribution as nil as between the defendants could not affect the claimant’s position. Further, he argued that the Insurers have never attempted to comply with the provisions of the CPR in relation to the setting aside of default judgments.

Lastly, he argued that for the reasons given by the learned judge the contract of insurance should be construed so as to include the damage suffered by the Claimant even if Mr Warren’s blow was deliberate and not accidental as far as he was concerned.

Thus the issues for this court are as follows:

In Viasystems both May and Rix LJJ. provided a comprehensive review of the law of vicarious liability. At paragraphs 6 and 7 of the judgment May LJ. set out the facts of and principles to be derived from Mersey Docks.

“6.

The leading relevant authority is Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Limited [1947] AC 1, which the judge considered with other authorities. This was a case in which someone was injured by a negligently driven crane. The crane had been let by the Harbour Board to a firm of stevedores for loading a ship, together with the crane driver who was employed by the Harbour Board. The stevedores had immediate control of the relevant operation which the crane was performing, but had no power to direct how the crane driver should control the crane. The House of Lords upheld decisions of lower courts that the Harbour Board, being the crane driver's general employer, retained responsibility for his negligence.

7.

The opinions make clear that decisions of this kind depend on the particular facts and that many factors may bear on the result (Lord Porter at 17). In assessing the facts, certain considerations will or may be relevant. These include:

(a)

the burden of showing that responsibility does not remain with the general employer is on the general employer and is a heavy one (Lord Simon at 10, Lord MacMillan at 13, Lord Uthwatt at 21).

(b)

by whom is the negligent employee engaged? Who pays him? Who has power to dismiss him (Lord Simon at 10)? In the present case the answer to these questions is the general employer the third defendants.

(c)

who has the immediate direction and control of the relevant work (Lord Simon at 10, Lord Porter at 16)? Who is entitled to tell the employee the way in which he is to do the work upon which he is engaged (Lord Porter at 16, Lord Uthwatt at 23)? "The proper test is whether or not the hirer had authority to control the manner of execution of the act in question. Given the existence of that authority its exercise or non-exercise on the occasion of the doing the act is irrelevant" (Lord Uthwatt at 23).

(d)

the inquiry should concentrate on the relevant negligent act, and then ask whose responsibility it was to prevent it. (Lord Simon at 10,11). In the Mersey Docks case, the stevedores had no responsibility for the way in which the crane driver drove his crane, and it was this which caused the accident (Lord Simon at 12, Lord MacMillan at 13, Lord Simonds at 18). The ultimate question may be, not what specific orders or whether any specific orders were given, but who is entitled to give the orders as to how the work should be done (Lord Porter at 17).

(e)

a transfer of services can only be effected with the employee's consent (Lord Porter at 15, Lord Uthwatt at 21).

(f)

responsibility should lie with the master in whose act some degree of fault, though remote, may be found (Lord Simonds at 18).”

Further guidance is to be found in the speech of Lord Millett in Dubai Aluminium Co Ltd v Salam and Others [2002] UKHL 48 [2003] 2 AC 366 at paragraph 107 where he said:

“Vicarious liability is a loss distribution device based on grounds of social and economic policy. Its rationale limits the employer’s liability to conduct occurring in the course of the employee’s employment. “The master ought to be liable for all those torts which can fairly be regarded as reasonably incidental risks to the type of business he carries on…..the ultimate question is whether or not it is just that the loss resulting from the servant’s acts should be considered as one of the normal risks to be borne by the business in which the servant is employed.”

Thus, the decision as to whether or not an employee remains an employee of the general employer for the purposes of vicarious liability or whether he is deemed to be the temporary employee of the hirer of his services very much turns on the facts of the individual case. The burden of showing that responsibility has moved to a temporary employer rests on the general employer and is a heavy one. The inquiry should focus on the negligent act and the court should ask itself whose duty it was to prevent that act. A number of other factors may be relevant to which we shall return when we deal with the facts of this case.

In Viasystems May and Rix LJJ. held that the assumption that dual vicarious liability was a legal impossibility was wrong. They held that, again very much depending on the facts of the case, a judge may be entitled to find more than one set of employers liable. The facts of Viasystems can be stated shortly and are conveniently set out at paragraphs 3 to 5 of the judgment of May LJ:

“3.

In July 1998, the claimants engaged the first defendants to install air conditioning in their factory. The first defendants subcontracted ducting work to the second defendants. The second defendants contracted with the third defendants to provide fitters and fitters' mates on a labour only basis. One such fitter was Mr Megson. His mate was Darren Strang. They were installing the ductwork under the instruction or supervision of Mr Horsley, a self-employed fitter contracted to the second defendants. Both Mr Megson and Darren Strang were thus employed by the third defendants.

4.

At the time of the accident, the men were working in a roof space. Access was by crawling boards using the roof purlins. Mr Megson needed some fittings and sent Darren Strang to get them. Darren was away for a few minutes, during which Mr Horsley was helping Mr Megson with the ducting. Mr Horsley naturally expected Darren to return by a sensible route, but he did not so return. On the contrary, he attempted to return by crawling through some sections of ducting that were in place. These moved and came into contact with part of a fire protection sprinkler system. The relevant part of this system fractured – hence the flood. The judge had no difficulty in finding that Darren was negligent, as he obviously was.

5.

It was the third defendants' case before the judge that Darren Strang did what he did on the express instruction of Mr Horsley. The judge rejected this and there is no appeal against this finding. Indeed the third defendants now accept the judge's primary findings of fact.”

At paragraphs 46 and 47 May LJ. held:

“In summary, therefore, there has been a long-standing assumption, technically unsupported by authority binding this court, that a finding of dual vicarious liability is not legally permissible. An assumption of such antiquity should not lightly be brushed aside, but the contrary has scarcely been argued and never considered in depth. This is not surprising, because in many, perhaps most, factual situations, a proper application of the Mersey Docks principles would not yield dual control, as it so plainly does in the present case. I am sceptical whether any of the cases from this jurisdiction which I have considered would, if they were re-examined, yield dual vicarious liability. Even Mileham is not transparent.

47.

I conclude below in considering contribution that, if the relevant relationships yield dual control, it is highly likely at least that the measure of control will be equal. An equal measure of control will not often arise. Dual vicarious liability is most unlikely to be a possibility if one of the candidates for such liability is also personally at fault. It would be entirely redundant, if both were.”

At paragraph 49 he observed:

“If, on the facts of a particular case, the core question is who was entitled, and in theory obliged, to control the employee's relevant negligent act so as to prevent it, there will be some cases in which the sensible answer would be each of two "employers". The present is such a case.”

Rix LJ. appears to have adopted a slightly different approach. At paragraphs 78 and 79 he said this:

“78.

The remaining question is to attempt to define the circumstances in which the liability should be dual. It is possible that where the right to control the method of performance of the employee's duties lies solely on the one side or the other, then the responsibility similarly lies on the same side. That reflects the significance of Lord Esher's doctrine of entire and absolute control. If so, then it will only be where the right of control is shared that vicarious liability can be dual. I would agree that the balance of authority is in favour of this solution. On this basis, I agree with Lord Justice May's analysis of the facts in this case as demonstrating a situation of shared control. I would go further and say that it is a situation of shared control where it is just for both employers to share a dual vicarious liability. The relevant employee, Darren, was both part of the temporary employer's team, under the supervision of Mr Horsley, and part of the general employer's small hired squad, under the supervision of its Mr Megson.

79.

However, I am a little sceptical that the doctrine of dual vicarious liability is to be wholly equated with the question of control. I can see that, where the assumption is that liability has to fall wholly and solely on the one side or the other, then a test of sole right of control has force to it. Even Mersey Docks , however, does not make the control test wholly determinative. Once, however, a doctrine of dual responsibility becomes possible, I am less clear that either the existence of sole right of control or the existence of something less than entire and absolute control necessarily either excludes or respectively invokes the doctrine. Even in the establishment of a formal employer/employee relationship, the right of control has not retained the critical significance it once did. I would prefer to say that I anticipate that subsequent cases may, in various factual circumstances, refine the circumstances in which dual vicarious liability may be imposed. I would hazard, however, the view that what one is looking for is a situation where the employee in question, at any rate for relevant purposes, is so much a part of the work, business or organisation of both employers that it is just to make both employers answer for his negligence. What has to be recalled is that the vicarious liability in question is one which involves no fault on the part of the employer. It is a doctrine designed for the sake of the claimant imposing a liability incurred without fault because the employer is treated by the law as picking up the burden of an organisational or business relationship which he has undertaken for his own benefit.

80.

One is looking therefore for practical and structural considerations. Is the employee, in context, still recognisable as the employee of his general employer and, in addition, to be treated as though he was the employee of the temporary employer as well? Thus in the Mersey Docks situation, it is tempting to think that liability will not be shared: the employee is used, for a limited time, in his general employer's own sphere of operations, operating his general employer's crane, exercising his own discretion as a crane driver. Even if the right of control were to some extent shared, as in practice it is almost bound to be, one would hesitate to say that it is a case for dual vicarious liability. One could contrast the situation where the employee is contracted out labour: he is selected and possibly trained by his general employer, hired out by that employer as an integral part of his business, but employed at the temporary employer's site or his customer's site, using the temporary employer's equipment, and subject to the temporary employer's directions. In such a situation, responsibility is likely to be shared. A third situation, where an employee is seconded for a substantial period of time to the temporary employer, to perform a role embedded in that employer's organisation, is likely to result in the sole responsibility of that employer.”

Thus, May LJ. focused the court’s attention on the question of control. He did not envisage a finding of dual vicarious liability in many factual situations. Rix LJ, however, doubted that the doctrine of vicarious liability should depend solely on the question of control and suggests a broader test of “whether or not the employee in question is so much part of the work business or organisation of both employers that it is just to make both employers answer for his negligence” (see paragraph 79).

With those principles and submissions in mind, we turn to the facts of the present case and the evidence called before the judge. Given the attack upon his findings it is necessary to consider in some detail the evidence upon which those findings were based. We turn first to the documentary evidence.

Mr Sweeting placed considerable reliance upon the Regulations and guidance provided for the operation of clubs of this kind. He argued that the contract itself had to be viewed in the light of the obligations of the club as a licence holder and its duty and wish to ensure the observance of best practice as far as security is concerned. He criticised Wilkie J. for failing to give sufficient weight to the constraints upon Luminar, and for failing sufficiently to analyse the purpose and significance of the various contractual provisions and the Regulations. He argued that documents upon which the learned judge placed reliance, for example the Job Descriptions and the doorman’s Code of Conduct, did no more than implement the requirements of others.

In rehearsing the relevant Regulations and the contractual provisions we shall adopt the same course as the judge but in so doing we shall bear in mind Mr Sweeting’s observations. The Council issued general Regulations governing the issue of licenses for places of public entertainment. Clauses 24 to 27 related to security. Clause 26 defined a doorman as a person employed at the licensed premises to undertake any of a series of functions namely to assess the suitability of potential patrons, control their entry, prevent them bringing unlawful substances onto the premises, and maintain public order at the premises. Clause 24(ii) required licensees to maintain a register identifying doormen employed during each session and to make that available to the police or the council. Clause 24(iii) required licensees to ensure, so far is reasonably practicable, that doormen comply with the Council’s Rules of Conduct set out in their doormen registration scheme. Clause 25 required licensees to ensure that they employ a suitable number of appropriate doormen at their premises and that they conduct their duties efficiently. The obligations were all imposed upon the licensees and not on the likes of ASE who supplied doormen to the industry.

The public entertainment licence itself was subject to the standards, terms, restrictions and conditions contained in the Regulations and to such additional conditions as are set out in a schedule. Those additional conditions included:

Mr Sweeting argued that Luminar could only meet these requirements by imposing similar obligations on the staff supplied by ASE by means of the contract. The contract did not represent an attempt by Luminar to win for itself detailed control of the manner in which the task of door supervision was to be carried out.

The fact that the contract and the attached documents mirror to some degree the relevant Codes is hardly surprising given that Mr Dennis, one of Luminar’s founding directors, had been at the forefront of developments in the regulation of doormen for some years and has played a major part in the drafting of the British Standard. He was anxious to ensure that any contract entered into by Luminar reflected the guidance offered in that standard. The Code recommended at 4.1.3 that the “service provider” i.e. any company providing security services to licensed premises should carry out pre employment enquiries to vet the suitability of applicants for jobs as security personnel. “Only suitably skilled” candidates should be recruited. At 5.1 it was recommended that the provider had a “clearly defined training policy” At paragraph 2 of Annex C to the Code the recommended list of duties for a doorman were set out and they were for the most part reflected in the contractual documentation to which we now turn.

The contract between Luminar and ASE was described as an agreement “for the supply of security services”. Clause 1 set out a number of definitions. They included the following:

Clause 2.2 provided that the security organisation would provide their services using reasonable care and skill in accordance with the services schedule and the standards of services. Clause 2.3 provided that “Luminar has the right at any time on giving not less than 24 hours notice to the security organisation to vary the extent or nature of the services and/or the services schedule either on a temporary or permanent basis”. Following receipt of such notice the security organisation was to provide the services according to the services schedule as varied. Clause 2.5 provided that “Luminar has the right at any time on giving notice to the security organisation to amend the standard of services or any part thereof. Following receipt of such notice the security organisation will provide the services according to the amended standard of services and ensure that all stewards are aware of and comply with it.”

By virtue of 4.3 ASE warranted that each door supervisor or steward provided by it would have been thoroughly checked by ASE as being suitable, and would be fully trained by ASE to the standard approved by Luminar; and further the employee would have been fully briefed in and understood the Luminar brand requirements. ASE further warranted that the employee will have been provided with a copy of the standard of services and had accepted it in writing. Clause 4.3.8 stated that the door supervisor must immediately report to the manager of the premises or any other person designated by Luminar details of any incident, accident or injury to or involving any person (however insignificant) occurring at or near the premises of which the steward was aware and must record details of the incident accident or injury in the form required by Luminar.

Clause 5 dealt with uniforms and equipment. It provided, inter alia, that ASE would ensure that all stewards provided by it as part of the services would wear the uniform specified by Luminar whilst on duty.

By virtue of Clause 7 ASE agreed to indemnify Luminar against all liabilities arising from or connected with the provision of their services and arising from the acts or omissions of its stewards in contravention of the terms of the agreement. Luminar also required that ASE take out proper insurance cover.

In addition to a warranty that all their door staff would be employed by them by virtue of Clause 8.1 ASE agreed that “all stewards provided by the security organisation…will be employees of the security organisation and nothing in this agreement will be deemed to render any of them employees, agents or partners of Luminar.” Clause 8 also provided that ASE will be responsible for paying the stewards and will be responsible for all claims made by them in relation to their employment and that ASE will fully indemnify Luminar in respect of any such claims made by ASE stewards against Luminar. Clause 8.6 provided “the security organisation will have discretion as to which stewards are provided to Luminar except that if Luminar does not approve of a particular steward for any reason then the security organisation will ensure that such steward is not provided to Luminar as part of the services. Luminar will not be required to justify or give any reasons either to the security organisation or any steward as to why it does not approve of a particular steward.”

Schedule 1 contained four documents: the contract itself, a job description, health and safety policies, and a stewards’ code of conduct.

According to the job description a doorman was said to be responsible to “head doorman/manager/assistant manager”. References to manager here meant the manager and assistant manager of the club. The manager’s role was “to ensure that the policies of the venue are upheld in respect of admission control, the venue is traded safely in all aspects of customer safety, and adherence to health and safety regulations”. There was a qualification that “this job description is to be read in conjunction with Luminar Leisure’s code of conduct for door stewards”.

The list of job responsibilities was non exhaustive, and we do not intend to rehearse them. Wilkie J. noted “although there are within this list a number of matters which have to be reported to the manager or to management there appears to be no part of the job description which specifically requires the stewards to report to or act on the instructions of the head doorman. In addition there is a sweep up provision which provides that the door steward is required to carry out any other reasonable duties that may be required from time to time.”

Mr Sweeting criticised this passage of the judgment on the basis that the judge has ignored the fact that this is a generic job description for both doormen and head doormen. He reminded us that the Health and Safety Procedures refer to the responsibility of door staff being “under the guidance of the head doorman”. We note that any information on Health and Safety matters, however, had to be reported to the manager of the club. In support of his argument that the judge has erred in his assessment of the “line management” arrangements Mr Sweeting argued that there was other evidence from the witnesses themselves to which we shall come later.

The job description was expressly stated to form part of the door steward’s contract of employment so that any breach of the duties and responsibilities therein may result in disciplinary action or dismissal. The door steward had to sign and acknowledge receipt of the document.

There was then a Code of Conduct governing all doormen “working for Luminar Leisure”. The doorman was instructed to carry out his duties in the following way:

“Always try and resolve conflicts without using force. Force should only be used as a last resort and then only the minimum force necessary to restrain or reject any person. You must never carry or use any weapon in the course of your duty. All incidents in which you are involved must be brought to the attention of the person in charge of the premises without delay. You should control the number of persons admitted to the premises so as to prevent overcrowding, in line with the numbers laid down and as instructed by the licensee or deputy manager. You should give due consideration concerning the admissions of persons suspected of being under age or under the influence of drink or drugs in line with Luminar Leisure policy. Final decisions will always lie with the licensee or with his designated representative.”

This echoed the guidance issued by the security industry in its British Standard which at Annex C paragraph 2 stated that the first duty of the doorman is

“to report to and take direction from the licensee or person in charge of the event being supervised. (Such authority as the door supervisor has is gained through that person.”

In a box headed “IMPORTANT NOTICE” Luminar made it plain that they would not tolerate the abuse of drugs on its premises and any steward found involved with drugs would be “instantly dismissed”. A breach of this policy would constitute a breach of contract on the part of the security organisation.

This job description form too had to be signed by the employee. Wilkie J. noted that as “with the job description, so with the code of conduct, there is nowhere any specific reference to the head doorman having any part to play in the line management of the door supervisor”.

Schedules 2 and 3 set out the schedule of services. It was in the form of a table from Mondays to Sundays identifying the number of doormen and head doormen to be provided on each day and the hours of duty together with the total fee to be charged by ASE. On some days ASE agreed to supply just doormen and no head doorman. We are told that on the days when no head doorman was on duty another doorman who had “understudied” him would step into his shoes.

Although not part of the contract between Luminar and ASE the job description of the manager of the club is also worth noting. Where relevant, it provided that the manager’s responsibilities included “the smooth and efficient running of the venue, through adequate staffing levels, sufficient security and thorough documentation. Clause 5 of her job description was entitled “Security”. It provided as follows:

“You are responsible for the total security of the business premises, its goods, its fixtures, fittings and all monies and valuables entrusted to you. You must comply with all statutory regulations associated with access and egress of the premises, and you must ensure that all nominated staff are properly instructed in the setting, operation of all security equipment and alarms when installed.”

Clause 7 under the heading “Running of premises” provided:

“The premises must be staffed at the agreed levels and operational at the right times as previously indicated, and all business transactions documented in compliance with the instructions.

Staff will be well groomed and the premises clean at all times. Staff uniform, if provided, must be worn. Good hygiene must be meticulously observed by staff in all areas as appropriate…….

You will not permit any act or occurrence which may cause public nuisance or annoyance, or incur any liability whereby the insurance policy/premiums are adversely affected…”

In addition to these documents the judge had before him witness statements from various members of staff at the club and employed by ASE. He heard oral evidence from Mrs O’Brien, who at the relevant time was the manager of the club employed by Luminar, and Mr Pullman, who was the head doorman allocated by ASE to this club.

In her witness statement Mrs O’Brien said as follows:

“Responsibility for organising the team of doormen would rest with the head doorman but I would expect to be consulted where particular doormen were positioned.

It was, for instance, the Luminar policy at that time that there should be two doormen at the main door if possible.

I could ask the head doorman to alter the position where his doormen were on duty, perhaps moving one from the door to another part of the premises.

The head doorman would know that we had to be flexible and he would accept guidance from me as to what my requirements were for any particular function.”

The judge summarised her oral evidence in this way:

“Mrs O’Brien acknowledged that had she been aware of the incident of 18 August she would have undertaken the responsibility to call upon the doormen to get the persons outside to calm down pursuant to her job to ensure compliance with Clause 24(iii) and 25 of the regulations. She acknowledged that if she had any doubts about the suitability of any of the ASE door staff she would suggest different doormen to ASE. She said that she had never needed to do so because she trusted them in the same way as she trusted her own bar staff. She acknowledged that she was performing her functions as manager through the door staff but equally acknowledged that her view would prevail if she disagreed with them for example in a matter concerning admission. It had been drummed into her that she was the manager and that her view should prevail but she never found it necessary because the ASE security staff were “a good team”.”

The effect of her evidence can be encapsulated in this way: when she said: “Jump!” the doormen would jump. Mr Sweeting reminded the court that she had nothing to do with the incident in question. He argued that she considered security to be a separate function over which she exercised merely a supervisory role.

Mr Pullman, the head doorman for this club, said in his witness statement that it was part of his duties to decide the rotas of ASE staff to be on the door in conjunction with his area manager Mr Beckford. A Luminar manager would liaise with him about any particular bookings and they might suggest where the door staff should stand during the course of their duties. As head doorman, it was part of his duties to keep a close check on the numbers of customers admitted to ensure compliance with door regulations. He acknowledged that he took his orders from the Luminar as to when the numbers admitted might alter perhaps for a particular event.

The judge contrasted what Mr Pullman said his witness statement with what he said at trial. In the statement he said that if it became necessary to eject a guest that would be a decision that he or the other members of his team would take and would not involve the Luminar management or staff locally. In cross-examination, however, his evidence was “that he and his staff would respond, if asked to do so by a member of Luminar’s staff, to deal with any customer who was causing trouble and, furthermore, that if he or his staff identified such a customer causing trouble then, before taking any steps concerning that person, the steward would seek the presence of Luminar management before doing so. This evidence was consistent with that of Mrs O’Brien whose evidence was that on occasions she dealt directly with door staff and did not necessarily need to act through the head doorman.” (See paragraph 41 of Wilkie J’s judgment).

Mr Pullman also agreed “that the management at Luminar laid down the dress code, established the code on admission and ejection, had the last word to ensure the smooth running of the establishment, and had primary responsibility. He described himself as part of a team which included himself and the doormen and the other staff at the club including the bar staff. He agreed with the statements of Mrs O’Brien set out in paragraphs 13 – 15 of her witness statement. As far as allocating staff was concerned he drew up the rotas, but if somebody did not attend because they were absent or sick he would arrange for a substitute by contacting his area manager Mr Beckford.”

Mr Sweeting argued that if one compared the contractual documents with what happened on the ground the role of head doorman was more than a titular role. He was an ASE employee and was in the position of foreman to other ASE employees. The other doormen answered directly to him (even if the manager of the club became involved in certain matters). It was the job of the head doorman to ensure that the other doormen performed their key roles such as the restraint of customers effectively and with minimum force. This was what Mr Sweeting described as a “core competence” as far as the job of any doorman was concerned. The Luminar management had no part to play in how they performed this key part of their job.

Mr Dennis has maintained throughout that he considered the provision of security services to the club as a service separate from the general running of the club and one requiring specialist skills. He expected a company like ASE to recruit, vet and train suitably qualified staff. As recorded by the judge he said:

“…it was the avowed aim of the documentation that it should be clear that ASE were providing a specialist service to Luminar even though Luminar was, in statutory terms as licensee, primarily responsible for the matters of security as identified in the regulations and the license conditions. He acknowledged, as was apparent, that one of the purposes of ensuring that, in employment law terms, door staff were employed by ASE and not by Luminar was to make it easier for Luminar to remove instantaneously any door steward with whom they were not content. The device enabling them to do so pursuant to their contractual entitlement with ASE freed them from the constraints of operating a disciplinary policy which would otherwise have constrained their freedom of action had they been the employer of that door steward.” (See paragraph 42 of judgment)

Mr Beckford the area manager for ASE told the judge that Luminar had their own branded uniform, colour coded to distinguish categories of staff. They all worked alongside each other and, as far as a member of the public was concerned, the door stewards would be identified as Luminar staff by virtue of the uniform which they wore.

On the basis of that evidence the judge at paragraph 44 of the judgment found as follows:

“In my judgment having regard both to the contractual documentation, the regulatory documentation and the written and oral evidence of Mrs O’Brien, Mr Pullman and Mr Beckford as to what happened in practice, it is plain that Luminar sought to have, and did exercise detailed control not only over what the door stewards were to do in supplying services but how they were to do it. It is plain that the manager of the club was the person to whom door staff looked and to whose wishes they deferred both in terms of where they should be stationed but also on detailed matters of who should be admitted and what should be done about customers who were proving troublesome. They acknowledged as much in their job description for which they had to sign and in terms of the code of conduct which made it clear that it was the Luminar code that they were operating. In practice, the only freedom which ASE had, and the only role which the head doorman had independent of the detailed control of the club management, was to nominate who should work on a particular night, and who should replace somebody who did not turn up. Where so required, however, ASE had no option but to accept Luminar’s decision that a particular steward should not work at the club either on a particular occasion or permanently and comply with it instantly and without any reason being given. Mr Pullman saw everybody working at the club as operating as a team. Mr Beckford acknowledged that, from the point of view of the public, the door staff were equally part of the Luminar staff as were the bar staff. Mrs O’Brien regarded them all as a team regardless of whether they were door staff supplied by ASE or bar staff supplied by Luminar. The arrangements between Luminar and ASE concerning who was to be the employer of stewards and who should bear, and insure against, the risk of liability to third parties by reason of the conduct of the door stewards, cannot override the clear factual position which vested control over how the door stewards did their job in Luminar club management.

It therefore follows, in my judgment, that the control that Luminar had over ASE’s employees was such as to make them temporary deemed employees of Luminar for the purposes of vicarious liability.

It therefore follows that Luminar is vicariously liable for the conduct of Mr Warren on the 18^th of August and is liable to Mr Hawley for the injuries caused by Mr Warren’s unlawful conduct towards him.”

Mr Sweeting conceded that the test for this court is whether it was open to the judge to find on the facts of this case that Luminar must be deemed to be Mr Warren’s temporary employer for the purposes of vicarious liability. It is not enough for him to establish that another judge might have come to a different conclusion. He sought to overturn inferences which the judge drew from his findings of primary fact. That is a burden which, in our view, despite his best endeavours, he has failed to discharge. We are satisfied that there was sufficient evidence before Wilkie J. to justify his conclusions. We reject the suggestion that he has given too little weight to the factors upon which Mr Sweeting relied. He took them properly into account. He weighed the evidence carefully but he found against Luminar. In our judgment, this was a decision he was fully entitled to reach and one with which this court should not interfere.

Wilkie J. bore very much in mind that ASE employed, paid and had the power to dismiss Mr Warren. The burden of shifting responsibility for his actions was, therefore, a heavy one. But, he found that Luminar, if not the general employer in law acted as if they were in fact and exercised many of the powers of the general employer. We note, for example, the reference in Luminar’s Code of Conduct that a breach of Luminar’s drugs policy would lead to “instant dismissal”, and that Luminar were entitled to have any doorman or head doorman replaced, should they decide he was unsuitable, with no inquiry or justification whatsoever.

This was a contract for the provision of labour only. No complicated machinery was involved and in our view no particularly specialised skills were involved. We accept that the job description and the job itself may have moved on a little from the days when doormen were universally known as “bouncers”. They were employed for their size and muscle, and their function was to supply a formidable presence at the entrance to a club and to calm down and remove troublesome customers when necessary. However, whatever one calls them and whatever their additional duties, the job of a door supervisor or doorman remains, in essence, a fairly basic one, namely keeping the peace. By that observation we do not intend to underestimate the importance of their role in the running of clubs today.

The amount of training required for the role of doorman, however, is bound to be limited and does not seem to have been provided by ASE to any great extent, if at all. For the most part, it seems, such training was provided by the local authority. If ASE provided any continuation training we were not told of its extent. The induction training provided by the Council was neither technical nor intensive. The induction course lasted about a day and a half and included instruction on the registration system, health and safety issues, and criminal law. Only an hour or two were spent on methods of restraint- the so called “core competence” upon which Mr Sweeting focussed a significant part of his submissions.

Restraint may be a “core competence” in the training language of today but that does not in our view make it a particularly specialised skill. It is not the kind of skill required of, for example, the crane driver in the Mersey Docks case. Even if accepted that it is a specialised skill it is not one that Mr Warren was attempting to deploy at the time he assaulted Mr Hawley. Mr Warren made no attempt whatsoever to restrain Mr Hawley: he went outside, straight up to him and punched him.

Sadly, organisations like Luminar are all too familiar with the eruption of this kind of violence at the doors of their clubs be it by their disappointed or aggressive customers or by over enthusiastic door staff. As experts in the field of running clubs Luminar know exactly what is required by way of security for those clubs. Mr Dennis is no doubt very proud of his and the company’s record. They set standards that others follow. Running the clubs in an orderly fashion and providing proper security are at the heart of their operation. If they fail to run their clubs properly they breach their licence. No licence means no business.

Luminar had no need to rely upon ASE’s staff to ensure that security was properly maintained at their club. They were well able to employ and train their own door staff. They did not require the services of a specialist company to provide doormen. They chose to use the services of security organisations partly as a device to get round employment laws which they believed might inhibit their ability properly to control their clubs. Thus, we do not accept, and, more to the point, the Judge was entitled to reject, Mr Sweeting’s argument that by employing the services of ASE, Luminar employed the services of a team of trained specialists upon whose skill and expertise they depended.

We turn to Mr Sweeting’s argument that, although Luminar may have controlled the tasks the doormen had to perform in general terms, they did not control the method of such performance. On any view it was Mr Warren’s misbehaviour in dealing with trouble outside the club that led to Mr Hawley’s injuries. We accept that ASE had undertaken to provide door staff who knew how to behave. Given the judge’s findings on the facts, however, we find it impossible to accept the further argument that responsibility for controlling this kind of behaviour fell to ASE’s staff, their head doorman and the area manager.

The Luminar manager was in overall charge of security. She had much more than a merely supervisory role as far as the ASE employees were concerned. She was in charge of them too. She treated all those employed at the club the same; house employees and ASE employees were all part of her team. All the doormen including the head doorman took their orders from her. When she said jump, they jumped. The head doorman seems to have done virtually nothing without her instructions. His role seems to have been minimal in practice.

Luminar management decided which customers to admit, which to exclude and which to reject. They told the doormen where to stand and when to move. The fact that on this occasion Mrs O’Brien did not get a chance to authorise their involvement outside the club does not detract from the fact that she was in charge of what they did. When the doormen stepped in they knew that they took their authority to act from her. It was Luminar who instructed the doorman not to use force unless absolutely necessary and to use as little force as possible. The manager may not have given express instructions on the mode of restraint to be used but we have no doubt that she would have soon protested had she seen her customers inappropriately manhandled. No doubt she would have invoked Luminar’s powers to have the doorman concerned removed from the club. In any event, as we have already observed, Mr Warren was not attempting to restrain anyone at the time he punched Mr Hawley. He was simply using unnecessary force.

True it is that Luminar had a duty to take all practicable steps to prevent trouble outside the club but it was in their interests to do so. If they failed, it might put their licence at risk. Hence Mrs O’Brien’s evidence that she would have authorised the doormen to become involved had there been time to do so. When Mr Warren went out to deal with the incident he was therefore acting on her implied if not her express authority and he was in breach of his express instructions from Luminar on how to behave. The learned judge found: “Luminar management exercised detailed control not only over what the door stewards did but how they were to do it.” To put it at its lowest, that was a finding which, in our clear view, he was entitled to make.

Thus, the fact that Luminar did not involve themselves in the detail of, or training in, methods of restraint, does not mean that the judge was wrong to find that effective control of the doormen had vested in Luminar. Luminar had control of and responsibility for ASE’s employees in fact and by virtue of the contractual provisions. One cannot ignore the contractual provisions as Mr Sweeting appeared to suggest. They are plainly relevant. The fact that by insisting on the “control provisions” being incorporated into the contract Luminar was complying with their obligations to others cannot, in our view, and in the judge’s view, detract from the reality of the situation.

Further, it appears to us that there can be no doubt that any customer, passer by or police officer seeing the doormen decked out in Luminar uniforms would have assumed they were Luminar staff. In effect this is what they were held out to be. The doormen were not recognisable physically as the employees of ASE. For over 2 years any regular visitor would have seen Warren dressed in Luminar’s uniform working at the club answering to Luminar management on the detail of his job. It was his sole or certainly primary place of employment for that entire period.

For a company like Luminar who have done their best to maintain high standards this may appear to be a harsh result. However, vicarious liability requires no fault on the part of the employer or, in this case, the deemed employer. We are quite satisfied that it was open to the judge on the facts to find that Luminar had become Mr Warren’s deemed employer. Responsibility for Mr Warren’s acts lay, therefore, with Luminar. Accordingly, we reject the appeal against the judge’s finding of vicarious liability on the part of Luminar.

We turn to the question of dual vicarious liability. We accept that in Viasystems, May LJ. and Rix LJ. framed the question to be asked in that connection in somewhat different ways. As we have indicated May LJ. focused on what he called the core question namely “who was entitled and therefore obliged to control the employee’s relevant negligent act so as to prevent it”. Rix LJ. advocated a broader or more flexible test. He suggested one should ask whether the negligent employee is so much part of the work, business or organisation of the employers concerned as to make it just for both to answer for his negligence on a no fault basis. He did not say that the degree of control was irrelevant, far from it. The extent to which an organisation can control another’s employee will obviously be relevant to the question of how much the employee has become embedded in that organisation. Every case is fact specific and many factors may be relevant. The question of control may not be wholly determinative, but, for as long as Mersey Docks remains the authoritative decision on when responsibility for an employee’s tortious acts may pass from a general employer to a “temporary deemed employer”, the question of control remains at the heart of the test to be applied.

Whatever approach one adopts we are not persuaded that on the facts of this case it makes any difference. In our judgment, it would not be appropriate to attribute vicarious liability to both ASE and Luminar. In this case, there has been effectively and substantially a transfer of control and responsibility from ASE to Luminar. The facts of this case are very different from those in Viasystems where a finding of dual liability, if permissible in law, was inevitable on the facts. In Viasystems the first defendants had subcontracted the work to the second defendants and they in turn subcontracted the provision of some of the required labour force to the third defendants. Employees of both companies were working together as fitters and/or fitter’s mates. The negligent fitter’s mate Darren Strang answered to the third defendant’s fitter Mr Megson. He in turn answered to the second defendant’s fitter Mr Horsley. Thus both firms provided men who were actually on the spot entitled and obliged to control the activities of the foolish Mr Strang including the act of crawling through the duct that led to the damage.

On the facts of the present case, the answer to the question “who was entitled and therefore obliged to control Mr Warren’s act so as to prevent it?”, on the judge’s findings, is Luminar. ASE had no immediate or effective control over the activities of Mr Warren. Any general duty of control which the head doorman had to exercise over the other doormen was very much subject to Luminar’s de facto control. If anyone was going to prevent Mr Warren’s behaving badly and this particular act, it was Luminar’s manager. ASE’s sole role seems to have been employing Mr Warren in the first place, providing him as a doorman at the club and paying his wages for as long as Luminar were happy to use his services. If relevant to this question, any training seems to have been left for the most part to others.

Mr Warren may have been paid by ASE and could have been dismissed by them but in all other respects he and his head doorman answered to Luminar for their activities at the club, including the sort of behaviour that led to the damage. ASE’s only right, as the judge found, was to nominate who would turn up on any particular day for duty. But even then they could not send just anyone. Luminar had the last word. In fact, Luminar must have been happy with Mr Warren’s services because he stayed for 2 years. In our view, Mr Warren was seconded to Luminar’s club for so long as Luminar wanted. In such circumstances he had become embedded in Luminar’s organisation and, therefore, fits the third situation envisaged by Rix LJ. in the concluding words of paragraph 80 of his judgment in the Viasystems case. He was no longer recognisable as an employee of ASE. If, therefore, the question to be answered is whether Mr Warren was so much part of the work business or organisation of both employers that it is just to make both answer for his negligence the answer on the facts of this case must be no.

Thus, although the law now apparently entitles this court to make a finding of dual vicarious liability for the reasons given we decline to do so.

The relevant provisions of the Civil Liability (Contribution Act) 1978 are as follows: Section 1 (1) provides:

“… any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).

Section 2 provides that the amount of recoverable contribution shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question.”

Mr Sweeting conceded as he must that the judge applied the correct test according to the Act and so the sole question for us is whether or not it was open to him, on the evidence, and as between the defendants to describe the fault of the second defendants as “negligible”. Here too, we find against Luminar. Many of the reasons for so doing have already been rehearsed during the course of this judgment but we repeat them in summary form under this heading.

We remind ourselves, as Wilkie J. properly reminded himself, that the lack of fault of a person vicariously liable for the wrongful act of his employee is not relevant for the purposes of determining contribution proceedings between that person and another wrongdoer (see the decision of the House of Lords in Dubai Aluminium Co Ltd v Salam op cit). Luminar must stand in the shoes of their deemed employee Warren and the judge was obliged to assess the responsibility for the fateful blow as between Warren and ASE his general employer.

As Wilkie J. observed ASE’s failing was in not making proper enquiries at the time they first employed Mr Warren. That was far removed from the incident itself. ASE’s only role was to organise their rosters and arrange for doormen to report for duty at the club. If Luminar took against any particular doorman ASE was responsible for replacing him. That was the extent of their responsibility apart from paying him. During the 2 year period that Mr Warren had worked at the club under Luminar’s direction nothing had occurred to alert ASE to any proclivity he may have to unprovoked violence. The role of the head doorman as the judge found was limited. There was nothing that ASE could have done on that fateful night to control his behaviour and it was his behaviour that night which was the cause of the injuries. As between Mr Warren and ASE the blame lay fairly and squarely at Mr Warren’s door.

Thus, it was open to the judge to find that, as between the defendants, ASE’s negligence had a negligible causative effect. Accordingly, we reject the attack upon the judge’s finding of a nil contribution against ASE which in any event, as he observed, was not an end of the matter between ASE and Luminar, the former owing the latter a full contractual indemnity.

We can deal with this point relatively shortly. The invitation to set aside the default judgment of the court’s own motion was based on the argument that the judgment was inconsistent with the findings of vicarious liability against Luminar only and the finding that ASE’s contribution to Luminar under the 1978 Act should be nil. However, the learned judge made it absolutely plain that his finding of a nil contribution was as between ASE and Luminar. It was not intended to have any impact upon the default judgment which was entered for the Claimant against ASE.

Quite apart from this, we accept the force of Mr Foy’s submissions that this invitation simply came far too late. There is not, even now, a proper application to set aside the judgment. None has ever been made. There has been no attempt to comply with the provisions of the CPR, for example, no evidence has been filed. But far more importantly in our view, the trial on liability proceeded on the basis that there was no issue as to ASE’s liability. The Claimant’s legal representatives acted on the basis they were secure in the knowledge he always had the default judgment against ASE to fall back on. Counsel may well have conducted matters differently had he known of the present application. We are satisfied, therefore, that even if the result is “bizarre” as it was described, it is not appropriate or in the interests of justice to permit the Insurers to re-open the issue now.

Finally we turn to the construction of the insurance policy (“the policy”) entered into between ASE and the underwriters represented by Mr David Mann, the third Defendant. It described itself as a “Combined Liability Insurance for the Security Industry”. In the schedule to the policy (“the schedule”), ASE were named as the assured, and its “type of business” was described as “security guards including door supervisors”. Part B of the schedule was headed “The Insurance” and it provided that ASE as “the assured” were to be “entitled to such of the following insurances as are specified”.

The centrally relevant provision was in paragraph B2 which was headed “public liability”. It was in these terms, so far as relevant:

“…Underwriters will indemnify the assured against legal liability for damages and reasonable costs and expenses arising from accidental bodily injury to any person or for accidental loss of or damage to property occurring during the period of insurance…”

The expression “accidental bodily injury” has to be construed by reference to the definitions in part A of the schedule. They included the following:

“Accidental – sudden, unforeseen, fortuitous and identifiable…

Bodily injury – bodily injury, death, illness or disease.”

There is no doubt that the claimant, Mr Hawley, suffered “bodily injury”, within the meaning of paragraph B2 as defined in paragraph A3, as a result of Mr Warren’s vicious attack. Equally, there is no doubt that Mr Warren was, at the time of the attack, employed by ASE, the assured, in the “type of business” described in the policy. The issue which the Judge had to determine was whether the “bodily injury” caused to the claimant was “accidental” within the meaning of paragraph B2 of the schedule to the policy, i.e. “sudden, unforeseen, fortuitous and identifiable”.

Essentially, on the basis that the question of whether injury caused to the claimant was “accidental” or “fortuitous” had to be judged from the perspective of the assured, namely ASE, rather than that of the individual perpetrator, namely Mr Warren (or, indeed, from the perspective of the victim, namely the Claimant), the Judge decided that the injury was indeed “accidental” or “fortuitous” within the meaning of the policy. He therefore concluded that ASE’s liability to the claimant as a result could properly form the basis of a claim under the policy by ASE against the underwriters.

Mr Stuart-Smith QC, on behalf of the underwriters, contends that the Judge reached the wrong conclusion on this issue. He relies upon the natural meaning of the word “accidental” and, indeed, the words “unforeseen” and “fortuitous”, and also on a number of decisions relating to the interpretation of insurance policies in what could be said to be similar circumstances.

The proper approach to the interpretation of a policy of insurance is, in principle, no different from the approach to the interpretation of any other commercial contract. Thus, in Yorkshire Water Services Ltd v Sun Alliance and London Insurance Plc (No.1) [1997] 2 Lloyd’s Rep 21, Stuart-Smith LJ. identified three principles of relevance which can fairly be said to be entirely consistent with the normal approach to interpretation, and may be of some assistance in the present case:

“1.

The words of the policy must be given their ordinary meaning and reflect the intention of the parties and the commercial sense of the agreement. Thus they must be construed in their context or, as Lord Mustill put it in Charter Reinsurance Co. Ltd. v. Fagan and Others [1996] 2 Lloyd's Rep. 113 at p. 117, col. 1; [1996] 3 All E.R. 46 at p. 51e: "the words must be set in the landscape of the instrument as a whole."

2.

A literal construction that leads to an absurd result or one otherwise manifestly contrary to the real intention of the parties should be rejected, if an alternative more reasonable construction can be adopted without doing violence to the language used.

3.

In the case of ambiguity the construction which is more favourable to the insured should be adopted; this is the contra proferentem rule.”

These unexceptionable rules are of some assistance when considering Mr Stuart-Smith’s contention that the words “accidental” and “fortuitous” in the policy are to be given their ordinary meaning. On the face of it at least, his point clearly has some force. However, virtually every word in the English Language is capable of having more than one meaning, and most can have many different shades of meaning. The precise meaning to be ascribed to a word or phrase in a particular contract must therefore ultimately be decided by reference to its linguistic and here its commercial context.

The three principles identified above also serve to underline the caution which a court, seeking to identify the meaning of a word in a particular contract, must adopt when considering what assistance can be derived from either the word’s acontextual meaning, or judicial decisions as to the meaning of the same word in a different contract. Because the contractual and commercial circumstances of each case are inevitably different, it can be positively dangerous to draw assistance from the acontextual meaning or from decisions of other courts as to the meaning, of a particular word, when context is so important on issues of interpretation. Of course, very different considerations may apply where a particular word or phrase has a specific well-established meaning in a certain type of contract.

We would accept that if one takes the phrase “accidental bodily injury to any person” out of context and on its own, one would not naturally use those words to describe the injury inflicted on the claimant by Mr Warren. “Bodily injury” it certainly was, but “accidental” or, more properly, “fortuitous” would not be the immediately natural way of describing it. However, while that point can be said to be of some assistance to the underwriters’ case, it can fairly be said to be assailable on two grounds, which, when taken together, render it of very dubious value.

First, while it would not involve giving the word “accidental” or “fortuitous” its primary acontextual meaning, it seems to us that it would certainly not be a misuse of either word to apply it to the way in which the injury was suffered by the Claimant. Although the infliction of the injury could not be described as “accidental” or “fortuitous” from the point of view of Mr Warren, neither adjective would be inappropriate if one was discussing the way in which the injury was inflicted from the point of view of ASE, or indeed the Claimant. That was the view of the Judge, and we do not understand Mr Stuart-Smith on behalf of the underwriters, to disagree.

Secondly, it is inappropriate, and can even be positively dangerous, to rely upon the acontextual meaning of a word or phrase when construing that word or phrase in a contract. As we have already emphasised, and has been emphasised in countless cases concerned with the construction of commercial contracts (including insurance policies), context is a vital element when considering any questions of interpretation. In this connection, of course, context covers the other provisions of the contract concerned, the overall commercial purpose of that contract, and the circumstances in which it was executed.

We turn to the authorities. There are two clear strands. The first concerns accident policies where the assured suffers injury; in such cases, the question of whether or not the injury was accidental is to be assessed from the perspective of the victim, i.e. the assured: see De Souza v Home & Overseas Insurance Co Ltd [1995] L.R.L.R. 453 at 458-9, and Dhak v Insurance Co of North America (UK) Ltd [1996] 1 W.L.R. 936 at 949H-950D. Secondly, in the case of liability policies, where the assured is the perpetrator of the injury; in such cases, the question is whether the injury was accidental from the perspective of the perpetrator i.e. again the assured: see Gray v Barr [1971] 2 Q.B. 554 at 567F-G, 578B-D and 585G. This is consistent with “a basic rule of insurance law”, namely, “that a contract of insurance does not cover an assured against his deliberate or wilful infliction of loss, at any rate in the absence of express stipulate or necessary implication” see Charlton v Fisher [2002] Q.B. 578 at paragraph [51].

These authorities and principles do not, in our view, provide conclusive assistance in the present case. We are not here concerned with the infliction of bodily injury by, let alone on, the assured, but by an employee of the assured. The question which therefore arises is whether, for the purposes of the policy in the present case, and in particular paragraph B2, as expanded by the definition in paragraph A1, one should attribute the state of mind of Mr Warren to ASE, as is argued on behalf of the underwriters, or whether, as the Judge held, ASE and Mr Warren are to be treated as separate from the perspective of the policy, so that the intention of Mr Warren in causing the bodily injury should not be attributed to ASE.

There are a number of points which, when taken together, persuade us that the Judge was correct in his conclusion. First, the policy recorded the “type of business” in respect of which ASE were being insured as “security guards including door supervisors”. Thus, the policy was concerned with protecting ASE against liability arising from the actions or inactions of their security guards and door supervisors. In those circumstances, one of the most fundamental concepts underlying the policy was that the insured would be covered for damages which it had to pay owing to its vicarious liability for its employees’ torts. Thus, it can be said with real force that one would not expect the underwriters to be able to invoke ASE’s vicarious liability for its doormen as a ground for avoiding, as opposed to accepting, liability under the policy.

Secondly, the cases referred to above suggest that the question of accident (or fortuity), in connection with issues such as that which arises here, is normally judged by reference to the state of mind of the assured. In this case, the bodily injury inflicted on the claimant was accidental (or indeed fortuitous) from the perception of ASE, in the sense of its board of directors, as Mr Stuart-Smith realistically accepts. On that basis, it would only be if one could attribute the state of mind of Mr Warren to ASE that one could conclude that the bodily harm inflicted in the present case was not accidental or fortuitous from ASE’s perspective. But why should one do that? It is not even as if the principle of vicarious liability involves attributing the state of mind of the employee to that of the employer; it is merely concerned with extending legal liability from employee to employer.

Thirdly, while he accepted that the Judge reached the right conclusion if the question of fortuity was to be determined from the perspective of ASE, Mr Stuart-Smith placed much weight on the proposition that, if the Judge was correct, the word “accidental” added nothing in paragraph B2. We do not agree. First, it seems to us, as it did to the Judge, that if bodily injury was caused by an employee of ASE as a direct and foreseeable (and, certainly, if as an intended and inevitable) result of a decision of the ASE board (for instance, what the Judge called “a deliberately aggressive policy towards troublesome or recalcitrant members of the public”) then it could very probably not be characterised as “fortuitous” from the point of view of ASE. We regard as over-sophisticated the suggestion that that cannot be right because, in the event of bodily injury being inflicted in such a case, recovery would be prevented on grounds of public policy: see Gray’s case. On that basis, it would be unnecessary to include the word “accidental” in many policies where it is found. In any event, by virtue of paragraph A1, the word “accidental” is given a meaning which would, on any view, cut out certain types of damage, namely that which is not “sudden” or “identifiable”, as well as “something proceeding from natural causes” or “disease in the ordinary course of events”: see De Souza’s case at 458.

Fourthly, there are the provisions of extension (c) to paragraph B2 as expanded by paragraph A18. In that connection, extension (c) reads, so far as relevant, as follows:

“underwriters will indemnify the insured against all sums… which the assured shall become legally liable to pay as damages in respect of any unlawful physical restraint by the assured or his employees on the liberty of persons and shall include… assault and battery committed or alleged to have been committed at the time of making or attempting to make an arrest…”

Mr Stuart-Smith contends that this provision is inconsistent with the Judge’s construction of paragraph B2, because it would have been unnecessary to include the reference to assault and battery in extension (c) as it would have already been included in paragraph B2, on the Judge’s construction. We do not agree. As we have already implied, it does not seem to us to be a particularly strong point that a particular interpretation of a phrase in this in this policy results in a degree of overlap with another provision. We consider it perfectly possible that, when extending the public liability cover under paragraph B2 to wrongful arrest by extension (c), it was thought prudent to make it clear that the bodily injury cover under paragraph B2 was also extended. In any event, the concept of “assault and battery” is by no means identical to “accidental bodily injury”. That of itself makes it difficult to draw any helpful conclusions of the sort which Mr Stuart-Smith identified, from extension (c) when construing paragraph B2.

Indeed, it seems to us that extension (c) to paragraph B2 tends, if anything, to support the Judge’s construction. The reference to “the assured or his employees” serves to emphasise that the policy distinguishes between ASE and its employees, which is more consistent with the Judge’s conclusion as to the proper perspective from which to assess accident or fortuity, as we have explained. Furthermore, if, as appears pretty clear from extension (c), the policy was intended to cover ASE for assault and battery committed by any of its employees in the context of an unlawful physical restraint, that would tend to support the view that it was not the intention of the policy to exclude liability for bodily injury to third parties under paragraph B2, simply because it was inflicted intentionally by an employee of ASE.

Fifthly, another extension, in paragraph C6 of the schedule, appears to us to support the Judge’s conclusion. Extension C6(c) extends the indemnity in respect of “all reasonable costs and expenses incurred… in the defence of any criminal proceedings brought in relation to the business in respect of any… offence… connected with any matter which is otherwise the subject of an indemnity under any section of paragraph B…”

In our view, again in agreement with the Judge, the reference in extension C6(c) to “any section of paragraph B” indicates that the policy envisaged that there would be circumstances which extension C6(c) would apply to an event covered by paragraph B2. If circumstances which gave rise to a claim under paragraph B2 could also give rise to criminal proceedings, that does suggest that the concept of “accidental bodily injury” can extend to bodily injury which was intended by the immediate perpetrator, if not by the assured. The point is reinforced by the fact that there is expressly excluded from extension C6(c) “breach of statutory duty”, and therefore it cannot have been intended to have applied to, for instance, a prosecution for breach of health and safety regulations.

Sixthly, there is paragraph B1 of the policy which provides cover to ASE in respect of “employers’ liability”, which extends to “legal liability for damages for reasonable costs and expenses in respect of accidental bodily injury caused during the period of insurance to any employee arising out and in the course of his employment”. Once again, it seems to us that this emphasises how, under the policy, there is a distinction drawn between the assured and its employees, in this instance specifically in the context of “accidental bodily injury”. That, as we have said, tends to support the Judge’s conclusion. Apart from that, we do not consider that paragraph B1 provides any assistance so far as the present problem is concerned. From whose perspective fortuity is to be determined under paragraph B1 may be open to argument, but there is no reason why that question should be answered in the same sense in relation to the cover under paragraph B1 and the cover under paragraph B2.

Finally, if necessary, there is the third point made by Stuart-Smith LJ. in the Yorkshire Water case, namely that, in case of doubt, one should construe an insurance policy in favour of the insured. In this case, we would add that such a construction would also comply with what would expected by members of the public attending a club with doormen supplied by a company such as ASE. However, whether that is a relevant factor when considering the meaning of the policy is not a point we need decide.

For completeness, it is right to mention that the Judge, and indeed Mr Sweeting QC on behalf of Luminar and Mr Foy QC on behalf of Mr Hawley, relied on the reasoning in cases concerned with the construction and effect of the Workers Compensation Acts, most notably Trim Joint District School Board of Management v Kelly [1914] AC 667 at 680-682 per Earl Loreburn. We are not convinced that it is appropriate, let alone safe, to rely upon the Court’s approach to the construction and effect of those statutes when considering the effect of an insurance policy, such as that under scrutiny in the present case. As Viscount Haldane L-C said in Trim’s case at 677, “the construction of the Act ought to be more liberal as regards the claims of the workman than would be the case if the Act were construed with the closeness which distinguishes the construction of words in a contract such as that of insurance.”

However, for the reasons set out above, we are of the view that the Judge reached the right conclusion on this issue: that the cover afforded to ASE by paragraph B2 of the policy did extend to the liability of ASE to the Claimant in respect of damages for the serious bodily injury inflicted on him by Mr Warren.

In these circumstances, we consider that the Judge reached the right conclusions on all the issues which he had to consider and we would dismiss the appeals. There remains the question of costs here and below upon which we have yet to hear argument.