Vicarious Liability: Supreme Court gives Judgment in Barclays and Morrisons, by Tom Bourne-Arton

The Supreme Court has given Judgment in the twinned cases of:

a) Barclays Bank plc v Various Claimants [2020] UKSC 13, and

b) WM Morrisons Supermarkets plc v Various Claimants [2020] UKSC 12

These cases deal with vicarious liability. For vicarious liability to attach, two considerations have to be met:

First, what sort of relationship has to exist between an individual and a defendant before the defendant can be made vicariously liable in tort for the conduct of that individual?

Secondly, in what manner does the conduct of that individual have to be related to that relationship, in order for vicarious liability to be imposed on the defendant?

The first consideration was the subject of Barclays. The second consideration was the subject of Morrisons.

• In Barclays Lady Hale, giving the unanimously agreed judgment, held that Barclays Bank was not liable vicariously for the actions of an independent contractor – a doctor who was alleged to have sexually assaulted the Claimants when undertaking medical examinations of potential employees of Barclays. In doing so Lady Hale overturned the first instance decision and the decision of the Court of Appeal.

• Lady Hale held that there was nothing in the trilogy of Supreme Court cases, namely Various Claimants v Catholic Child Welfare Society [2012] UKSC 56, Cox v Ministry of Justice [2016] UKSC 10 and Armes v Nottinghamshire County Council [2017] UKSC 60, to suggest that the classic distinction between employment and relationships akin or analogous to employment, on the one hand, and the relationship with an independent contractor, on the other hand, has been eroded. She went on to state:

“27. The question therefore, is, as it has always been, whether the tortfeasor is carrying on business on his own account or whether he is in a relationship akin to employment with the defendant. In the doubtful cases, the five “incidents” identified by Lord Phillips may be helpful in identifying a relationship which is sufficiently analogous to employment to make it fair, just and reasonable to impose vicarious liability. Although they were enunciated in the context of non-commercial enterprises, they may be relevant in deciding whether workers who may be technically self-employed or agency workers are effectively part and parcel of the employer’s business. But the key, as it was in the Christian Brothers, Cox, and Armes, will usually lie in understanding the details of the relationship. Where it is clear that the tortfeasor is carrying on his own independent business it is not necessary to consider the five incidents.”

• By “the five incidents” Lady Hale was of course referring Lord Phillips’ judgment in Christian Brothers which has been followed since in cases such as Cox and Armes in determining if an akin to employment relationship existed. As Lady Hale held at para 15 of Barclays Lord Phillips listed “a number of policy reasons” usually making it fair, just and reasonable to impose vicarious liability upon an employer for the torts committed by an employee in the course of his employment, which are as follows:

“(i) the employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liability;

(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 committed by the employee;

(v) the employee will, to a greater or lesser degree, have been under the control of the employer.”

• The point being made in Barclays is that those five incidents are policy reasons for identifying an “akin to employment” relationship and not the test to apply where the tortfeasor is an independent contractor.

• Therefore, when faced with a case where vicarious liability may be imposed the first question is to consider if the tortfeasor is an independent contractor or not. If she/he is then vicarious liability will not attach. If not, or if there is doubt, then the five incidents set out in Christian Brothers should be considered in determining if there is an “akin to employment” relationship.

• In the twin case of Morrisons Lord Reed gave the unanimously agreed judgment. Lord Reed explained that Lord Toulson, in the previous Supreme Court decision of Muhamud v WM Morrison Supermarkets Plc [2016] UKSC, had not set out new legal principles for when vicarious liability should attach to actions of an employee (or person with an “akin to employment” relationship). Lord Reed held that the question to ask when considering the second consideration of vicarious liability is to apply the general test laid down by Lord Nicholls in para 23 of Dubai Aluminium [2003] 2 AC 366. This was as follows:

 “23. If, then, authority is not the touchstone, what is?… Perhaps the best general answer is that the wrongful conduct must be so closely connected with acts the partner or employee was authorised to do that, for the purpose of the liability of the firm or the employer to third parties, the wrongful conduct may fairly and properly be regarded as done by the partner while acting in the ordinary course of the firm’s business or the employee’s employment. Lord Millet said as much in Lister v Hesley Hall Ltd…”

Lord Reed, having quoted the passage above, held as follows:

“24. The general principle set out by Lord Nicholls in Dubai Aluminium, like many other principles of the law of tort, has to be applied with regard to the circumstances of the case before the court and the assistance provided by previous court decisions. The words “fairly and properly” are not, therefore, intended as an invitation to judges to decide cases according to their personal sense of justice, but require them to consider how the guidance derived from decided cases furnishes a solution to the case before the court. Judges should therefore identify from the decided cases the factors or principles which point towards or away from vicarious liability in the case before the court, and which explain why it should or should not be imposed. Following that approach, cases can be decided on a basis which is principled and consistent.”

In summary, when the court is considering the second consideration – if the actions of the employee are such that vicarious liability should be imposed – the starting point is the general test laid down in Dubai Aluminium and then to see how the index claim compares to other decided cases, which may assist the court in deciding which side of the line the index claim stands.

In conclusion, the Supreme Court in these two twinned cases have not set down new principles to follow in cases involving vicarious liability, instead they have clarified the approach to take when considering either of the two vicarious liability considerations.

Tom Bourne-Arton is a member of the Farrar’s Building Personal Injury Team.  Please direct any instructions or queries to the Clerking Team.

---

• Share article:

---