Century Insurance v Northern Ireland Road Transport Board

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Century Insurance v NI Road Transport Board [1942] AC 509

Employer’s vicarious liability for damages caused by the acts of an employee.

Facts

A transport undertaking had a contract with a petroleum company for the carriage and delivery of their petrol in lorries, agreeing to insure the lorries against any spillage or fire of the petroleum. The lorries were insured by an insurance company against liability to third parties. While one of the lorries was delivering petrol at a gas station, the undertaking’s driving lit a cigarette, causing an explosion and consequent damages.

Issue

(1) Firstly, the question arose as to whether the employer or the insurance company was liable. (2) Secondly, the question arose as to whether the employee’s smoking of the cigarette was in the course and scope of his employment for the purposes of rendering the employer’s vicariously liable.

Held

Firstly, the Court held that the employer is the party who has the right to control the conduct of the act at the given time. The transport company was in control of their own truck drivers to deliver the petrol and it, not the insurance company, must be held to be the employer. Secondly, the Court held that the truck driver’s act, albeit careless, took place during the course of his employment as he was in the midst of delivering the petrol to a tank. Recent authority has overturned the requirement that the act be done for the benefit for the employer. The employee was negligent in the discharging of his duties by smoking as he did, yet was nevertheless in the course of discharging his duties to his employer and, thus, the employer was liable. Accordingly, the transport undertaking was held vicariously liable for the damage caused by their employee’s negligence.

Word Count: 280

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