Gwilliam v West Hertfordshire Hospitals NHS Trust and others;

CA, Lord Woolf LCJ, Waller and Sedley LJJ; The Times,

7 th August 2002

A hospital owes a duty to a member of the public visiting a fund-raising fair in its grounds to take reasonable steps to ensure that any independent contactor who supplies and sets up potentially hazardous equipment at the fair has public liability insurance.

 The Court of Appeal so held by a majority in a reserved judgment dismissing an appeal by the claimant, Ethel Gwilliam against the decision of Judge Roger Connor at Watford County Court on 17 th July 2001, that the first defendant, West Hertfordshire Hospitals NHS Trust, owed her no duty in respect of which damages could be recovered after she was injured in the grounds of Mount Vernon Hospital when using a ‘splat-wall’, on which participants bounced from a trampoline and adhered by Velcro to a wall.

The splat-wall was hired from and negligently set up by the second defendant, Adrian Cane. No appeal was bought against the third defendant, Stephen Fenwick.

Section 2 of the Occupiers’ Liability Act 1957 provides:

‘(4) ………(b) where damage if caused to a visitor by a danger to the faulty execution of any work of construction, maintenance or repair by an independent contractor employed by the occupier, the occupier is not to be treated without more as answerable for the danger if in all the circumstances he had acted reasonably in entrusting the work to an independent contractor and had taken such steps (if any) as he reasonably ought in order to satisfy himself that the contractor was competent….’

 The Lord Chief Justice said that the fair was being held in the grounds of the hospital to raise money for the hospital. The hospital fund-raising manager, Mr Andrew Wynne, had organised the ‘splat-wall’, which was provided by the second defendant, who traded as Club Entertainments.

A splat-wall was a category of entertainment which, it should have been obvious to the hospital, could create danger for those using it if its installation and use were not carefully supervised.

Mr Wynne made an arrangement with Club Entertainments, whereby the hospital paid an extra £100 and Club Entertainments provided the staff for the splat-wall. The hospital was then to have the benefit of Club Entertainments’ public liability insurance.

The injury to the claimant was caused by the negligence of Club Entertainments. Club Entertainments agreed to pay £5,000 to the claimant, which was accepted because Club Entertainments’ insurance had expired.

The claimant contended that she was entitled to recover from the hospital the difference between the sum that she would have recommended from the second defendant if it had been insured, and the sum at which she settled her claim.

The judge took as his starting point the fact that the only reason there was no insurance was that it had expired four days earlier and the second defendant had not appreciated that. He then proceeded to consider the legal position on the ground that it related to pure economic loss. He applied the test laid down in Caparo industries plc v Dickman (1990) 2 AC 605, 617-618 and came to the conclusion no duty was owed to the claimant by the hospital.

In his Lordship’s judgment that was the wrong starting point. The correct starting point was s2 of the 1957 Act. Because of the position relating to insurance, the hospital paid £100 do that the staff operating the splat-wall were the employees of Club Entertainments, but that did not affect the fact that the hospital remained the occupier of the grounds where the fair was taking place and, as such, owned the common duty of care under s 2(1) to the claimant. That duty is defined by s2 (2) as a duty to take such care as, in all the circumstances, is reasonable to see that the claimant will be reasonably safe in using the premises to which she has been invited. Her permission to be present extends to the use of the entertainments, such as the splat-wall, provided at the fair.

Club Entertainments was an independent contractor. However, that, as was made clear by s 2(4), did not mean that the hospital did not continue to owe a duty to the Claimant. Section 2(4) was concerned not with the question as to whether there was a duty, but whether the duty had been discharged.

Furthermore, s2(4), is only an example of the circumstances which can indicate that the duty has been discharged, and it could not be directly applied to the present situation, being capable of having an application only by analogy. The hospital undoubtedly remained under a duty to the claimant and the judge’s conclusion that no duty was owed was incorrect.

The next critical issue was whether the hospital discharged that duty. His Lordship had no doubt that the hospital could fulfil its duty it is employed an appropriate, competent, independent contactor.

In deciding whether the contactor was competent, the hospital had to take into account the nature of the task that the contractor was required to perform. That involved being satisfied that Club Entertainments was sufficiently experienced and reliable to be entrusted with ensuring that members of the public would be reasonably safe using the splat-wall. The fact of insurance would go to the firm’s competence. If the firm did not hold itself out as being insured, that would reflect both of its ability to meet any claim and, in addition, suggest that it was unlikely to be a reputable firm which could properly be entrusted with the responsibility of supplying and operating the splat-wall.

In those circumstances, on the facts and those issues were fact-specific, in the absence of any other credentials, in order to discharge the common duty of care, Mr Wynne was under an obligation to inquire into the insurance position of Club Entertainment so as to confirm the firm’s suitability to be entrusted with the supply and operation of the splat-wall. Mr Wynne did not inquire as to the insurance position, although he did not ask to see the policy. However, as the judge found, Mr Wynne had no reason to believe that the insurance was not in force. That conclusion was one which his Lordship was prepared to accept.

If the position were to be otherwise, it would involve finding that the hospital would not only be required to inquire into the insurance position, they would be required to check the terms of the insurance policy. That would be an unreasonable requirement.

In the result, therefore, the judge came to the right decision, not because there no duty but because the duty had been fulfilled.

Lord Justice Waller said that the members of the public had been invited by the hospital to take part in activities which were inherently risky, which the hospital had chosen to have organised by an independent contractor.

Whether or not the 1957 Act brought about direct liability, it was fair, just and reasonable to impose a duty on the hospital to choose an independent contractor who could properly meet any potential liability which might occur.

The only duty was to act reasonably. Mr Wynne checked whether there was insurance and indeed made a contact for that insurance to be in place. To impose a duty that went further than that would be unreasonable.

Lord Justice Sedley, dissenting, said that there was no duty and that the appeal should be dismissed.