WM Morrison Supermarket plc v Various Claimants [2020] UKSC 12
Barclays Bank plc v Various Claimants [2020] UKSC 13
This article originally appeared in Issue 5 (May 2020).
These parallel judgments, handed down on the same day by the Supreme Court, clarify the two stage approach to determining whether an employer will be held liable for the wrongdoing of an employee. The first stage involves consideration of whether the wrongdoer really is an employee or akin to an employee. If so, the second stage requires consideration of what the employee did wrong – was it closely connected to their employment or were they ‘on a frolic of their own’? The judgments require a reappraisal of the observation of Lord Phillips in Various Claimants v Catholic Child Welfare Society [2012] UKSC 56 (the “Christian Brothers” case), that “the law of vicarious liability is on the move”.
Stage 1: Employment or ‘akin to employment’
Barclays Bank is concerned with the first stage. Barclays for many years paid Dr Bates, now deceased, to carry out medical assessments of people they wished to employ, many of them young women aged 16 or under. He carried out the assessments in his own home, and is alleged to have sexually assaulted many of those he examined. The victims could not sue his estate which had been dispersed, but at first instance and on appeal it was held that Barclays could be sued on the basis of vicarious liability for any proven assaults.
The Supreme Court unanimously allowed Barclays’ appeal. It was accepted that the circumstances in which one person can be made vicariously liable for the torts of another had expanded from the historic position, where it was limited only to employer/employee relationships. However, the requirement remained for a relationship that was at least ‘akin to employment’ as held in E v English Province of Our Lady of Charity [2012] EWCA Civ 938.
In the view of the Supreme Court, Dr Bates was not “anything close to an employee” of Barclays. It was noted that he had a number of paid positions that included part-time employment for the NHS as well as writing a newspaper column. Accordingly, he was a true independent contractor and vicarious liability did not arise: “He was in business on his own account as a medical practitioner with a portfolio of patients and clients. One of those clients was the bank.” [28]
So where did the Court of Appeal and first instance judge go wrong?
Lady Hale noted that the recent expansion in the law of vicarious liability had begun with the House of Lords’ decision in Lister v Hesley Hall Ltd [2001] UKHL 22, where the owners of a children’s home were held to be liable for sexual abuse perpetrated by their employee. That case was concerned with stage two – i.e. whether the employer, in the case of an acknowledged employee, should be held liable for the employee’s particularly egregious deliberate wrongdoing. But the sorts of policy considerations that had influenced that judgment then found their way into the case law concerning stage one, i.e. whether the relationship is akin to employment.
This is evident in the Christian Brothers case, which involved abuse of children at a school by teachers who were employees of the school but also members of an organisation called the Institute of Christian Brothers. There was no dispute that the owners of the school were vicariously liable, as employers, but they argued that the Institute should share liability. The court identified a number of policy reasons why an employer should usually be vicariously liable. These were that (i) the employer is more likely to have the means to compensate the victim; (ii) the tort will have been committed as a result of activity being taken by the employee on behalf of the employer; (iii) the employee’s activity is likely to be part of the business activity of the employer; (iv) the employer by employing the employee to carry on the activity will have created the risk of the tort being committed; and (v) the employee will have been to some degree under the control of the employer. Turning to whether the Institute could also be held to be vicariously liable, the court held that it could. The five policy factors set out above as regards an employer/employee relationship were considered. But Lady Hale considered that the determination of whether the relationship was akin to employment was not restricted to policy reasons but involved analysis of the details of the particular relationship and its closeness to employment. The conclusion was that, notwithstanding the fact that the teachers were not paid or under contract, all the essential elements of an employment relationship were present, in particular that the teaching activity was undertaken in the furtherance of the objective of the Institution and was dictated by its rules. [15]-[16].
Lady Hale acknowledged that the five policy factors set out in Christian Brothers played a clear role in the reasons for extending vicarious liability to non-employer/employee relationships at stage 1 in Cox v Ministry of Justice [2016] UKSC 10. The MOJ was held to be vicariously liable for the negligence of prisoners working in the catering department of a prison, the absence of an employment contract notwithstanding. However, she considered that there was nothing in this judgment to cast doubt upon the “classic distinction between work done for an employer as part of the business of that employer and work done by an independent contractor as part of the business of that contractor.” [22]
Likewise, she acknowledged that the Christian Brothers policy factors were considered at stage 1 in the Supreme Court’s “difficult” case of Armes v Nottinghamshire County Council [2017] UKSC. Here, it was held that a County Council could be vicariously liable for abuse carried out by foster parents and particular emphasis was placed upon the ‘deep pockets’ factor. However, Lady Hale noted that the judgment also laid emphasis upon the fact that the foster parents could not be regarded as carrying on an independent business of their own.
Accordingly, it will be seen that the Supreme Court in Barclays was at pains to emphasise a bright line between relationships that are akin to employment and those in which work is done by an independent contractor. In the latter case, vicarious liability will not arise. The court seems, implicitly, to accept that this was not entirely clear from three of its own recent judgments in this area, yet it goes on to cite in support the subsequent decisions of the Court of Appeal in Kafagi v JBW Group Ltd [2018] EWCA Civ 1157 and of the Singapore Court of Appeal in Ng Huat Seng v Mohammed [2017] SGCA 58. [25]-[26].
Ultimately, the court concluded that it is only in “doubtful” cases that the five policy factors identified by Lord Philips in the Christian Brothers case may be helpful at stage 1. But in a “clear” case, such as that of Dr Bates, that will not be necessary [27].
Stage 2: A close connection to employment
The Morrisons case is concerned with stage 2. A disaffected employee had waged a criminal campaign of vengeance against his employer, in which he sent workforce payroll data to the newspapers, leading to group litigation by those affected. The courts below held that Morrisons was vicariously liable for the employee’s actions.
Joel v Morison (1834) 6 C & P 501, 503 enshrined the basic principle that: “The master is only liable where the servant is acting in the course of his employment…but if he was going on a frolic of his own, without being at all on his master’s business, the master will not be liable”. A employer is liable if the employee is engaged in furthering the employer’s business “however misguidedly”: see Dubai Aluminium v Salaam [2002] UKHL 48.
The cases turn on their facts. In Warren v Henlys Ltd [1948] 2 All ER 935 a customer was wrongly accused by a petrol attendant of trying to make off without payment. The customer flagged down a police car and complained. The police officer said it was not a police matter. The customer said he would report the attendant to his employer. As the police officer was about to leave the attendant punched the customer in the face, knocking him to the ground. The court held that the assault was an act of “personal vengeance” and had no connection whatever with the discharge of his duty for his employers. In Morrisons, Lord Reed considered that reasoning to be “unconvincing” given that the attendant’s function was to deal with customers, the assault happened at his workplace, whilst at work and the sequence of events commenced with the attendant acting for the benefit of his employer. The facts were felt to be “appreciably stronger” than in the present case [43]
The court also considered its earlier decision in Mohamed v WM Morrison Supermarkets plc [2016] UKSC 11, coincidentally involving both the same supermarket chain and an assault by a petrol station attendant. A motorist asked if he could print some documents and was refused, ordered to leave and subjected to a racist tirade by the attendant, who then followed him to his car, opened his door and told him never to come back. When the motorist asked him to close the door the attendant assaulted him. In this instance the Supreme Court held that applying the test of “close connection” to employment, as set out In Lister and Dubai, the attendant’s acts did fall within the scope of his employment. His job was to attend to the customers and that is what the attendant was doing in the first instance, albeit in a foul mouthed way. The assault that took place was part of a seamless episode in which the attendant gave an order to the victim to stay away from his employer’s premises, “reinforced by violence”. Accordingly, whilst a gross abuse of his position, it was in connection with the business. [27]
Lord Reed noted that the decision in Mohamed had been misunderstood by the courts below as marking a major departure from the previous case law. The comments concerning “a seamless episode” concerned the capacity in which the employee was acting rather than simply a temporal or causal connection between the events. Likewise a statement that “motive was irrelevant” was taken out of context – it simply meant that the reason why the attendant had become violent could not make a material difference, it having been concluded already that he was going about his employer’s business when he did so. [28]-[30]
In the instant case, the deliberate disclosure of the payroll data was clearly not part of the disaffected employee’s authorised functions. Lord Reed considered the presence of the Christian Brothers policy factors to be irrelevant, apparently on the basis that they were concerned with the determination at stage 1. The close temporal connection was considered insufficient to satisfy the close connection test. However, the fact that the employee was not acting on his employer’s business interests but contrary to them, for personal reasons, was highly relevant. In these circumstances his conduct was not so closely connected with acts which he was authorised to do that it could fairly and properly be regarded as done whilst acting in the ordinary course of employment.[47]
Is the law on vicarious liability still on the move?
The facts of these cases were highly unusual, and the court considered that they fell squarely on one side of the line. However, it seems likely that the expansion of the law, that commenced with Lister and continued in the trilogy of Supreme Court cases discussed in Barclays, will continue to be argued for in more nuanced areas such as in the context of private healthcare provision. The court will need to look at the precise relationship in each case. Factors such as the location of the tortious conduct, the extent to which the tortfeasor’s activities are part of the alleged employer’s business activity and a degree of control can still be considered at stage 1. Moreover, a separate concern for employers exists: as noted in Barclays [19], even in situations ultimately viewed as involving independent contractors, a non-delegable duty of care may still arise: see Woodland v Swimming Teachers Association [2013] UKSC 66. It is also to be noted that in Morrisons the court rejected the argument that an employer can never be vicariously liable for a breach of the Data Protection Act 1988. Therefore, in future an employer could be held to be vicariously liable for a breach of the legislation, as well as of obligations arising at common law or in equity, caused by an employee who is a data controller and commits the breach in the course of his employment.
Lizanne Gumbel QC and Robert Kellar QC acted for the Claimants in Barclays Bank. They did not contribute to this article.
