SKX v Manchester City Council  EWHC 782 (QB)
In The Catholic Child Welfare Society and others v Various Claimants  UKSC 56, Lord Phillips set out that two stages are to be addressed in establishing whether a party may be vicariously liable for the torts of another:
- Is the relationship between the defendant and tortfeasor capable of giving rise to vicarious liability?
- Is there a sufficiently close connection between that relationship and the act or omission of the tortfeasor?
As is well known, in recent years there have been a series of appellate cases on the subject of vicarious liability in the context of abuse and assaults.
In SKX, Cavanagh J considered a claim against a Defendant local authority, which turned on the application of the first question, in circumstances where the tortfeasor was not an employee of the Defendant, but of a wholly different company.
SKX was a case arising out of the Bryn Alyn Community (“BAC”), a privately-owned group of children’s homes with a long history of abuse-related litigation and was the subject of a major public inquiry. In 1989, the Claimant had been placed at Bryn Allen Hall by the Defendant, and was subjected to serious sexual abuse by the Chief Executive of the BAC, John Allen.
The Claimant was one of several who had previously brought claims under a Group Litigation Order, a number of years ago, against BAC’s insurer. In that case, the Court of Appeal had held that the insurer’s exclusion clause excluded recovery in respect of abuse committed by the company’s managers, including John Allen (see KR and others Royal & Sun Alliance Plc  EWCA Civ 1454).
Accordingly, SKX’s claim against Manchester City Council was on the basis that it was vicariously liable for the assaults committed by John Allen. No fault was alleged as against the council. An unsuccessful claim that the council owed a non-delegable duty to the Claimant was also pursued, but is outside the scope of this note.
The Claimant’s case relied by analogy on Armes v Nottinghamshire County Council  UKSC 60, in which the Supreme Court held that a local authority was vicariously liable for acts of abuse carried out by a foster parent, with whom the defendant had placed the claimant in that case. The argument was that the Defendant local authority was vicariously liable for the acts of John Allen, even though he was an employee of the company which ran the BAC.
The court noted that, as is well known, vicarious liability can arise in the context of relationships which are “not employment but which are sufficiently akin to employment to make it just to impose such liability.” (see Barclays Bank Plc v Various Claimants  UKSC 13at ).
However, the court found that the relationship between the company and the Defendant local authority was “a classic client/independent contractor relationship” (). The company was an independent business, looking after children from many local authorities of which the Defendant was just one. The local authority was “just another client”. Accordingly, John Allen was part of the company’s independent business, and not that of the Defendant.
By contrast, in Armes the foster parents were found not to be regarded as carrying on business of their own. They had been recruited by individuals (in the same way as the local authority recruited employees), were paid allowances, and were provided with equipment and in-service training (). In the circumstances, the foster parents were in a relationship akin to employment with the defendant.
Importantly, and following the guidance of Lady Hale in Barclays Bank (see  of that judgment), it was therefore not necessary to consider Lord Phillip’s ‘five incidents’ as set out in the Christian Brothers case, which set out the principled basis for the imposition of vicarious liability.
The judgment in SKX is of note for two reasons.
The first is that is a reminder of the central importance of establishing the type of relationship, i.e. one akin to employment, assessing the broader (and often more difficult) question of the ‘close connection’ between that relationship and the tortious acts.
The second, and related, point of note is that the questions are to be taken in turn. The ‘five incidents’ did not fall for consideration: if the Claimant falls at the first hurdle, then vicarious liability will not be imposed, and the policy criteria underlying the imposition of vicarious liability will not come under the court’s scrutiny.