Is an employer liable for criminal wrongs committed by staff?

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What are the factors that determine whether an employer can be considered liable for their employees misdeeds?

In the case of Lister v Hesley Hall (Lister) the court decided that in order to impose a vicarious liability on an employer there should be a sufficiently close connection between the work being done by the employee and the wrong committed. In Lister a warden managed a residence connected with a school and the claim for damages against the school was based on abuse by the warden against the boys in the residence. The court decided that a degree of intimacy could be part of the warden’s work. The close connection between legitimate and illegitimate touching was established.

Although there were public policy issues at the time the Lister case was heard, which allowed the court to develop the law around vicarious liability, especially in relation to cases of child abuse, the close connection test extends to other types of cases but the issue remains one of demonstrating a connection between the work done and the wrong committed.

In Mohamud v WM Morrison Supermarkets (Morrison) an employee of the supermarket, employed to manage a filling station kiosk, responded to what seemed an innocuous enquiry from a customer with a violent attack. In the Court of Appeal, it was decided there was no sufficiently close connection between the kiosk job that required the employee to have regular contact and interactions with customers and the assault on a particular customer. The case was appealed to the Supreme Court which decided that courts must consider what it referred to as the ‘field of activities’ and that it should assess the close connection test ‘broadly’. The analysis of the Supreme Court was that the employee was required to ‘attend to customers and respond to their enquiries’ and that he was doing just that, albeit acting criminally, when he attacked the customer.

In the case of Mattis v Pollock (Mattis), a doorman employed at a nightclub owned by Mr Pollock attacked a customer. The customer sued the owner and at first instance the court found that the incident in the club, between the doorman and the customer, which in due course led to a violent attack on the customer by the doorman outside the club later in the evening, was not sufficiently closely connected to the employment of the doorman.

The Court of Appeal rejected that stating:
“The stabbing of Mr Mattis represented the unfortunate, and virtual culmination of the unpleasant incident which had started within the club, and could not fairly and justly be treated in isolation from earlier events, or as a separate and distinct incident. Even allowing that [the doorman’s] behaviour included an important element of personal revenge, approaching the matter broadly, at the moment when Mr Mattis was stabbed, the responsibility of Mr Pollock for the actions of his aggressive doorman was not extinguished. Vicarious liability was therefore established. Accordingly the appeal on this ground must succeed”.

Coming back to the Morrison case and adopting the device used in Mattis, Lord Toulson described the attack on the customer as part of an ‘unbroken sequence of events’ and held the supermarket vicariously liable.

If one looks to analyse this decision one sees a much broader application of the close connection test and one that might be interpreted as allowing the court to respond to policy or mood developments and the particular fairness required on the facts of the case. If the employee was on duty, the attack was vicious, and there was insurance in place to cover the employer, the courts might have an incentive to find vicarious liability on the part of the employer.

In Lister, Law Lords formulated a looser test concerned with asking whether the risks of harm were reasonably incidental to the employment. This test also required some proximity (not necessarily a close connection) between the nature of the work and the tort committed. It was the fact that the wrongdoer was a warden at the home connected to the school, with an obvious duty to attend to the boys living there, which demonstrated proximity, which, so the Law Lord stated he would not have identified had the wrongdoer been a porter or groundsman.

So much for employees, but a growing trend is developing around whether employers should be liable for the actions of independent contractors. Generally employers are not held liable for contractors, however there are exceptions to this. One exception is where there is a non-delegable duty, which is to say that the employer fails to supervise the contractor properly. Another would be where the employer fails to take sufficient steps to ensure a competent contractor is appointed. In such cases an employer may still be found vicariously liable. In addition it may be possible that a contractor can be deemed to be a “de facto employee”. Whether they are will depend on the facts of the case, and matters such as the degree of control exercised by the employer or the extent to which equipment and assistance is provided for the contractor to carry out their role.

Public policy may also play a part. Consider for example the surgeon, acting independently on practising privileges, within the environment of an independent healthcare provider. While indemnified, his indemnity provider has declined to indemnify him, which in a discretionary indemnity situation they are perfectly entitled to do. He is therefore without indemnity cover for the claim that we are theorising is now made against him by a patient.

Although he does not have the means to meet the claim he now faces, the provider will in all probability have insurance in place. How will a court deal with a claim levelled at the provider, alleging vicarious liability for the acts of the contractor surgeon?

To be continued…
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