Vicarious liability (again): the brakes are on

Justin Clayden considers the recent decisions on vicarious liability.

In the last two years there have been a number of reported decisions touching on aspects of vicarious liability and following a potential broadening of the traditional applicable principles both to the actions of tortfeasor employees and independent contractors. The Supreme Court has recently reviewed the application in both contexts and taken the opportunity to readdress the principles applying in both situations in two judgments handed down in April.

The principle of vicarious liability was originally described by Salmond as a wrongful act by a servant in the course of his employment as “either (a) a wrongful act authorised by the master or (b) a wrongful or unauthorised mode of doing some act authorised by the master, if they are so connected with acts which he has authorised that they might rightly be regarded as modes –although improper modes of doing them”.

The earlier principles of the liability of an employer for the acts of the employee have been developed since then; in Cox-v- Ministry of Justice , the Court of Appeal found that the strict master and servant relationship was not required; the relationship had only to be akin to employment. In that case the relationship between the Ministry of Justice and a prisoner (that caused the accident to Ms Cox) working in a prison kitchen was found to meet those criteria.

The principle also extended to the situation of unincorporated associations in Various Claimants v Institute of the Brothers of Christian Schools where the defendant was found vicariously liable for the sexual assault of one its headmaster bothers.

The decision in Lister & Others v Hesley Hall Ltd found that the sexual abuse of the housemaster (on and off the premises) was so closely connected to the activities delegated to him that it established the necessary proximity for a finding of vicarious liability and commented on the foreseeable risk of assaults on the pupils by employing the housemaster.

The cases had therefore developed both as to the extent in which the employer could be found liable, but also to situations where the tortfeasor was not an employee in the traditional sense and the impression was that the development of the applicable principle to the consider the merits adopting fair just and reasonable considerations taking into account various policy reasons. These “incidents” included the employer’s means to compensate the victim; the commission of a tort by the employee on behalf of the employer; the employee’s activity and the extent to which it is part of the business activity of the employer; the creation of the risk by the employer of the tort committed by the employee; and the extent of control of the employer over the employee.

Cases have seen an aggressive overenthusiastic and unlicensed bouncer at a nightclub making his employer responsible for his assaults on members of the public, and also petrol attendants in altercations with members of the public. In David Wilson Mattis v Gerrard Pollock (t/a Flamingo’s Nightclub) , the owner of a nightclub was found liable on appeal for the assault by the irate nightclub bouncer who, having lost out in an altercation while at work, went home and returned armed with a knife and carried out a further assault.

The principles of vicarious liability had been held to turn around two issues: firstly, the nature of the functions or field of activities entrusted by the employer to the tortfeasor/employee, and secondly the extent to which there is sufficient connection between the employee’s position and the wrongful conduct to justify making the employer liable.
The development of the principle can be seen by the contrasting outcomes of two assaults that were carried out by petrol pump attendants (Warren –v- Henleys and Ahmed Mohamud –v- Wm Morrison Supermarkets Plc ). In Warren, an assault occurred when the affronted customer returned to the garage with a policeman, but the assault was found to be separate from the employee’s work and the principle did not apply. In Mohamud it was suggested that the attendant in Warren had metaphorically taken off his work jacket; not so in Mohamud. In the former the later assault by the attendant was found not to have been so closely connected; in Mohamud the assault was so closely undertaken to his work that it was.

The Court of Appeal decision In Clive Bellman LJ v Northampton Recuitment Ltd specifically questioned whether the time gap between employment work and the incident should be identified as the key factor (and possibly the court had given too much emphasis on this in Warren).

Bellman concerned the late night assault by the managing director of the defendant recruitment agency at the end of a Christmas party and further drinking at a hotel after a furious row regarding a work issue. While stressing that the circumstances of the case were exceptional, the Court of Appeal concluded that the assault was found to be sufficiently closely connected to an exercise of authority by the director to allow a finding of vicarious liability.

The Supreme Court’s recent two decisions have considered not only the principle within the context of an employee’s actions but also the extent of an employer’s liability for the activities of an independent contractor/third party rather than a formal employee.

Anderson involved the attempted disclosure by a disgruntled accounts employee of Morrisons’ payroll to national newspapers. Much of the judgment turns on the impact of the offence under the Data Protection Act 1998 (by the employee, rather than Morrisons) and whether the wording of the statute prevented any claim of vicarious liability (it did not).

The employee copied the payroll details during work, but he sent the information to national newspapers outside work hours some months later from home. It was argued by the defendant that there was a key time gap between his actions at work and the subsequent disclosure. The court at first instance and the Court of Appeal found that there was a “seamless and continuous sequence”. His actions occurred when he copied the details and the tortious acts of the employee were within the field of activities assigned to him by Morrisons.

The Supreme Court disagreed after reviewing the authorities (and in particular Dubai Aluminium Co Ltd v Salaam ) and reconsidering the close connection test and the “field of activities” entrusted by the employer to the employee. The court found that the disclosure did not form part of the employee’s authorised activity. The fact that his employment with Morrisons gave him the opportunity was not sufficient to justify a finding of vicarious liability, particularly in circumstances where the employee was pursuing a personal vendetta against his employer.

In the second of the cases, Barclays Bank plc v Various Claimants, the Supreme Court had to consider whether the sexual assaults of a GP when undertaking medical examination of prospective employees of the bank gave rise to an instance of vicarious liability. The courts below found that it did. However, the Supreme Court disagreed and went back to review the differences between an employee and an independent contractor from current caselaw. The Court found that the classic distinction between employer/employees and relationships akin or analogous to employment on the one hand and independent contractors had not been eroded.

The GP was not an employee of the bank, or anything close to an employee. He was paid per examination and was free to refuse to carry out an examination if required. He was in business on his own account as a medical practitioner. He was an independent contractor and therefore the claim of vicarious liability failed.

The recent decisions have therefore attempted to restate the key principles applicable to vicarious liability. In both decisions however the Court did not criticise the findings in either the Cox and Lister cases and the considerations (“the incidents”) to be used in determining where the tortfeasor is in a relationship with the employer closely connected or akin to employment. The two recent decisions where the employee’s actions on his own account (Morrisons) and cases where the actions were undertaken by an independent contractor (Barclays) would not give rise to vicarious liability. It will be interesting to see in future cases that require consideration of the nature of the relationship to identify on which side of the fence individual instances fall.

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