Journal

Vicarious liability in the Supreme Court spotlight

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Birmingham Uni law student Olivia Gladstone looks at the recent high-profile tort cases involving Morrisons and Barclays

On 1 April 2020, two cases came to the Supreme Court, WM Morrisons Supermarkets plc (Appellant) v Various Claimants (Respondent) and Barclays Bank plc (Appellant) v Various Claimants (Respondents), both of which sought to deal with the long-standing principle of vicarious liability.

What is vicarious liability?

Vicarious liability is when one party is liable for the wrongdoing of another party. An example of a relationship that would evoke this doctrine is an employment relationship; where an employee is at fault for a tortious wrong, the employer would be liable to pay the damages.

Two elements need to be fulfilled before vicarious liability will be successfully shown:

1. There must be a ‘relationship’ between the two people which makes it proper to make one pay for the fault of the other.
2. There must be a sufficient connection between that relationship and the wrongdoing of the person who committed the tort.

Case overviews

Barclays Bank v Various Claimants sought to tackle the first element of this criterion; when does such a ‘relationship’ arise for one to be vicariously liable for the other?

Barclays hired a doctor’s services to perform compulsory medical examinations on new employees. Years later, it was discovered that he had allegedly sexually assaulted 126 patients during the course of these examinations. The Supreme Court held that as the doctor was not strictly ‘employed’ by Barclays but was instead an ‘independent contractor’, Barclays was not liable for the doctor’s alleged wrongdoing.

Morrisons Supermarket v Various Claimants tackles the second element of the criterion; when is there a ‘sufficient connection’?

In a personal vendetta against the company, a Morrisons auditor leaked thousands of employees’ personal information online. These employees later brought this case against Morrisons. The Supreme Court held that as the auditor acted outside of his job description and for ‘purely personal reasons’ which had no economic benefit for Morrisons, there was not a sufficient connection between the wrongdoing and the employment relationship.

Within one day, the Supreme Court sought to address the ambiguity of vicarious liability. However, we can question: how successful has the court been?

The purpose of vicarious liability (much like the whole of tort law) is to secure compensation and justice for victims via payment of damages. Have these new decisions tipped the balance in favour of large corporations or has it redressed the balance to make it fairer for all?

Consequences of the Supreme Court’s decision

The Morrisons v Various Claimants decision has not diminished vicarious liability but has instead added security and commercial protection to businesses. It is not right that any company should be penalised for any ‘personal vendetta’ against them and that Morrisons themselves had no intention of benefitting from. This decision is welcomed by many corporations who now do not need to bargain in markets where their employees are unjustly empowered against them in the eyes of law. Additionally, it should deter any workers who believe their wrongdoing will be bailed out by their employers. Workers now need to align their values with that of their companies in order to protect themselves from unwanted litigation.

However, the Barclays v Various Claimants decision appears more controversial. It is a long-standing principle that vicarious liability is only subject to employees and not that of independent contractors. However, due to the compulsory nature of these medical examinations and the sensitive subject area which this case invades, many feel uncomfortable that a relationship such as this is not ‘akin to employment’.

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In the judgment, Lady Hale discusses the Employment Rights Act (ERA) 1996, which defines ‘workers’ to encompass independent contractors. If this new definition was applied, then the doctor would fall within the definition of a ‘worker’ and thus within the realms of Barclay’s vicarious liability.

Despite this, the court held that as the ERA 1996 was made separately and distinctly from the common law doctrine of vicarious liability, “it would be going too far down the road of tidiness to align” the two (Hale in Barclays Bank plc v Various Claimants, paragraph 29).

Personally, I question whether this was the correct stance to take: even though vicarious liability is a well-known tort principle, the basis of our discussion is employment-related. To ignore an employment definition purely because it doesn’t ‘align’ neatly to this common law concept appears to leave a significant loophole for corporations when employing ‘workers’ in the future.

Additionally, this judgment leaves vulnerable victims, many of whom were underage at the time of the assault, without the justice they deserve. Hale briefly discussed a non-delegable duty of care (this is a duty not to take care themselves but ensure that care is taken appropriately by others) but breezed past it without much further comment or deliberation.

In Woodland v Essex County Council [2013], it was held that even where a school had hired an independent contractor, they were held to be liable under a non-delegable duty of care. More attention should have been paid to this key area of law to ensure such vulnerable and young victims are not left in this void of injustice emanating from this confused common law doctrine.

Where does this leave us?

Lord Philips in Various Claimants v Catholic Child Welfare Society [2012] stated that ‘the law of vicarious liability is on the move’, but we have good reason to question: is it moving in the right direction?

For corporations: there is much to be regarded by these decisions. The CEOs can sleep easy at night knowing any ‘personal vendetta’ by an employee will not cause them a hefty paycheck and they can also minimise any potential further liability by ensuring new workers come under the specification of an ‘independent contractor’.

Despite this, businesses should be aware that even though their vicarious liability may be reduced as a result of these decisions, a non-delegable duty of care may come to haunt them as a more fitting penalty.

For employees and individuals: from the outset, not much has changed. Employees are still protected from personal liability by their employers in the standard format they always have been. However, many should tread carefully to sustain this protected relationship by following their employment specification to the letter.
Additionally, victims may struggle to receive the compensation they are entitled to as ‘independent contractors’ become more attractive to businesses. As a result, it may appear that justice is a diminishing luxury.

Olivia Gladstone is a second year law student at the University of Birmingham.

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18 Comments

Boris

After the Supreme Court has been abolished by Suella Braverman’s democracy commission, it can stick to this kind of boring technical point, instead of straying into politics.

Frank Underwood

You’re mistaken to think that this isn’t a political field. Given that many vicarious liability cases concern historical sexual abuse (as Barclays), the cases are inherently political – how far should we cast the net of liability?

As for what you suggest, literally *any* JR could feasibily be regarded as political – ie involving politicians

Anonymous

All the more reasons to reform/abolish and recreate a new system from the current JR, because judges are not (presently) *specifically* vetted to see if they hold certain political views which are *objectively* viewed from outside the Legal Profession as being inherently extreme.

Lady Hale e.g. expressed her extrajudicial personal political views, but judicially, that as Lady Hale (and not as plain Brenda) that in her view as a Law Lord/UKSC judge that Chagos Islands do not belong to Britain in her various dissents over the years; that the Chagos Islanders should be restored (including financially) back to those islands (and to Mauritius), by all and any means necessary (but they should get to keep their British citizenship all the same for not only themselves but also their descendents, even after restoration)… that is a political view shared (really) only by Jeremy Corbyn, John Pilger, Paul Foot, Chris Williamson, Julian Assange… those of the political far-left (and Wikileaks expanded a great deal of energy trying to find all the relevant files specifically about the Chagos Islands, and how it got to become a RAF (USAF) base).

Lady Hale went out of her way in arguing in dissent as to why Assange should not be extradited to Sweden, in 2011/2.

Diego Garcia is an otherwise uninhabitable island in an actually uninhabited archipelago, in the middle of the Indian Ocean… it literally has no fresh surface drinking water. People who cannot appreciate this (or that the courts have no inherent power, in English common law, to order the ‘restitution’ of people last expelled between 1967 to 1973) is inherently politically extreme.

Anonymous

And inherently political cases should be dealt with by a quasi-judicial tribunal with Parliamentary (and political) oversight.

Lister was wrong

The author makes good points in this article. I think you are right about Non – Delegable duties may come to haunt businesses, certainly that area of the law has room for expansion after the decision in Woodland.

I would say on the Morrisons case that I doubt its value as a ‘deterrent’. I don’t think employees generally act with the law of vicarious liability in mind.

Overall, the Morrisons case does a lot to roll back the previous case of Mohamud v Wm Morrisons and rectify the problems that case created.
That being said, it does leave some amount of uncertainty in the law, as Lord Reed advocates for a case – by – case approach to decide which factors are relevant in establishing a ‘close connection’, so different factual circumstances have different relevant factors. This being said, this is certainly an improvement on Mohamud, which before this decision could be seen as an extreme liberalisation of the law.

ProudofU

This was a pleasingly wholesome and helpful comment for LC

Anonymous

Lord Reed’s approach is more (and eminently) sensible, because there is obviously no judicial, political or public support for a complete abolition of vicarious liability.

Anonymous

Vicarious liability has gone far too far in throwing risks of non-business costs onto businesses. Morrisons is a rare, rare exception on extreme facts. Too many field days for class action ambulance chasers. But when we sank to the depths of Fairchild and its progeny we knew the days of proper common law allocation of risks between business and state were long long gone. Vicarious liability has just be part of that degeneration.

Anonymous

Where the loss was not ‘identified’, unspecified and unquantified (if there were even ANY resulting personal financial loss at all) but rather merely a scene of anger that the various claimants’ personal privacy had been invaded… the case should have been thrown out even by the High Court.

Great read!

This was an insightful and well thought out article. Great read!

Perspective GDL Law Student

This is a very well written and interesting article. As a non-legal reader it was easy to understand and a good read. I look forward to reading some more articles by you in the future.

Anonymous

The two words might sound exactly the same to the ear, but it is actually spelt ‘pro-spec-tive’.

Anonymous

Having just read the whole article, I am not even personally convinced that vicarious liability should even exists AT ALL, except in exceptional or highly exceptional circumstances and scenarios.

Frank Underwood

Conventional rationale for vicarious liability is that (i) employers have deeper pockets, so could cover liability costs (whereas employees largely couldn’t, and would go bankrupt), and (ii) it makes sense, where the employers create the risk of torts being committed – e.g. builder A negligently drops bricks onto builder B: makes sense for A’s employer to compensate B, since employer creates the opportunity

Anonymous

In the U.S., maybe. Not here in England, the scope (definition) of the concept is much stricter, and the notion that an employer is somehow *automatically liable* for the wrongdoing of the employee hasn’t really been accepted by the English courts for at least the last 250 or so years.

Anonymous

“They can also minimise any potential further liability by ensuring new workers come under the specification of an ‘independent contractor” … which WILL be disregarded by the courts if they are satisfied that a relationship akin to that between a master and his servant or an employer and his employees, exists; and especially if they are satisfied that those arrangements were entered into with the sole and specific purpose of evading vicarious liability.

The ‘independent contractor’ was in the context that Barclays was (and is) a bank which did (and does) not provide medical services; one was (and is) regulated by the Bank of England, the other by the GMC; other than the contract with Barclays for which he presumably got to receive a commission for each examination, Dr Bates remained a complete a free agent.

Anna

Great summary of the case and the principles surrounding it .

Anonymous

But that bit of advice to employers about self-designating staff as ‘independent contractors’…

Well, still, not too bad, speaking as a 35-year-old with ‘severe Aspergers’ myself.

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