Vicarious Liability

There have been a number of cases in recent years that illustrate the extent of employers' liability for the actions of their employees.

In a workplace context, an employer can be found liable for the acts or omissions of its employees, provided it can be shown that they took place in the course of their employment – i.e. where there is sufficient connection between the employee's position and the wrongful conduct to make it right for the employer to be held responsible.

The Supreme Court ruled in two cases that dealt with the vicarious liability of employers for incidents that took place at work.

Employee's Extreme Acts

In the first case (Mohamud v Wm Morrison Supermarkets plc) the Supreme Court upheld a damages claim brought by Ahmed Mohamud, an innocent customer who suffered serious head injuries in a savage, unprovoked attack in which he was repeatedly kicked and punched by Amjid Khan, a petrol kiosk attendant who was employed by Wm Morrison Supermarkets plc at a branch in Birmingham. The Court found that the supermarket giant was vicariously liable for Mr Khan's appalling behaviour.

Mr Mohamud had gone to the petrol station to check his tyre pressures but had also asked if he could use its facilities to print out some documents from a USB stick. His request was met by a torrent of racist abuse from Mr Khan, who ordered him to leave and never come back. After pursuing him onto the forecourt, he then kicked him repeatedly as he lay on the floor. Mr Mohamud suffered serious head injuries which resulted in him developing epilepsy.

Mr Mohamud sued Morrisons for damages, but had his claim dismissed by a County Court judge. Dismissing his appeal against that decision, the Court of Appeal had ruled that there was an insufficiently close connection between what Mr Khan was employed to do and his conduct in attacking Mr Mohamud for Morrisons to be held vicariously liable for his actions. Mr Khan had acted 'purely for reasons of his own, beyond the scope of his employment'. He had inexplicably attacked Mr Mohamud in direct defiance of instructions 'not to engage in any form of confrontation with a customer, even an angry one'.

Mr Mohamud subsequently died, but his family continued to pursue his case.

In allowing the appeal, the Supreme Court found that there is nothing wrong in the close connection test as such. However, in the present case, the Court had to consider two matters. Firstly, what was the nature of the employee's job and was there sufficient connection between his field of activities and his wrongful conduct for the employer to be held liable for his actions?

The Court noted that it was part of Mr Khan's job to attend to customers, to interact with them and to respond to their inquiries. His conduct was inexcusable and it could not be said that he had metaphorically taken off his uniform the moment he stepped out from behind the counter.

In ordering Mr Mohamud never to return to the petrol station, Mr Khan was purporting to act in his capacity as a Morrisons' employee. His motive in launching the attack was irrelevant and it did not matter whether his actions were driven by personal racism rather than a desire to benefit his employer's business.

The Court's decision opened the way for Mr Mohamud's estate and dependants to seek substantial compensation in respect of his lost earnings and the pain and suffering he endured before his death.

The Sort of Relationship Which May Give Rise to Vicarious Liability

The second case (Cox v Ministry of Justice) serves as a reminder that a relationship other than one of employment can give rise to vicarious liability.

Mrs Cox worked as a catering manager at HM Prison Swansea. She supervised prisoners who worked in the kitchen alongside the catering staff. In the course of taking supplies to the kitchen stores, one of the prisoners, Mr Inder, accidentally dropped a sack of rice on Mrs Cox's back, causing her injury.
She brought a claim against the Ministry of Justice (MoJ).

The County Court found that Mr Inder had been negligent but dismissed the claim on the basis that his relationship with the prison service was not akin to that between an employee and an employer. The Court of Appeal reversed that decision, however.

The Supreme Court dismissed the MoJ's appeal, finding that Mrs Cox was injured as a result of Mr Inder's negligence in carrying out activities assigned to him. The relationship was such that the prison service could be held vicariously liable to her.

In reaching its decision, the Court gave guidance on the sort of relationship which may give rise to vicarious liability in cases where there is no contract of employment:

• The harm caused must have been wrongfully committed by an individual who was carrying out activities that are an integral part of the defendant's business and for its benefit, not that of an independent business of the individual's own or of a third party; and
• The commission of the wrongful act was a risk created by the defendant by assigning those activities to the individual.

In this case, the inmates who were working in the prison kitchen were integrated into the operation of the prison. The tasks assigned to them formed an integral part of the activities of the prison in furtherance of its aims, in particular the provision of meals for prisoners. The prison service placed such prisoners in a position where there was a risk that they might be negligent in carrying out the assigned duties whilst working under the direction of prison staff.

Employers are advised to be vigilant and to act swiftly to deal with any unwanted conduct on the part of employees towards customers or other members of staff. Staff handbooks and policies should be clear that such behavior will not be tolerated. Workers who are not under contract should be made aware of health and safety procedures and other workplace policies and procedures to which they are expected to adhere in carrying out their function.

Employer Escapes Vicarious Liability for Employee's Negligence

A third case on this topic (Fletcher v Chancery Supplies Limited) illustrates that an employer will only be ordered to pay compensation for the negligent acts of their employees if they are 'working' at the relevant time. In determining such cases, the court has to examine the nature of the employee's job, which has to be considered broadly, and whether there is sufficient connection between the employee's position and the wrongful conduct to make it right for the employer to be held liable for the employee's action.

The Court of Appeal found that a salesman who worked for a plumbing business was not acting in the course of his employment when he walked into the path of a cycling policeman.

The policeman suffered serious knee injuries in a fall from his motorised bicycle after the salesman walked across the road through stationary traffic without looking. There was no dispute that the latter was negligent.

When questioned by police after the accident, the salesman gave his nearby workplace as his address. He had been walking towards the shop where he was employed and was wearing his work uniform. In those circumstances, a judge found that he had been acting in the course of his employment and his employer was therefore vicariously liable for the accident.

However, in overturning that ruling and exonerating the employer, the Court noted that the collision occurred 45 minutes after the end of the salesman's shift and that there was no direct evidence that he was still working. It was hardly unusual for him still to be wearing his uniform so soon after his working day had ended and the fact that he gave his employment address to the police was not relevant.

In the Court's view, the factors taken into account by the judge in the lower court did not provide a legitimate basis for concluding that the salesman was still at work at the time of the accident. The Court was therefore bound to find that his action in crossing the road was not sufficiently connected with his job to hold his employer liable for its consequences.

Vicarious Liability Can Extend to Independent Contractors

Whilst companies generally bear legal liability for misdeeds committed by their employees in the context of their work, does the same apply to self-employed contractors? That was the issue before the Court of Appeal in a group action brought by bank workers who claimed to have been sexually abused by a doctor in the course of pre-employment health checks (Barclays Bank plc v Various Claimants).

Under an agreement with the bank, the doctor had carried out medical assessments and examinations on prospective employees, the majority of them young women, between 1968 and 1984. He has since died, but 126 of those whom he had examined launched proceedings against the bank on the basis that he had subjected them to sexual assaults.

The bank – which neither admitted nor denied that the sexual assaults had occurred –pointed out that the doctor was an independent contractor who had carried out the examinations at his own surgery. In ruling that the bank bore indirect – vicarious – responsibility for his actions, however, the judge in the lower court noted that his alleged victims had been required to undergo the examinations prior to taking up their posts.

In the judge's view, although the bank was an innocent party, it had created the relevant risk when it referred its prospective employees to the doctor, and the alleged sexual assaults were inextricably interwoven with the work the doctor had done for the bank's benefit.

In challenging that ruling, the bank reasserted its argument that the doctor was neither its employee nor was their relationship akin to employment. He was self-employed and had been engaged as an independent contractor. It was submitted that it was preferable to have a 'bright line' test – i.e. a clearly defined rule that the imposition of vicarious liability should not be extended beyond relationships that are, or are close to, employment.

In ruling on the matter, the Court of Appeal noted that use of independent contractors is increasingly prevalent in the modern economy. They often perform operations intrinsic to business enterprises over long periods and are subject to precise obligations and high levels of control. Depending on the particular facts of a case, vicarious liability can thus be extended to such a relationship.

In the particular case, the doctor was deceased and his estate had been distributed. The bank was thus clearly in a better position to satisfy the women's claims if they succeeded. He had examined the women on the bank's behalf and, although they might have had the benefit of being alerted to health problems, the principal benefit was clearly to the bank as their prospective employer.

In dismissing the appeal, the Court noted that the examinations were part of the business activity of the bank and that the risk of wrongdoing had arisen from the bank's engagement of the doctor to perform them. He was paid a fixed fee for each examination and the level of the bank's control over him was sufficiently high to make the bank vicariously liable for his actions.

The Court's ruling has opened the way for the women to pursue their damages claims to trial.

Morrisons Vicariously Liable for Rogue Employee's Data Leak

In a landmark decision in the first class action in the UK arising from a data leak (Various Claimants v WM Morrisons Supermarket plc), the Court of Appeal has ruled that Morrisons was indirectly liable for the criminal actions of a rogue employee in breach of the Data Protection Act 1998 (DPA).

The data in question was leaked by an IT specialist who worked for Morrisons as a senior internal auditor. He bore a grudge against the supermarket chain after an unrelated incident that had resulted in disciplinary action. He had access to the company's personnel files as employees' payroll data was needed for an audit. He later copied details – including names, addresses, dates of birth, telephone numbers, bank details and salaries – of almost 100,000 of his fellow workers and placed them on a file-sharing website.

Morrisons learned of the leak after a CD containing a copy of the data was sent to three newspapers. Concerned that the leak might expose its staff to fraudulent 'phishing' or identity theft, the company took swift and effective steps to remove the data from the Internet. The perpetrator was subsequently identified and convicted of offences under the Computer Misuse Act 1990 and the DPA. He was given an eight-year prison sentence.

More than 5,500 of the affected employees lodged damages claims against Morrisons, alleging that it was both directly and indirectly liable for the IT specialist's actions. The company was alleged to have breached its strict duties under the DPA to protect its employees' personal data. Other claims of misuse of personal data and breach of confidence were also pursued.

The High Court found that the chain had not directly misused, or authorised or carelessly permitted the misuse of, any of the relevant data. In its opinion, however, on the facts of the case the IT specialist's nefarious actions were sufficiently closely connected to his employment as to render Morrisons vicariously liable.

In challenging that decision, Morrisons argued that it, rather than its staff, was the IT specialist's intended victim and that the judge's ruling had enabled him to achieve his objective of harming its interests. The finding of vicarious liability would place an enormous burden on the chain and other employers who found themselves in a similar situation.

In dismissing the appeal, however, the Court of Appeal found that the common law remedy of vicarious liability is neither expressly nor impliedly excluded by the terms of the DPA. It noted that, if Morrisons' arguments were correct, a hypothetical employee who had money stolen from his bank account as a result of a data leak by a fellow worker would have no remedy, other than against the wrongdoer personally. Noting the large number and huge scale of recent corporate data breaches, the Court observed that it is incumbent on those exposed to potentially catastrophic losses to take out appropriate insurance.

The Court's ruling opened the way for the affected employees to seek compensation from the chain in respect of any losses suffered. However, Morrisons has announced its intention to appeal to the Supreme Court.

This case serves as a reminder to employers to ensure that access to personal data of this kind is restricted to only those personnel necessary and the data is deleted when it is no longer needed. In addition, in order to comply with the 'accountability principle' introduced by the General Data Protection Regulation, data controllers are required to keep records to demonstrate how they comply with their data protection obligations.

Vicarious Liability – Impromptu Post Christmas Party Gathering

An employer's vicarious liability for the actions of their staff can include those that occur during an office function, but what is the position when one employee suffers injury at the hands of another at an impromptu get-together some hours after a planned works event has finished? The High Court had found that a recruitment company was not liable for serious injuries inflicted by one member of staff on another in such circumstances, but that decision has now been overturned by the Court of Appeal (Bellman v Northampton Recruitment Limited).

Clive Bellman worked as the sales manager for Northampton Recruitment Limited. He sought £1 million in damages from his employer after he suffered a fractured skull and very severe traumatic brain injury as a result of being punched in the face by John Major, the managing director of the company. The incident took place after the work Christmas party at a golf club had passed without event and staff members had adjourned to the bar of the nearby Hilton hotel. This was not a pre-planned extension to the party, although Mr Major had arranged taxis to convey members of staff to the hotel and the drinks consumed were, for the most part, paid for by the company.

For some time the conversation was on social and sporting topics, but later turned to work matters. At around 3:00am, Mr Bellman questioned one of Mr Major's management decisions. Mr Major was annoyed and proceeded to lecture those present on how he owned the company and would do what he wanted. He paid their wages and management decisions were his to take. When Mr Bellman continued to challenge him in a non-aggressive manner, Mr Major lost his temper and twice punched him hard in the face. Mr Bellman fell, hitting his head on the marble floor. The injuries he sustained were so serious that he is unlikely to return to any paid employment and lacks the capacity to manage his own affairs.

Lawyers acting for Mr Bellman claimed that Northampton Recruitment was vicariously liable for Mr Major's actions and the consequences of the attack because he was acting 'in the course or scope of his employment'. The High Court had disagreed, however. In its view, what took place at the hotel was a drunken discussion that resulted from a personal choice to consume more alcohol long after the official works event had ended. The fact that the dispute was about work did not provide a sufficient connection to support a finding of vicarious liability against the company that employed the two men.

In upholding Mr Bellman's challenge to that decision, however, the Court of Appeal found that Mr Major was at the time purporting to exercise his authority over his subordinates and was not merely one of a group of drunken revellers whose conversation had turned to work. The attack arose out of a misuse of the position that had been entrusted to him by the company. The latter's vicarious liability had therefore been established.

The Court went on to emphasise that this case is 'emphatically not authority for the proposition that employers became insurers for violent or other tortious acts by their employees'. Liability arose in this case because of the way in which Mr Major 'chose to exert his authority, indeed his dominance as the only real decision-maker, in the company' and that 'this combination of circumstances will arise very rarely'.