Vicarious Liability: when can an employer be liable for the actions of their employees?

In July 2018 we had a Court of Appeal case (Barclays Bank Plc v Various Claimants (2018)) which upheld the original decision made a year ago that a company could be liable for actions not just of an ‘employee’ but also of an independent contractor.

What is Vicarious Liability?

It is well established that where a wrongdoer is an employee (or in a relationship akin to employment) and the wrongdoing complained of is closely connected to their role, then an employer can be liable in law for that wrongdoing. This can be regardless of the fact that the wrongdoing is not endorsed by the company and in breach of the employee’s contract.

The Criteria for Vicarious Liability

This was established in the case of Various Claimants v Catholic Child Welfare Society & Ors (2012) when the Supreme Court set out the following criteria for consideration in order to establish vicarious liability:

1. The relationship between the wrongdoer and the company
2. The close connection between the nature of employment and the wrongdoing

When Vicarious Liability can be established

Here are a couple of cases where Vicarious Liability had been established to show how the scope of liability has been ever expanding.

Ministry of Defence v Radclyffe (2009)

A soldier was encouraged to jump off a bridge by an army officer whilst they were off-site and off duty. He sustained personal injury as a result.

The court held that the army officer (and therefore the Ministry of Defence) owed a duty to the soldier and that by reason of his rank he had assumed responsibility to prevent them from the risk of injury. It was relevant that the soldier had asked the army officer whether he should jump and so it was held that he had authority to order that the soldier not jump and that such authority came from the fact of his rant and his and their military employment.

Cox v Ministry of Justice (2016)

The claimant worked for JM Prison Swansea supervising in the prison kitchen. She was injured by a prisoner. The Supreme Court agreed with the Court of Appeal and held that the Ministry of Justice was liable because the relationship between the prisoner (working under the supervision of Ms Cox in the prison kitchen) and the Ministry of Justice was akin to an employment contract. They were persuaded by the fact that the injury was done by the prisoner who was carrying on activities as an integral part of and for the benefit of the prison (providing meals for prisoners) and the prison had created a risk of the prisoner committing injury to someone else by assigning him to work in the kitchen.

Various Claimants v WM Morrison Supermarkets Plc (2017)

An employee downloaded confidential and sensitive data of other employees and then posted this data (from his home computer on a Sunday) onto a file-sharing website.

Despite the fact that it was done when the employee was not at work or in fact working, the court found that as his role was to receive and store payroll information, the ‘disclosure’ was a ‘seamless and continuance sequence of events’ from when he received the data.

Barclays Bank v Various Claimants (2018)

Dr Bates was employed as an independent contractor by Barclays Bank to undertake medical examinations of existing and future employees. The medical examinations took place at Dr Bates home and he was paid a set fee for each examination. Dr Bates died in 2009 but in 2013 a police enquiry unearthed evidence of sexual assault during such examinations.

Last month the Court of Appeal upheld the original decision which found Barclays Bank liable for the sexual assaults committed by Dr Bates.

Firstly, the medical examinations were for the benefit of Barclays and an integral part of their business activity (selection of appropriate employees). Secondly, the risk of harm arose from the arrangements made by Barclays to facilitate and prescribe such examinations. The employees were not offered any alternative doctor and had no real choice to refuse the medical examination, and would not have undergone the medical examination but for being employed (or due to be employed) by Barclays.

The original judge relied on the comment made in E v English Province of Our Lady of Charity [2012] EWCA Civ 938, that the “law of vicarious liability had moved beyond the confines of a contract of service”

Irwin LJ who gave the main judgment concluded that “changes in the structures of employment, and of contracts for the provisions of services, are widespread. Operations intrinsic to a business enterprise are routinely performed by independent contractors, over long periods, accompanied by precise obligations and high levels of control.”

What does this all mean?

Courts have shown an increasing willingness to be flexible about what sort of arrangements are ‘akin’ to employment relationships in order to find vicarious liability for claimants where it is fair just and reasonable to do so.

I think this is usually motivated by the inherent fact that companies are more likely to have the means to compensate victims (as they are usually insured for such liability) and failing this the victims would be left with no recourse for compensation. In the Barclays Bank case, Dr Bates had died and his estate had been administered by the time his wrongdoing was discovered.

This, unfortunately, means greater scrutiny by companies of their employees and their conduct given the increasing risk of being made liable and to ensure they have sufficient indemnity insurance against such liability.