Peculiar Risk Doctrine California
"Under the doctrine of peculiar risk, a person who hires an independent contractor to do inherently dangerous work can be held liable for tort damages when the contractor causes injury to others by negligently performing the work.
The doctrine serves to ensure that innocent bystanders or neighboring landowners injured by the hired contractor's negligence will have a source of compensation even if the contractor turns out to be insolvent." (Toland, supra,18 Cal. 4th at p. 256.)
Although the doctrine of peculiar risk was at one time applied to the benefit of the independent contractor's own employees (see Woolen v. Aerojet General Corp (1962) 57 Cal. 2d 407, 20 Cal. Rptr. 12, 369 P.2d 708 and its progeny), in Privette the Supreme Court reversed this line of authority, reasoning that the doctrine should not extend to the contractor's employees because they receive payment for their injuries through workers' compensation.
The court therefore held that an employee who is harmed by the negligence of the independent contractor cannot sue the nonnegligent hirer of the independent contractor.
In Toland v. Sunland Housing Group, Inc., supra, 18 Cal. 4th 253, the Supreme Court "clarified" Privette (Toland, at p. 264, 74 Cal. Rptr. 2d 878, 955 P.2d 504) by explaining that Privette bars suits by an employee of an independent contractor against the hirer of the independent contractor "irrespective of whether recovery is sought under the theory of peculiar risk set forth in section 416 or section 413 ...." (Toland, at p. 267.)
Section 416 appears under the topic "Harm Caused by Negligence of a Carefully Selected Independent Contractor" and is entitled "Work Dangerous in Absence of Special Precautions." It reads:
"One who employs an independent contractor to do work which the employer should recognize as likely to create during its progress a peculiar risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the failure of the contractor to exercise reasonable care to take such precautions, even though the employer has provided for such precautions in the contract or otherwise."
Section 413, found under the topic "Harm Caused by Fault of Employers of Independent Contractors," is entitled "Duty to Provide for Taking of Precautions Against Dangers Involved in Work Entrusted to Contractor." It provides:
"One who employs an independent contractor to do work which the employer should recognize as likely to create, during its progress, a peculiar unreasonable risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the absence of such precautions if the employer (a) fails to provide in the contract that the contractor shall take such precautions, or (b) fails to exercise reasonable care to provide in some other manner for the taking of precautions."
The court believed that "in either situation it would be unfair to impose liability on the hiring person when the liability of the contractor, the one primarily responsible for the worker's on-the-job injuries, is limited to providing workers' compensation coverage." (Ibid.)
The court also thought it "illogical and unfair that a landowner or other person who hires an independent contractor should have greater liability for the independent contractor's negligence towards the contractor's employees than the independent contractor whose liability is limited to providing workers' compensation coverage." (Id. at p. 270.)
The Privette-Toland rule, therefore, insulates the hirer of an independent contractor from all forms of vicarious liability to the contractor's employees for injuries caused by the contractor's negligence.
In Privette v. Superior Court (1993) 5 Cal.4th 689, the California Supreme Court examined the "peculiar risk doctrine," an exception to the common-law rule of nonliability of property owners for injuries to third parties resulting from work that was negligently performed on the property by independent contractors.
The peculiar risk doctrine made property owners liable for injuries to an independent contractor's employees performing inherently dangerous work on the owner's land. It was believed that allocating the risk of loss to the hiring property owner, for whose benefit the work was performed, would more fairly ensure compensation to the innocent victim and promote workplace safety.
In Privette, however, the court held that those justifications did not apply when the contractor's employee could recover from the workers' compensation system. "[I]n the case of on-the-job injury to an employee of an independent contractor, the worker's compensation system of recovery regardless of fault achieves the identical purposes that underlie recovery under the doctrine of peculiar risk." (Id. at p. 701.)