Undertaking transferred to new employer old employers liability in tort to employee transferred to employer receiving undertaking employers right of indemnity under its employers liability insurance policy likewise transferredMartin v Lancashire County Council; Bernadone v Pall Mall Services Group Ltd and others: CA (Peter Gibson, Henry and Clarke LJJ): 16 May 2000

In the first case, a council employee in its waste disposal group was injured at work.

The council transferred the waste disposal activities to a new employer.

The claimant sought damages for personal injury against the council.

The council asserted on the hearing of a preliminary issue that its liability in tort transferred to the new employer.

The judge disagreed.

The council appealed.In the second case, a catering assistant was injured at work.

Her employer transferred its catering activities to a new employer.

She brought proceedings for personal injury against the old employer but later joined the new employer as defendant on the alternative basis that the old employers liability to compensate her had transferred.The new employer denied that liability had transferred.

At a preliminary hearing, the judge held that (i) the old employers tortious liability did transfer to the new employer; and (ii) that the indemnity against liability for injury to employees which the old employer had under an insurance policy with an insurer also transferred to the new employer.The claimant and the new employer appealed against the first finding.

The old employer and the insurer appealed against the second finding.John Hand QC and Andrew Hogarth (instructed by Thompsons) for the claimant.

Adrian Lynch (instructed by the chief executive, Lancashire County Council, Preston) for the council.

Colin Edelman QC (instructed by Davies Laverey, Maidstone) for the old employer and the insurer.

Ronald J Walker QC and Stephen Worthington (instructed by Hextall Erskine) for the new employer.

John Hand QC and Andrew Hogarth (instructed by OH Parsons & Partners) for the claimant.Held, allowing the appeal in the first case and dismissing the appeals in the second, that when an undertaking was transferred under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (SI 1794 No 1981), a transferors liability in tort to an employee in respect of a personal injury which had accrued before the transfer would be transferred to the transferee by virtue of reg.5(2); and that where the transferor had effected an employers liability insurance policy, the transferors right of indemnity under that policy would also be transferred to the transferee by virtue of that regulation.

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