In 2012 it was said by Lord Phillips that ‘the law of vicarious liability is on the move’ (Various claimants v Catholic Child Welfare Society [2012] UKSC 56, [2013] 2 A.C. 1, “Christian Brothers”). Eleanor Duckenfield and Jessica Franklin examine the Supreme Court’s recent decisions on vicarious liability and observe that that the brakes have now firmly been applied.
The doctrine of vicarious liability enables one person to be held liable for the torts of another. The doctrine developed significantly in the 20th century and the authorities became piecemeal and at times inconsistent. The Supreme Court attempted to clarify the principles of vicarious liability in 2016 with Cox v Ministry of Justice [2016] UKSC 10; [2016] A.C. 660 (“Cox”) and Mohamud v Morrison Supermarkets plc [2016] UKSC 11; [2016] A.C. 677 (“Morrison’s 1”); and in 2020 with Barclays Bank plc v Various claimants [2020] UKSC 13; [2020] A.C. 973 (“Barclays”) and Morrison Supermarkets plc v Various claimants [2020] UKSC 12; [2020] A.C. 989 (“Morrison’s 2”). This article reviews those decisions.
Two limbs must be satisfied to establish vicarious liability:
(1) The first is a relationship between the two persons which makes it proper for one to be liable for the other. This is the subject matter of Cox and Barclays.
(2) The second is a sufficiently close connection between the field of activities assigned to the tortfeasor and his wrongdoing. This is the subject matter of Morrison’s 1 and Morrison’s 2.
The first limb
Historically, vicarious liability was confined to a relationship between employer and employee. Multiple recent Supreme Court cases (Christian Brothers, Cox, Armes v Nottinghamshire CC [2017] UKSC 60; [2018] A.C. 355 and others) significantly widened the types of relationships upon which vicarious liability could be imposed.
A prison was held liable in Cox for the negligent act of a prisoner working in the kitchen who was receiving a nominal wage for incentive. In applying the five policy reasons from Christian Brothers, the Supreme Court liberally extended the doctrine to an employer who was not furthering a business enterprise and to a worker who was not bound by a contract or earning a proper wage.
Barclays abruptly immobilised this movement. The late Dr Bates, a medical practitioner, was contracted by Barclays to perform medical examinations of job applicants as part of Barclays’ recruitment process. A group litigation claim was brought against Barclays for sexual assaults performed by Dr Bates during these examinations. The Supreme Court overturned the decision of the Court of Appeal, which had upheld the High Court judgment, and held that Barclays was not vicariously liable; Dr Bates was an independent contractor and at no stage was the relationship between Dr Bates and Barclays ‘akin to employment’.
On the face of it, Barclays re-affirms the apparent distinct line between an employee, or a relationship akin to employment, and an independent contractor. However, despite clarifying this division, the case does not clarify how the division is to be drawn and has perhaps, in practice, created indistinct boundaries.
In Barclays Lady Hale outlinedthatthe facts and details of the relationship itself are crucial. The statutory definitions of ‘worker’ in the Employment Rights Act 1996 were highlighted as a ‘tempting’ pointer. The statutory definition was held to be possibly helpful in identifying ‘true’ independent contractors, yet any exact alignment with vicarious liability was warned against. To do so would be to go ‘too far down the road to tidiness’. Unfortunately, the judgment did not provide further guidance for categorising the relationship and the mere suggestion of the statutory definition being an aid may lead to the two becoming more entwined. This could further narrow the application of vicarious liability; many relationships akin to employment would not fit within the statutory definition of ‘worker’, such as those in religious organisations.
When considering whether or not a relationship was akin to employment, many judgments following Christian Brothers applied its five policy principles. Despite not establishing strict criteria, it focused the application of the doctrine on the policy reasons behind it. In each case, the Supreme Court never expressly stated that these policy reasons cannot or should not be applied to independent contractors, until Barclays. Despite Lady Hale’s reminder that the reason behind the development of a legal concept is pertinent, the reason behind the separation of employees and independent contractors is unclear; the Supreme Court in Barclays relies mainly on the fact that it is ‘trite law’. Its unwillingness to consider an employer’s liability for an independent contractor may lead to further cases where the policy underpinning vicarious liability is revisited in order to elucidate why independent contractors are excluded. In the meantime, a consequence of the narrowing of liability may mean more claims brought through the Criminal Injuries Compensation Scheme.
The status of ‘independent contractor’ is arguably more important than ever. With the evolvement of the ‘gig’ economy and complexities surrounding the definition of ‘worker’ and ‘employee’, the law surrounding vicarious liability may not be so trite anymore.
For now, Barclays has closed the door on the possibility of it being fair, just or reasonable to impose vicarious liability in a case involving an independent contractor. However, whether an individual is ‘carrying on their own business’ or is in ‘a relationship akin to employment’ is a dichotomy that is difficult to apply. In order to achieve consistency, a clearer and more specific way of identifying the different statuses would be welcome.
We have a lot further ‘down the road to tidiness’ to go.
The second limb
In Morrison’s 1, the claimant, Mr Mohamud, visited a petrol station kiosk run by the defendant, Morrison’s. The claimant made an inquiry at the kiosk and was met with a barrage of racist verbal abuse by the kiosk attendant, Mr Khan, who was an employee of the defendant. The claimant walked out and returned to his car but was followed by Mr Khan who ordered him never to come back. Mr Khan proceeded to violently attack the claimant on the petrol station forecourt.
In Morrison’s 2, the claimants were 9,263 employees of the defendant Morrison’s. Mr Skelton was a senior auditor of Morrison’s and was tasked with collating and transmitting the payroll data of the whole of Morrison’s workforce to KPMG for external audit. Mr Skelton had become disgruntled with his employer and, in retaliation, decided to copy the payroll data onto a USB stick and, from his home, unlawfully upload it onto a public website.
In Morrison’s 1, the defendant was held vicariously liable for its rogue employee. Conversely, in Morrison’s 2, the defendant was not. The judgments agree that the test requires a two-stage approach. Firstly, to identify first the function or field of activities assigned to the tortfeasor. Secondly, to assess whether the tort was sufficiently connected to that function for vicarious liability to be established. The outcome of each judgment, however, turns on how broadly or narrowly that close connection test is construed:
Morrison’s 1 took the broad approach. ‘[It] was Mr Khan’s job to attend to customers and to respond to their inquiries. His conduct in answering the claimant’s request in a foul-mouthed way and ordering him to leave was inexcusable but within the “field of activities” assigned to him. What happened thereafter was an unbroken sequence of events.’
Morrison’s 2 took the narrow. Although Mr Skelton was tasked with transmitting payroll data, ‘the disclosure of the data on the Internet did not form part of Skelton’s functions or field of activities.’
After a significant period of expansion in the doctrine, the Supreme Court in Morrison’s 2 suddenly endorsed a more restrictive application. Morrison’s was not liable because, the judgment explained, disclosing the data on the internet ‘was not an act which [Mr Skelton] was authorised to do.’ Such a strict application is somewhat dubious – it is hard to envisage a situation in which a tort was an act which the employee was authorised to do. In that passage, the close connection test is construed so narrowly that it nearly collapses into a question of primary, rather than vicarious, liability.
Perhaps cognisant of the repercussions for the sexual abuse cases of such a strict test, the court in Morrison’s 2 distinguished sexual abuse cases in which ‘a more tailored version of the close connection test is applied’. This observation is somewhat hurried but apparently establishes that there are different close connection tests depending on the tort committed. The implications of this are significant and it arguable the door is now open to further ‘tailoring’.
In an attempt to be consistent with the previous caselaw, while at the same time narrowing the test, there are unsurprisingly some areas of the doctrine which are left unclear:
Firstly, regarding motive. It was said in Morrison’s 1 that it was ‘obvious that [Mr Khan] was motivated by personal racism rather than a desire to benefit his employer’s business, but that is neither here nor there.’ On the other hand, in Morrison’s 2, it was ‘abundantly clear that Skelton was not engaged in furthering his employer’s business when he committed the wrongdoing in question. On the contrary, he was pursuing a personal vendetta.’ What mindset, then, must the tortfeasor possess for the close connection test to be satisfied? Does the test only exclude premeditated acts of vengeance (which are presumably rare), or is the exclusion wider?
Secondly, regarding the chain of causation. In Morrison’s 2 it was said that, while there was a ‘close temporal link’ and an ‘unbroken chain of causation’ between the provision of data to Mr Skelton and its subsequent disclosure, ‘a temporal or casual connection does not in itself satisfy the close connection test.’ This is apparently at odds with the Morrison’s 1 finding that, although Mr Khan’s job was to serve customers at the kiosk, when he left that kiosk and followed Mr Mohamud to his car there was an ‘unbroken sequence of events’.
In giving advice in the wake of Morrison’s 1 and 2, lawyers should be alert to the fact that whether an action is within the course of employment can turn on facts that may seem incidental. It was crucial to the establishment of vicarious liability that Mr Khan told Mr Mohamud never to come back to Morrison’s. ‘In giving such an order’, reasoned the Supreme Court, ‘he was purporting to act about his employer’s business’. This was followed in Bellman v Northampton Recruitment Limited [2018] EWCA Civ 2214; [2019] ICR 459. In that case, the employer was vicariously liable for its manager’s assault of an employee during a late-night hotel drinking session. It was highly material that, moments before violently attacking the claimant, the manager had said “I f***ing make the decisions in this company it’s my business.”
Nevertheless, the law as it stands means that liability is not easily predictable. Lord Dyson observed that to search for precision in vicarious liability ‘is to undertake a quest for a chimaera’ (Morrison’s 1). This observation is perhaps the closest to certainty we can come.
Closing thought
Decisions handed down in January 2022 suggest that the doctrine is still being strictly applied (see Chell v Tarmac Cement And Lime Ltd [2022] EWCA Civ 7; [2022] 1 WLUK 32 (employer not liable for employee’s practical joke) and TVZ & Ors v Manchester City Football Club [2022] EWHC 7 (QB); [2022] 1 WLUK 11 (football club not liable for sexual abuse by coach)).
Although it may seem onerous to saddle an innocent employer with liability, the guiding principle behind vicarious liability was expressed by McLachlin J in Bazley v Curry [1999] 2 SCR 534 (Supreme Court of Canada) as follows:
‘[t]he employer puts in the community an enterprise that carries with it certain risks. When those risks materialize and cause injury… it is fair that the person or organization that creates the enterprise and hence the risk should bear the loss.’
The narrowing of the doctrine by the UK Supreme Court in its recent decisions appears to lose sight of this important policy. The test is now more difficult to satisfy, and it is those with the deepest pockets who have benefitted.
