Firms retain liability protection from subcontractors' workers

Supreme Court reiterates principal company had no control or involvement in location or practices surrounding injury

Firms retain liability protection from subcontractors' workers
The Supreme Court of NSW backs the protection of principal firms.


It may have concluded in August, but the Lee v Wickham Freight Lines case in the New South Wales Supreme Court continues to be a source of fascination for interested lawyers.

Among the latest is Barry Nilsson Lawyers insurance and health lawyer Jacinta Daher’s recent analysis, which supports most others who have commented on the issue.

"The case reaffirms the general proposition that a principal will not be held vicariously liable for the acts of a subcontractor," Daher writes.

"There are circumstances in which a principal can be held liable for injury sustained by employees of a subcontractor; however, certain factors will need to be established which show that the principal exercised substantial control over the day-to-day activities of subcontractors and that the relevant premises were under the principal’s control."

The case was brought against Wickham Freight Lines (WFL) by a driver for its subcontractor, Williams Bulk Haulage (WBH).

He had been delivering soft drinks from a depot at Yennora which was owned and operated by a third party, Combined Distribution Management (CDM).

The driver had injured his back moving boxes.

"The trial judge held that the respondent did not owe a duty of care to the appellant as it had not taken charge over the manner in which he had manoeuvred the boxes which caused his injury," Daher writes.

"The system of work was devised by his employer; the area in which the truck was unloaded was not under the respondent’s control and the existence of subcontractor guidelines were not sufficient to establish that the respondent had assumed any legal responsibility for employees of its subcontractors."

She also mentions that proceedings against Woolworths, the owner of the goods, and Coca Cola, the manufacturer of goods, had earlier been discontinued.

Interestingly, in looking beyond the finding itself, HBA Legal partner Chris Murphy offers a context for the case, which had begun eight years earlier.

"With the significant restriction of common law claims against employers in New South Wales and other jurisdictions, [plaintiffs] will continue to search for other defendants whose involvement in the incident will usually be more remote than the employer," Murphy says.

"For companies that subcontract their duties to others, this case is a refreshing reminder that where the principal genuinely has little to do with directing how the work is performed courts will be slow to acquiesce in these attempts."

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