Will you be held responsible? A look at recent decisions involving vicarious liability

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The current test for considering whether there is vicarious liability has recently been looked at by the Court of Appeal in Various Claimants v Barclays Bank. We assess the practical consequences for employers and their insurers.

In recent times, the courts have extended the scope of vicarious liability in a way that has rightly attracted media attention and raised concerns amongst employers and their insurers. In doing so, the courts have considered the kinds of relationship which could give rise to an employer’s liability and the necessary level of connection between the employment itself and the act in question. There is little doubt that an employer’s potential liability has been widened in a way which will render more employers (and their insurers) liable in more circumstances.

The traditional test

It is established law that an employer can be held liable for the negligent act carried out by his employee in the course of their employment. The test traditionally adopted by the courts means that the act will be seen as being “in the course of employment” if either (a) a wrongful act is authorised by the master, or (b) a wrongful act which is an unauthorised mode of doing some act is authorised by the master. Where the act is a criminal act, an employer can still be vicariously liable if the act has a sufficiently close connection with the role for which the employee was employed.

The current test

The current test for considering whether there is vicarious liability was discussed in Various Claimants v Barclays Bank (2018). The case concerned a group action brought by a number of claimants who alleged they had been sexually assaulted by a doctor who was performing pre-employment medical examinations on them on behalf of the bank. The High Court found that the bank was capable of being vicariously liable for the sexual assaults committed by the doctor despite the fact that the doctor was not an employee of the bank. The Court of Appeal has recently upheld the decision. 

The current test requires consideration of the following questions:

  • Is the relevant relationship one of employment or akin to employment?
  • If so, was the tort or wrongful act sufficiently closely connected with that employment or quasi-employment?

As Lord Clyde put it in Lister v Hesley Hall Ltd (2001), “the sufficiency of the connection may be gauged by asking whether the wrongful actions can be seen as ways of carrying out the work which the employer had authorised”. It is clear that each case will depend on its own particular facts. 

Relationship akin to employment

In Cox v Ministry of Justice (2016) the Supreme Court gave guidance as to the kind of factor that a defendant will need to point to if they are to avoid a finding of vicarious liability. Vicarious liability will not be imposed when a tortfeasor’s activities are entirely attributable to the conduct of an independent business of his own or of a third party. 

This case concerned a Ministry of Justice employee in a prison catering team who was negligently injured by a prisoner working in the same team, but (being a prisoner) not technically employed. The lower court held that the relationship between the prisoner and the Ministry of Justice was not akin to employment and that the prison service could therefore not be liable. This decision was overturned in the Court of Appeal, and the appeal was upheld in the Supreme Court. The Supreme Court applied five different factors in determining the liability of the Ministry of Justice and stated that generally an employer “cannot avoid vicarious liability on the basis of technical arguments about the employment status of the individual”.

Other factors that may be relevant to whether there is a relationship akin to employment include:

  • Whether the “employer” has responsibility for assigning work/ appointments to the “employee”.
  • If the “employer” has concerns about the quality of an “employee’s” work, could he give directions about improving this? If so, that probably points towards a relationship akin to employment. In E v English Province of Our Lady of Charity (2012), although a priest was not subject to direct control in the sense of a bishop checking on him every day, the court found there was a level of control in the sense that if certain things did not happen then action could be taken. That was a factor supporting vicarious liability.
  • Are any audits done by the “employer” (eg of record keeping, compliance with policies etc)? If so, that probably points towards a relationship akin to employment.

Sufficiently close connection

The case of Mohamud v WM Morrison Supermarket plc (2016) makes interesting reading and received widespread publicity at the time. In this case, a customer attending a supermarket petrol station was verbally abused by an employee who refused to serve him before telling him never to return to the premises, following him outside to his car and subjecting him to a serious attack. The customer had done nothing to initiate the incident.

At first instance and, in the Court of Appeal, it was held that there was an insufficiently close connection between the employee’s actions and his job description for the employer to be liable: there was no reason for Morrisons to expect that the attendant would come into physical contact with the customer in the way that he did.

Nevertheless, the Supreme Court overturned these rulings. Although Lord Toulson recognised it as “obvious that [the employee] was motivated by personal racism rather than a desire to benefit his employer’s business”, he stated that this was “neither here nor there”. Although the employee abused his position, there was indeed a sufficiently close connection between the employee serving the customers of the business and his wrongful act. It was therefore down to the employer to bear that risk.

This judgment will come as a comfort to those who bring claims as a result of an employee committing a negligent or criminal act in the workplace. However, it is a concern for both employers and their insurers, who will now face having to compensate injured parties to whom they would not previously have been liable.

Conclusion

The recent cases highlight a new concern for employers and their insurers. It is clear that the vicarious liability doctrine will continue to be developed by the courts and is potentially applicable in an extremely wide range of circumstances. The key question is whether or not the employer takes on the risk of the wrongful act occurring by assigning part of the business’s activities to another. For example, in a healthcare context, we could see more claims against the healthcare providers who may exercise some degree of control over workers engaged by them even if they are regarded as independent contractors. This particular issue has not yet been addressed in the courts. 

Click here to read our briefing about the recent Court of Appeal decision in Various Claimants v Barclays Bank.

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