This case concerning the limits of vicarious liability may provide some comfort to employers and their insurers where the wrongdoing occurred away from work premises and outside working hours. The judgment of HHJ Cotter QC, sitting as a Judge of the High Court, was handed down on 13 December 2016.
The Claimant was employed by the Defendant company as a sales manager. On 17 December 2011 he was assaulted by the Defendant’s Managing Director and suffered serious brain damage. The claim alleged that the Defendant was vicariously liable for its Managing Director’s assault.
The Christmas party
The assault took place after the Defendant’s annual Christmas party, described by HHJ Cotter QC as:
“an ordinary or usual work Christmas party of the type no doubted dreaded by some and an annual highlight for others. Not surprisingly alcohol was consumed by many attending.”
The party took place at the Collingtree Golf Club near Northampton and there was “an expectation or obligation that employees would attend …, unless there was a good excuse.” All but one of the Defendant company’s 11 staff did attend and partners were invited. The Managing Director and his wife brought their two children and two other guests. Altogether 24 people attended the party at the golf club.
The after-party gathering
When the party at the golf club ended, a little over half of the original 24 guests travelled from the golf club to a nearby hotel in taxis, which “were organised and probably paid for by the Defendant.” The hotel was chosen because many of the guests were being put up there by the Defendant. The taxis arrived at the hotel at about 12:30. They all sat together talking in the hotel lobby and more alcohol was consumed, most of which (the judge was prepared to assume) was provided at the Defendant’s expense. The judge characterised this gathering as an “impromptu drink” rather than “a pre-planned extension to the party.”
For the first 45 minutes there was “general chit chat between those present on a variety of topics.” Shortly before 02:00, conversation turned to work, “including plans for the company in the following year.” The Managing Director then “continued to talk about company business” until his assault on the Claimant at around 03:00.
The altercation and assault
The Claimant, the Managing Director and another member of staff went outside the hotel lobby at around 02:45 and stood in a group. The Claimant questioned the Managing Director about his recent appointment of a new employee, Mr Steven Kelly, to the Defendant’s Northampton office.
In response, the Managing Director “‘stormed’ off or at least pointedly left and returned inside the hotel lobby.” He was by this point “probably significantly inebriated”. An altercation then developed:
- The Managing Director “summoned” the remaining members of staff and “began to lecture them on how he owned the company, that he was in charge and that he would do what he wanted to do; that the decisions were his to take and that he paid their wages.”
- After further mention of Mr Kelly, he said “Fucking Steven Kelly is in the right fucking place.”
- The Claimant “in a non-aggressive manner, challenged this stating that it would be better if [Mr Kelly] were based at Nuneaton.”
- The Managing Director moved towards him, stating “I fucking make the decisions in this company it’s my business. If I want him based in Northampton he will be fucking based there.”
- The Managing Director then punched the Claimant for the first time, causing the Claimant to fall. When the Claimant got back up, the Managing Director was restrained by other attendees, but broke free and punched the Claimant again. The Claimant fell backwards and hit his head on the ground.
The sole legal issue at trial was whether the Defendant was vicariously liable for the Managing Director’s wrongdoing. The court considered the two-stage test articulated by Lord Toulson JSC in Mohamud-v-WM Morrison Supermarkets Plc  UKSC 11;  AC 677, 693 (paras. 44-45) whereby the court must consider: (1) “what functions or “field of activities” have been entrusted by the employer to the employee” and (2) “whether there was sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable” as a matter of social justice.
The judge held that the assault was insufficiently connected with the Managing Director’s employment and accordingly dismissed the claim. He identified three factors of particular importance:
- There was a “temporal and substantive” difference between the Christmas party and the subsequent gathering at the hotel: when the organised event at the golf club ended, “a line could be drawn under the evening’s event.” There was then no expectation that the employees would go on to the hotel.
- The mere discussion of “something that relates to duties at work” could not have the effect of itself changing an otherwise non-work-related interaction into something which occurred “in the course of employment.” The judge rejected the Claimant’s case, holding that it placed too much weight on “what was being discussed, rather than the time and place of the discussion.” The alternative, he reasoned, would render “a company’s potential liability…so wide as to be potentially uninsurable.”
- Although the Defendant had provided alcohol at the party, “any increased risk of confrontation at the Christmas party…did not materialise”; the additional alcohol at the hotel cannot be seen “as properly adding support to a finding of vicarious liability, as it was so far removed from employment.”
The judge summarised his conclusion in the following terms:
“Standing back and considering matters broadly, what was taking place at 3.00 a.m. at the hotel was a drunken discussion that rose after a personal choice to have yet further alcohol long after a works event had ended. Given the time and place, when the conversation was, as it was for a significant time, on social or sporting topics, no objective observer would have seen any connection at all with the jobs of those employees of the Defendant present. That it then veered into a discussion about work cannot provide a sufficient connection to support a finding of vicarious liability against the company that employed them. It was, or without any doubt became, an entirely independent, voluntary, and discreet early hours drinking session of a very different nature to the Christmas party and unconnected with the Defendant’s business. To use a hackneyed expression akin to “a frolic” of their own.”
The outcome in Bellman will lend support to employers and their insurers when seeking to resist the imposition of vicarious liability for employees’ wrongdoing outside of working hours and away from work premises. In particular, those representing defendants will note the striking importance attached to the time and place of the wrongdoing, which supported the judge’s conclusion despite his express findings that: (1) the Managing Director’s duties included “the maintenance of managerial authority”, (2) the job involved running “a round-the-clock… operation” and lacked fixed hours, and (3) it was the “challenge to one of his managerial decisions that was the trigger for the assault.”
However, the importance attached to the “temporal and substantive difference” between the organised Christmas party and the subsequent drinks suggests that the Defendant might well have been found liable had the assault occurred earlier in the evening at the golf club.
Defendants minded to rely on Bellman should also note that the Claimant has applied for permission to appeal to the Court of Appeal.