This blog was co-authored by: Tristan Marot, associate designate
In the high court judgment Legal Expenses Insurance Southern Africa Limited t/a Legalwise v Melamu, the high court confirmed that as a “general rule an employer is not liable for the wrongdoing of an independent contractor unless the employer was personally at fault.”
The plaintiff sued a legal expenses insurer for damages resulting from the alleged negligence of the attorneys appointed to act for the insured.
A principal is only liable for the negligence of their independent contractor if it can be shown that there was a legal duty on the part of the principal to take steps to prevent harm to members of the public at the hands of the independent contractor and the principal failed to take those steps or the principal is otherwise personally negligent.
If an insured wished to bring a claim against an insurer for vicarious liability due to the wrong doing of the attorneys appointed as third party service providers, the insured would need to establish that there was a legal duty upon the insurer to take steps, and that it had not taken such steps, to prevent the harm which occurred.
This judgment confirms that when a third party service provider provides work for which costs the insurer gives an indemnity, such as the legal expenses in this case, the relationship is still between the insured and the third party service provider. That remains the case even if the insurer recommends a apparently competent third party service provider and the insured has a choice of appointing a provider of their own choice, while bearing any cost consequences. As no breach of any duty of the insurer had been alleged, the summons was set aside with leave to amend.