England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		10/01/2005

Mr Justice Wilkie :


 


1. This is the judgment on liability only on a claim brought by David Philip Hawley against three defendants, Luminar Leisure Plc (Luminar), ASE Security Services Ltd (ASE) and David Preston Mann (as nominated underwriter for Farraday Underwriting Ltd) (the third Defendant). The underlying facts giving rise to Mr Hawley's claim are relatively simple and largely uncontentious. They have given rise, however, to some fairly complex legal arguments as to precisely where liability, if any, should fall.
2. Luminar is a company which currently operates some three hundred entertainment venues under different brands. One of its brands is the "Chicago Rock Café" and one of those clubs was, in August 2000, situated in Warrior Square, Southend on Sea, Essex. ASE was, until its voluntary winding up on 27 May 2002, a company providing security services, including door supervisors, to different clients. One of its major clients was Luminar with whom it contracted to provide security services in the form of door stewards at the Chicago Rock Café in Southend.
3. On 18 August 2000 the claimant was a customer at that venue with a number of friends, including one of his work colleagues, Mr Playfair. Both Mr Playfair and Mr Hawley were at the material time firemen. The club closed at 1am and at about 1.30am, immediately outside its front door, it is apparent from CCTV footage which I have seen that there was a melee involving a number of customers of the club who had just left. The claimant and Mr Playfair were immediately outside the club premises at this time. It is apparent that the three door stewards who were on duty that night went out of the club to try to calm the situation down. At one point the claimant is to be observed being approached and being engaged in some kind of conversation with one of the door stewards. Mr Hawley raises his hands and walks back in a gesture of not wishing to have any trouble with the door steward who appears to relax his attention towards the claimant. At that point another door steward, Mr Warren, came on the scene and punched the claimant very hard with his left fist onto the claimant's right jaw. The claimant fell as if poleaxed and, according to Mr Playfair, there were two audible sounds. The first was a sound like a fist hitting a punchbag and the second was a crack. Mr Hawley fell to the floor as a result of the blow and I find, on the balance of probabilities, knocked his head against the pavement. As a result of a combination of the blow and the striking of his head against the pavement he sustained fractures of the skull, nose and jaw. He suffered severe injury to the brain including dural haematomas. He underwent a craniotomy and right temporal lobectomy. He continues to suffer from widespread cognitive impairments including impairments of intellect and memory. In addition he suffers from behavioural problems, facial pain, headaches and impaired bladder control. There is before the court a report from Mr Robert Aspoas a consultant neuro-surgeon who concludes that a skull fracture such as that suffered by the claimant is caused either by an immobile head being struck by a hard object, or a mobile head striking a stationery object. He expressed the opinion that it would be less likely that the claimant's skull fracture was caused by a punch but if he was assaulted by a hard object such as a wooden batten or metal pole this certainly could cause such a fracture. On the basis of that evidence, together with the evidence of Mr Playfair, I conclude that the claimant's fractured nose and jaw were directly caused by the punch thrown by Mr Warren and his skull fracture was caused by his head striking the pavement as a result of his fall immediately following that punch.
4. It is common ground that Mr Warren was, in employment law terms, an employee of ASE. Mr Warren was prosecuted in respect of the assault on the claimant. He stood trial at Basildon Crown Court and, on 30 April 2001, was convicted by a jury of inflicting grievous bodily harm on the claimant. The severity of the offence of which he was found guilty is to be measured by the fact that the judge sentenced Mr Warren to 2 years imprisonment. For reasons which were not before me, but which were before the sentencing judge, he concluded that there were exceptional circumstances which enabled him to suspend that sentence of imprisonment for two years. Mr Warren was also ordered to pay compensation to the claimant of £5000.
5. The claimant commenced proceedings on 28 November 2002 against Luminar and ASE. By his particulars of claim he claimed damages against each of them alleging that they were each liable for the acts of Mr Warren on the basis of their respective negligence. ASE did not file a defence and, accordingly, on 12 June 2003 default judgment was entered against ASE that they must pay the claimant an amount which the court would decide.
6. On 17 January 2003 Luminar put in its original defence. It denied liability on the basis that at all material times Mr Warren was employed by ASE. They also took issue with the question whether Mr Warren was acting in the course of his employment. They specifically denied that Mr Warren was a person for whom they were vicariously liable.
7. On 7 July 2003 there was a case conference. The Master, amongst other things, gave permission to Luminar to issue a Part 20 claim against ASE and directed a preliminary issue between Luminar and ASE on whether, as a matter of construction of the contract between Luminar and ASE dated 16 November 1999, and insofar as the claimant was able to prove certain matters alleged in his particulars of claim, ASE was liable to indemnify Luminar in respect of the claimant's claim. Pursuant to that permission, Luminar issued against ASE a Part 20 notice of Contribution/alternatively Indemnity based on: an alleged contractual indemnity, alternatively ASE's alleged breach of contract and/or negligence in respect of Mr Warren, their employee. That notice was issued on 10 October 2003.
8. On 23 January 2004 the Master made, amongst other things, the following Orders:

A declaration that if the claimant could prove (a) that he was struck in the face by Geoffrey Warren as alleged in paragraph 3 of the particulars of claim and (b) that Geoffrey Warren was acting in the course of his employment when he struck the claimant, then the second defendant (ASE) is liable to indemnify the first defendant (Luminar) pursuant to the contract dated 16 November 1999 for any claims awarded to the claimant and costs. He also ordered that the third defendants be joined to the proceedings and gave directions for them to serve a defence.

9. It is not now in contention either that the claimant was struck in the face by Mr Warren as he alleged or that he acted in the course of his employment when he struck the claimant. Accordingly I find that both the contingent elements in the Master's order are satisfied so as to complete the liability of ASE to Luminar pursuant to that order. There remains an outstanding issue as to which party Mr Warren was the employee of for the purposes of his tortious act of assault against the claimant.
10. The third defendant filed a defence. It did not plead to any of the issues between the claimant and the first and second defendants. It did, however, reserve the right to deny that it was liable to indemnify the second defendant in respect of any such liability it might have.
11. On 10 February 2004 the claimant issued an amended particulars of claim. In that pleading the claimant contended, insofar as it may be necessary, that Luminar was at the material time a temporary deemed employer of Mr Warren for the purposes of vicarious liability in tort. It spelt out in further detail the allegation of assault and negligence against Mr Warren, added particulars to the allegation of negligence against Luminar and sought, in the light of the voluntary winding up of ASE, to claim to stand in their shoes pursuant to Section 1(1) of the Third Parties (Rights against Insurers) Act 1930 so as to take advantage of the insurance policy between ASE and Farraday Underwriting Ltd of which the third defendant is the nominated underwriter. By that amended pleading it sought a declaration in the terms set out in paragraph 13 of that pleading: that the third defendant will be liable, pursuant to the 1930 Act, to pay any damages and costs the claimant is awarded against the second defendant.
12. In response to that amended particulars of claim Luminar re-amended its defence. It denied that Mr Warren was either an employee or a temporary deemed employee of Luminar at the material time and accordingly denied that it bore any vicarious or other liability in respect of the acts of Mr Warren.
13. The third defendant amended its defence. It admitted that ASE was in liquidation, it admitted the existence of the insurance policy now relied on by the claimant but it denied that the liability of ASE for damages to the claimant arose from "accidental bodily injury" within the meaning of the policy. In particular it said that ASE's liability arises from an intentional assault and as such would not fall within the ambit of the cover provided by the policy. In addition to the argument based on the construction of the policy, the third defendant, at that stage, took a point of public policy namely that ASE was not entitled to an indemnity in respect of such liability because it was caused by and arose from a deliberate wrongful and criminal act of its employee Mr Warren.
14. As a result of the parties reflecting on certain of the issues as illuminated by: the skeleton arguments; and the evidence given in written form and orally at trial; certain of the issues which were raised on the pleadings are no longer live.
15. Luminar no longer seeks to argue that Mr Warren was not acting in the course of his employment when he went outside the club and when he assaulted the claimant. The claimant no longer pursues an argument that Luminar is liable on the basis of direct negligence. It is in effect conceded that, unless it can be established that Luminar was vicariously liable for the conduct of Mr Warren, then it has no liability. The third defendant no longer relies on its argument based on public policy. It accepts that the claimant is entitled to his declaration if, as a matter of construction, the terms of the public liability policy held by ASE covered the conduct of Mr Warren towards the claimant. I am content to proceed on the basis that the issues have been narrowed in that way as the positions now adopted by the parties reflect what I would have decided on these issues.
16. Accordingly the issues which remain for me to determine are:

i) Was Mr Warren a temporary deemed employee of Luminar so as to fix them with vicarious liability for his tortuous act against the claimant?

ii) Is the liability attaching to ASE by reason of the default judgment to be regarded as a liability for accidental bodily injury within the meaning of the insurance policy held by ASE with the third defendant?

The Vicarious Liability of Luminar

The Legal Principles

17. As I have indicated it is not now in issue that the conduct of Mr Warren was in the course of his employment. There was ample evidence from Mrs O'Brien, Luminar club manager, and Mr Pullman, the ASE head door supervisor engaged at that club, as well as Mr Beckford, the ASE area manager for the Southend area, that it was entirely proper and normal for those supervisors to concern themselves with customer behaviour immediately outside the club when or shortly after the club closed. This reflected the emphasis placed by public authorities, such as the local authority and the police, upon club proprietors being responsible for the orderly dispersal of their customers from the vicinity of club premises at or after closing time.
18. Thus the sole question is whether the vicarious liability for Mr Warren's conduct which arose is one which was vested in his "employer" for all normal employment purposes – ASE – or whether Luminar became his temporary deemed employer for the limited purpose of assuming vicarious liability for his tortious conduct on that particular night.
19. The philosophy underlying the placing of strict liability by way of vicarious liability on an individual's employer has been explained in recent times by, in particular, Lord Millet in Lister v Hesley Hall Ltd (2001) UKHL 22 at paragraph 65:

"Vicarious liability is a species of strict liability. It is not premised on any culpable act or omission on the part of the employer; an employer who is not personally at fault is made legally answerable for the fault of his employee. It is best understood as a loss distribution device:…the theoretical underpinning of the doctrine is unclear… Fleming observed (The Law of Torts 9^th Edition page 410) that the doctrine cannot parade as a deduction from legal premises. He indicated that it should be frankly recognised as having its basis in a combination of policy considerations, and continued: "most important of these is the belief that a person who employs others to advance his own economic interest should in fairness be placed under a corresponding liability for losses incurred in the course of the enterprise…""

Lord Millet further explained the underlying philosophy in Dubai Aluminium Co Ltd v Salam and Others (2002) UKHL 48 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" (citing Atiyah on Vicarious Liability (1967) page 171)…the American Law Institute Restatement of the Law, Agency, 2^nd Edition (1958) section 229 is to the same effect; "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""

Those citations concern the doctrine of vicarious liability at large and are not focussed on the question of when vicarious liability may attach to a defendant in respect of the conduct of a person who is not, in conventional terms, employed by him, but by another.

20. The leading authority on that question is the case of Mersey Docks Harbour Board v Coggins and Griffith (Liverpool) (1947) AC1. The facts of that case were that a harbour authority let a mobile crane to a firm of stevedores for loading a ship providing a craneman who was employed and paid and liable to be dismissed by it, though the general hiring conditions stipulated that cranemen so provided should be the servants of the hirers. In the course of the operation he injured a third person by negligently driving the crane. The stevedores had the immediate direction and control of the operation in respect of which the crane was being used but had no power to direct how the crane should be worked or the controls manipulated. The House of Lords held that the Harbour Authority as the general permament employer was liable. The burden of proof of showing that the craneman had, for vicarious liability purposes, become the employee of the stevedore company was placed on the general employer. Lord Simon in the leading speech said as follows at pages 10 – 12:

"It is not disputed that the burden of proof rests on the general or permanent employer – in this case the appellant board – to shift the prima facie responsibility for the negligence of servants engaged and paid by such employer so that this burden in a particular case may come to rest on the hirer who for the time being has the advantage of the service rendered. And, in my opinion, this burden is a heavy one and can only be discharged in quite exceptional circumstances. It is not easy to find a precise formula by which to determine what those circumstances must be…..(His Lordship then embarked on a detailed consideration of certain cases. He concluded)…I would prefer to make the test turn on where the authority lies to direct, or to delegate to, the workmen the manner in which the vehicle is driven. It is this authority which determines who is the workman's "superior". In the ordinary case, the general employer exercises this authority by delegating to their workmen discretion in method of driving, and so the Court of Appeal correctly points out (1) that in this case the driver Newall, "in the doing of the negligent act, was exercising his own discretion as driver – a discretion which had been invested in him by his regular employers when he was sent out with the vehicle – and he made a mistake with which the hirers had nothing to do." If however the hirers intervened to give directions as to how to drive which they have no authority to give, and the driver pro hac vice complies with them, with the result that a third party is negligently damaged, the hirers may be liable as joint tort feasors."

Lord Porter at page 17 said as follows:

"Many factors have a bearing on the result. Who is paymaster, who can dismiss, how long the alternative service lasts, what machinery is employed, have all to be kept in mind. The expressions used in any individual case must always be considered in regard to the subject matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any particular time, is to ask who is entitled to tell the employee the way in which he is to do the work on which he is engaged. If someone other than his general employer is authorised to do this he will, as a rule, be the person liable for the employee's negligence. But it is not enough that the task to be performed should be under his control, he must also control the method of performing it. It is true that in most cases no orders as to how a job should be done are given or required; the man is left to do his own work in his own way. But the ultimate question is 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."

And in the same case Lord Uthwatt at page 21 says as follows:

"The principles established by the authorities are clear enough. The workman may remain in the employ of his general employer, but at the same time the result of the arrangements may be that there is vested in the hirer a power of control over the workmen's activities sufficient to attach to the hirer responsibility for the workmen's acts and defaults and to exempt the general employer from that responsibility…To establish the power of control requisite to fasten responsibility on him, the hirer must in some reasonable sense have authority to control the manner in which the workman does his work…"

The operation of these principles is not something out of which the parties can contract. In the speech of Lord Simonds at page 19-20 he said as follows:

"The learned counsel for the appellants laid great stress on the terms of the contract between the appellants and the respondents. This contract incorporated the "regulations and rates applying to the fixed moveable cranes on land, available for general use" prescribed by the appellants and one of these regulations was as follows "6. The Board do not provide any labour in connection with the cranes except the services of the crane drivers for power cranes. The drivers so provided shall be the servants of the applicants"…The argument was that this was the best evidence the service of Newall was pro hac vice transferred from the appellants to the respondents and that the transfer was recognised and acquiesced by him and reference was made to the judgment of the Privy Council in Bain v Central Vermont Railway Company but I do not think that this argument is sound. Prima facie the contract between the appellants and respondents is not evidence against the plaintiff in determining the liability of either of them to him, though he may, if he thinks fit, adduce it in evidence for the purpose of showing what is the function of the workman in relation to one employer or the other. In this sense it may be the best evidence available against the employer. But the terms of the bargain that the driver shall be the servant of one party or the other cannot be used by either of them to contradict the fact, if it is the fact, that the complete dominion and control over the servant has not passed from one to the other. It is nothing else than an incorrect inference of law which cannot affect the rights of the plaintiff."

Lord Uthwatt at page 22 addressed this issue. He said as follows:

"The hiring agreement contained the following provision; "the driver so provided ….shall be the servants of the applicants"…there is no evidence that the workman agreed to this provision or was indeed aware of it. Without his consent he could not be made the servant of the respondent company. In the light of the circumstances it is impossible to construe the provision as authorising the respondent company to direct the manner in which the workman should do his work and for the purpose in hand I read the position as merely as stating what the appellant board and the respondent company agreed should be the legal result of an arrangement the operative terms of which are to be found elsewhere. Their agreement on a matter of law is immaterial."

21. These same principles were given fresh expression in the case of Denham v Midland Employers Mutual Assurance Ltd (1955) 2QB 437. Lord Justice Denning (as he then was) at page 443 to 444 said as follows:

"Much of the difficulty which surrounds this subject arises out of the nineteenth century conception that a servant of a general employer may be transferred to a temporary employer so as to become for the time being the servant of the temporary employer. That conception is a very useful device to put liability on the shoulders of the one who should properly bear it, but it does not affect the contract of service itself. …The supposed transfer, when it takes place, is nothing more than a device – a very convenient and just device, mark you –to put liability onto the temporary employer; and even this device has in recent years been very much restricted in its operation. It only applies when the servant is transferred so completely that the temporary employer has the right to dictate, not only what the servant has to do, but also how he is to do it…Such a transfer rarely takes place, if ever, when a man is lent with a machine, such as a crane or a lorry: nor when a skilled man is lent so as to exercise his skill for the temporary employer….but a transfer does sometimes take place in the case where an unskilled man is lent to help with neighbouring work…the temporary employer can then no doubt tell the labourer how he is to do the job. The labourer becomes so much part of the organisation to which he is seconded that the temporary employer is responsible for him and to him."

And further on:

"The real basis of the liability is, however, simply this: if a temporary employer has the right to control the manner in which a labourer does his work, so as to be able to tell him the right way or the wrong way to do it, then he should be responsible when he does it in the wrong way as well as the right way. The right of control carries with it the burden of responsibility."

22. These principles have most recently been given expression in the case of Inter Link Express Parcels Ltd v Night Truckers Ltd (2001) EWCA Civ 360. That was a case which concerned the application of the Goods Vehicles (Licensing of Operators Act) 1995. It concerned whether a driver of a vehicle was a servant or agent of a particular party who was not their employer for contractual purposes. The Court of Appeal concluded that the test was that of tort rather than contract and accordingly the doctrine of temporary deemed employment was the relevant test. The leading judgment was given by Lady Justice Arden. At paragraph 58 to 60 she says as follows:

"In determining whether the Night Trunkers drivers were temporary servants of Inter Link, the judge identified as applicable the test of control laid down in Mersey Docks and Harbour Board. I agree that this is the applicable test. It is clear that the judge kept in mind that the burden on the general employer to show that this test is satisfied was "a heavy one and can only be discharged in quite exceptional circumstances"…In this area cases depend on their own facts and are thus illustrative rather than determinative….

60. In the context of actual employment the effect of current jurisprudence is that the court has to take into account a wide range of factors….The right to control the supposed employee's method of work is one of these factors. However in the context of temporary deemed employment, the paramount test is that of control (see generally Atiyah on Vicarious Liability in the Law of Torts (1967) chapter 18 The Borrowed Servant, especially at 158 – 161). Issues as to payment of wages, engagement, dismissal and discipline, while relevant, are subsidiary to this. The judge's conclusion that, in practice, control over the driver in his cab was not a major matter is unobjectionable, as long as it is borne in mind that control over the employee's method of work is the test which the law, as laid down in the Mersey Docks case, treats as of critical importance. Moreover, in the absence of actual control by anyone in practice, it is the right to control, not the absence of control, which matters."

23. In addition to these often stated principles there is one matter which, as a matter of practicality, Luminar urges as potentially decisive of the issue. It appears to be the case that if what is hired is an organised gang, or team of workmen with a foreman who is in charge of the gang or team and, in effect, controls their method of working, then that has been regarded as decisive against any temporary deemed employment arising (see Karuppan Bhoomidas and Port of Singapore Authority (1978) 1WLR 189 at 193G.)
24. In my judgment, and subject to the point concerning a foreman, it is clear that the paramount test is that of the nature and extent of control which Luminar had over the door supervisors supplied by ASE. The fact that in the contract between ASE and Luminar there is a specific provision that all stewards provided by ASE will be employees of ASE and that nothing in the agreement shall be deemed to render any of them employees of Luminar is neither here nor there.
25. It is the case that by clause 7.4 of the contract ASE agrees to take out and maintain with a reputable insurance company, on terms to be approved by Luminar, insurance cover for both employer liability and public liability in the sums of £5 million pounds each. Clause 7 concerns indemnity and insurance and clause 7.1 contains the agreement of ASE fully to indemnify Luminar against all liabilities which arise from or are connected with the provision of the services or any acts omissions or defaults of ASE or the stewards which was the subject of the Part 20 claim. In my judgment these clauses are of some, though limited, significance. It demonstrates that, as between themselves, Luminar and ASE were intent to provide specifically for the distribution of risk and also the libility of ASE to discharge its responsibilities to Luminar pursuant to that distribution of risk. That, together with the provision as to who should employ the stewards, indicates that their intention was that, as between themselves, ASE was to bear all the risks attached to such employment. In my judgment, however, if, as a matter of fact, the degree of control exercised, or exercisable, by Luminar over the stewards was such as to fall within the description which gives rise to a temporary deemed employment by Luminar of ASE's employees then these provisions could not operate to override the effect of that paramount factor.
26. Luminar also deployed an argument that, assuming the level of control was such as to give rise to a situation in which the stewards would normally be deemed to be temporary employees of Luminar, then, if those facts constituted the normal arrangements between club operators and security service providers, because of external requirements, the requirement for "exceptional circumstances" as described in the Mersey Docks and Harbour Board case authorities would require something in addition to that requisite level of control in order for vicarious liability to pass from ASE to Luminar. I reject that contention. In my judgment it is clear that when Viscount Simon referred to "special circumstances" he then went on to identify how those exceptional circumstances might be recognised and did so in terms of the level of control exercised or exercisable by the "temporary employer".

Did Luminar exercise or have the right to exercise the requisite level of control?

27. There were two sources of evidence by reference to which this issue was explored. They were, respectively, the contractual and other documentation and the evidence, written and oral, of what happened in practice. The contractual documentation reflected both the individual agreement between Luminar and ASE and the constraints placed upon them by public policy as expressed by the local authority in the conditions it applied to granting a licence to Luminar to operate the club and the regulations underpinning those licence conditions. In addition it is clear that Luminar, through its relevant officer Mr Dennis, is a conscientious contributor to the establishment of high standards concerning security and has been influential in compiling the British Standard Door Supervisors/Stewards Code of Practice. (BS 7960-1999).
28. The first relevant document is the Southend on Sea Borough Council general regulations for public entertainment. These regulations govern the issuing of licenses and the conditions upon which licenses are issued. Clauses 24 to 27 concern security. Clause 26 defines a door supervisor as a person employed at the licensed premises to undertake any of a series of functions. Those functions are: 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) imposes on licensees an obligation to maintain a register identifying door supervisors employed during each session and to make that available to the police or the council. Clause 24(iii) imposes an obligation on licensees to ensure, so far is reasonably practicable, that door supervisors comply with the Council's Rules of Conduct set out in their door supervisors registration scheme. Clause 25 imposes on licensees an obligation to secure that a suitable and sufficient number of appropriate door supervisors is employed at the licensed premises and that their duties are efficiently conducted. The regulations place no obligation whatever on those who may employ the door supervisors and make their services available to the licensee.
29. The second document is the public entertainment licence itself. The licence is stated to be subject to the standards, terms, restrictions and conditions contained in the regulations made by the authority and to such additional conditions as are set out in a schedule. Those additional conditions include the following:

"6. The licensee shall take all reasonable practicable steps to ensure that patrons entering into and departing from licensed premises do not cause nuisance or annoyance to adjoining residents or passers by.

7. The licensee shall ensure that a constant and accurate record shall be maintained of the number of patrons within the premises at any time whilst they are in use for public entertainment…."

30. The relevant contract between Luminar and ASE, being an agreement for the supply of security services, was dated 16 November 1999. Clause 1 sets out a number of definitions. They include the following:

"Services" means the services to be provided by the security organisation as described in schedule 1 as varied from time to time by Luminar under Clause 2.3.

"Services Schedule" means the schedule of the services to be provided as stated in schedule 2 as varied from time to time by Luminar under Clause 2.3.

The Standards of Services means the standard of services to be observed in providing services as set out in the job descriptions, health and safety policies and procedures, and code of conduct attached as appendix 1 including any amendments to these documents issued by Luminar at any time during the period of this agreement.

31. Clause 2 concerns the supply of services. 2.1 provides that the security organisation will provide the services to Luminar during the period of the agreement.

Clause 2.2 provides that the security organisation will provide the services using reasonable care and skill in accordance with the services schedule and the standards of services.

Clause 2.3 provides 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 will provide the services according to the services schedule as varied.

Clause 2.5 provides 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."

32. Clause 4 concerns obligations of the security organisation. It includes amongst other things the following:

4.3 The security organisation warrants that each steward provided by it as part of the services:

4.3.1 will be an employee of the security organisation and

4.3.2 has been thoroughly checked by the security organisation as being suitable to provide the sevices; and…

4.3.4 has been fully trained by the security organisation to the standard approved by Luminar; and…

4.3.5 has been fully briefed in and understands Luminar brand's requirement; and…

4.3.6 has been provided with a copy of the standard of services which he has accepted in writing…

4.3.8 immediately reports 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 is aware and enters details of the incident accident or injury in the appropriate documentation supplied by Luminar.

Clause 5 deals with uniforms and equipment and provides amongst other things:

5.1 The security organisation will ensure that all stewards provided by it as part of the services where the uniform specified by Luminar whilst they are on duty.

33. Clause 7 concerns indemnity and insurance. Clause 7.1 provides that the security organisation agrees to fully indemnify Luminar against all liabilities which arise from or are connected with in any way whatsoever with a number of things including the provision of the services, any failure by stewards to comply with the terms of the agreement or any acts, omissions or defaults of the security organisation of stewards.

7.4 provides that "the security organisation will throughout the period of this agreement take out and maintain with a reputable insurance company and on terms to be approved by Luminar the insurance cover specified in schedule 4." (Schedule 4 specifies employer liability £5 million, public liability £5 million).

34. Clause 8 concerns stewards. Clause 8.1 provides "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." The other sub clauses provide 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 provides "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."

35. Schedule 1 contains the "standards of services" provisions. It includes four documents: the contract itself; a job description; health and safety policies; and a stewards code of conduct.
36. The second document is the job description of a door steward. He is said to be responsible to "head doorman/manager/assistant manager". His purpose is "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, adherence to health and safety regulations". There is then a note "this job description is to be read in conjunction with Luminar Leisure's code of conduct for door stewards". There is then a comprehensive, but non exhaustive, list of job responsibilities. It is worthy of note that 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. This job description is stated to form a part of the door steward's contract of employment and any breach of the duties and responsibilities may result in disciplinary action or dismissal. The door steward is required to sign for this job description and to acknowledge its effect. Also annexed to the contract as part of the standards of service is a health and safety policy and procedure document which is stated to be that of Luminar Leisure Ltd. The final document is a code of conduct applicable to all "door supervisors working for Luminar Leisure". It sets out a series of detailed provisions as to how the door supervisor is to undertake his duties. It includes the following:

1. 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.

2. All incidents in which you are involved must be brought to the attention of the person in charge of the premises without delay.

5a. 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.

9. 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.

The code of conduct contains the following final statement:

"This code of conduct in no way removes or overrides the responsibilities of the licensee or his designated representative."

37. Schedules 2 and 3 set out the schedule of services. It is 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. It is apparent from these figures that ASE charged Luminar of the order of £10 per hour for a doorman and £10.70 per hour for a head doorman.
38. 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.
39. I heard oral evidence from Mrs O'Brien, who at the time was the manager of the club employed by Luminar, and Mr Pullman, who was the head doorman allocated by ASE to this club. Mrs O'Brien worked to a job description. Her job purpose is stated to be "to ensure the smooth and efficient running of the venue, through adequate staffing levels, sufficient security and thorough documentation. Clause 5 of her job description is entitled "Security". It provides 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.

Running of premises. 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.

And clause 7 provides

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 let any act or occurrence which may cause public nuisance or annoyance,…"

40. Mrs O'Brien in her witness statement says as follows:

"12. 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.

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

14. 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.

15. 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.

In her oral evidence 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."

41. Mr Pullman in his witness statement indicated 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 Errol Beckford. Local management of Luminar would liase with him about any particular bookings and they might suggest where the door staff should be standing during the course of the evening. It was part of Mr Pullman's duties as head doorman to keep a close check on the numbers of those gaining admission for the purpose of compliance with door regulations. He acknowledged that it would be for the management to indicate to him any occasion when a different number might be admitted, for example when there was a limitation on numbers to attend a particular function. Although in his written 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 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. He 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.
42. Mr Dennis, a director of Luminar, gave evidence of setting up the documentation. He stated that 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.
43. Mr Beckford who was the area manager for ASE gave evidence. Much of his evidence concerned registration schemes for door stewards and the position of Mr Warren in respect of the Southend scheme. In cross-examination, however, he did state that as far as uniforms were concerned Luminar had their own branded uniform, colour coded to distinguish 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.
44. 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 paries 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.
45. 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.
46. 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.

Is the claimant entitled to a declaration that the third defendant is liable to indemnify ASE pursuant to the insurance policy and that it is liable to pay the claimant any sum he is awarded against ASE?

47. The focus of this issue is the contract of insurance entered into between ASE and the underwriters represented by the third defendant. It is described as "a combined liability insurance for the security industry". It is apparent from its terms that what is meant by this is that it covers both employers' liability and public liability. This may be of some significance.
48. The indemnity sought to be enforced by the claimant is for public liability under clause B2. That provides, amongst other things, that the underwriters will indemnify the assured against legal liability for damages and reasonable costs and expenses arising from "accidental bodily injury to any person.."
49. The phrase "accidental bodily injury" is subject to further definition in the policy. Clause A provides for definitions. Within that clause the following appears:

"1. Accidental – sudden, unforeseen, fortuitous and identifiable.

3. Bodily injury – bodily injury, death, illness or disease."

The core issue between the parties is: from whose perspective must the bodily injury be "accidental"? If the perspective is that of the victim – the claimant – or Mr Warren's employer – for this purpose ASE – then it is common ground that, in this case, the bodily injury would be "accidental". Mr Stuart-Smith for the third defendant acknowledges that, from the perspective of ASE, the bodily injury would be "sudden, unforeseen, fortuitous and identifiable." On the other hand, if the perspective is that of the perpetrator – Mr Warren – then Mr Stuart-Smith says, and in my judgment with a great deal of force, that Mr Hawley's bodily injury would not be "accidental". It is clear to me that, as a matter of fact, the assault was deliberate. It was intended to do Mr Hawley serious harm and, subject to a question which may be relevant whether part of his injuries – namely his skull fracture – was sudden, unforeseen fortuitous and identifiable arising from his striking his head on the pavement, in my judgment Mr Stuart-Smith's analysis of the facts is correct.

50. The parties have sought to gain assistance in their various contentions from certain other provisions in the policy. In particular there has been some debate concerning the fact that the phrase "accidental bodily injury" is central to the insurance provided both in respect of employers' liability and public liability. Mr Langstaff argues that because the same phrase is used for each, it follows that the case law on accident liability, employer's liability and the Workmen's Compensation Act is of relevance in that it establishes clearly that cover exists even where the injuries were inflicted deliberately by a third party. Mr Stuart-Smith, in resisting this argument, points out that the cover for employer's liability is not wholly given by the clause in which the phrase "accidental bodily injury" appears. There is, in addition, a further clause which provides that the indemnity is deemed to be in accordance with the provision of any law relating to compulsory insurance of liability to employees. He argues, therefore, that the Workmen's Compensation Act and employer's liability cases are not relevant to the present case. He says that the phrase "accidental bodily injury" was not intended to be co-extensive with compulsory cover for employer's liability. Otherwise the supplemental "deeming" clause would not be included. In my judgment there is much force in this. It is clear that the phrase "accidental bodily injury" is to be construed as meaning the same whether it is used in the context of employers' liability or public liability under this policy. Each of the elements in that phrase is subject to specific definition in a general definition clause. That does not mean, however, that the perspective from which the question whether what has happened is "accidental bodily injury" has to be identical whether the claim is made pursuant to employers' liability or public liability.
51. There was also some debate whether any assistance was to be gained in construing the policy from the fact that, amongst the possible extensions to the insurance under part C of the policy, is a provision in C6c which enables cover to be extended to reasonable costs and expenses incurred in the defence of any criminal proceedings in respect of any " offence… connected with any matter which is otherwise the subject of an indemnity under any section of paragraph B." Mr Langstaff says that this provision is consistent with a contention that public liability cover may embrace bodily injury caused by the commission of an offence. Mr Stuart-Smith sought to suggest that no assistance can be derived from C6c because one of the possible areas of insurance cover under public liability is for wrongful arrest which, by the definition clause, includes any assault and battery committed in connection with such arrest or any libel or slander false imprisonment or malicious prosecution committed in connection with the arrest. Mr Langstaff points out, as is the case, that clause C6c applies in respect of indemnity under any section of paragraph B whereas other provisions in C6 are specifically limited to one or other part of paragraph B. In my judgment Mr Langstaff is correct in that contention and, insofar as it is necessary for me to do so, I conclude that the public liability cover under clause B2 may extend to accidental bodily injury caused by the commission of a criminal offence provided, of course, that the criminal offence is not perpetrated by the assured.
52. I now turn to the core issue, namely that of perspective. In my judgment Mr Stuart-Smith and Mr Sweeting for Luminar are correct when they say that the perspective is not that of the victim. This is a public liability insurance and not an accident insurance or an employers' liability. The focus is not that of the victim. The focus is that of the assured and his liability. It therefore follows that I derive limited assistance from the cases cited in argument which are Workers' Compensation Act cases or employers' liability cases or accident liability cases which suggest that insurance cover arises in respect of the deliberate assault by a perpetrator on the victim.
53. I now turn to the dispute between Mr Sweeting and Mr Stuart-Smith. Mr Sweeting says that the perspective from which the question was this "accidental bodily injury" must be viewed is that of the assured – in this case ASE – and not the third party – Mr Warren – who was the perpetrator.
54. Mr Stuart-Smith argues that the insurance policy is deliberately drawn so as to apply only to accidental bodily injury. His argument is that the use of the word "accidental" would be otiose if the perspective were to be that of the assured rather than that of the perpetrator. He reasons thus: it is a fundamental proposition of insurance that an assured cannot achieve cover in respect of their own deliberate act. The antithesis of a deliberate act, in this context, is an accidental one. If that is so then the use of the word "accidental" in the policy adds nothing. The assured's cover could only ever arise where the bodily injury was "accidental". It must therefore be the case that for "accidental" to have any meaningful role, the perspective from which the question "was it accidental?" must be answered is that of the perpetrator third party for whose actions the assured has legal liability. That being so, then given the deliberate nature of Mr Warren's conduct the bodily injuries suffered by Mr Hawley are not covered by the public liability insurance pursuant to this policy.
55. Mr Sweeting's response to this argument is that the word "accidental" does have meaning because it is not the sole antithesis of the word "deliberate". He acknowledges the fundamental proposition that an assured cannot be covered in respect of their own deliberate wrong doing. He says, however, that there is an intermediate area between wrong doing which is deliberate on the one hand, and that which is "accidental" as defined for the purposes of this policy – sudden, unforeseen, fortuitous and identifiable. This grey area is filled by circumstances in which, from the perspective of the assured, the bodily injury may not be sudden, may not be unforeseen, may not be fortuitous and may not be identifiable. For example, he indicates that there may be cases in which, though the bodily injury was not inflicted at the deliberate instigation of the assured by one of its servants, the practices, policies and stated attitude of the assured may be such that a deliberate bodily injury inflicted by one of its servants was foreseen or was not fortuitous. This might be so if the security company has a deliberately aggressive policy towards troublesome or recaltricant members of the public. Where, as here, the assured is following policies laid down by Luminar and by the local authority which adopt a precautionary attitude towards handling members of the public then it may truly and meaningfully be said that the bodily injury, viewed from the point of view of ASE, was "accidental".
56. In my judgment Mr Sweeting is correct . I do not accept the contention that, in this context, there is only one antithesis to deliberate namely accidental. There is a range of possible circumstances which lie between the deliberate and the "accidental" defined in this policy. It therefore follows that the use of the word "accidental" in this policy is not otiose if viewed from the perspective of the assured. Furthermore, in my judgment, the natural way of construing an insurance contract is to construe it from the point of view of the assured and it would take an exceptional set of circumstances to make it correct to view a core provision such as this from the point of view of a third party rather than the assured.
57. In light of the fact that Mr Stuart-Smith has, correctly in my judgment, conceded that, if viewed from the perspective of ASE, Mr Hawley's bodily injury was "accidental" within the meaning of the policy then, in my judgment, such liability for Mr Hawley's injuries as ASE has under the default judgment does fall within the cover provided under the policy, in the first instance to ASE. Mr Hawley being entitled to the benefit of that indemnity, pursuant to section 1(1) of the Third Parties (rights against Insurers) Act 1930, he is entitled to the declarations sought in paragraph 13 of his amended particulars of claim.