The Appellant, Mr Campbell, was employed as an apprentice joiner by a company whose sole director was Mr Gordon, the Respondent. The Respondent was responsible for the day-to-day operation of the company. The Appellant suffered an injury whilst working with an electric saw on 28 June 2006. The company’s employers’ liability policy excluded claims arriving from the use of “woodworking machinery” powered by electricity, and thus excluded any claim arising out of the Appellant’s accident.
The company’s failure to have in place appropriate assurance was a breach of its obligations under section 1(1) of the Employers’ Liability (Compulsory Insurance) Act 1969 (“the 1969 Act”). The company went into liquidation in 2009. The issue for the court was whether the Respondent’s failure, as director of the company, to provide adequate insurance, makes him liable personally in damages to the Appellant. The UK Supreme Court has ruled, by a majority of 3-2, that it does not.
According to the majority, Lord Carnwath giving the lead decision:
"The essential starting point... is an obligation created by statute, binding in law on the person sought to be made liable. There is no suggestion in that or any other authority that a person can be made indirectly liable for breach of an obligation imposed by statute on someone else. It is no different where the obligation is imposed on a company. There is no basis in the case law for looking through the corporate veil to the directors or other individuals through whom the company acts. That can only be done if expressly or impliedly justified by the statute."
So, criminal liability could arise from a breach but civil liability does not. One of the dissenting Lords, Lady Hale, plainly disagreed, "In my view, it is absolutely plain that Parliament did intend there to be such civil liability." However the majority view found the opposite:
https://www.supremecourt.uk/cases/docs/uksc-2015-0061-judgment.pdf
*** As ever, a summary judgement from the UK Supreme Court can be seen on YouTube:
https://www.youtube.com/watch?v=_G6OwBEYPow
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