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Seeing the wood for the trees – more clarity on the ambit of vicarious liability

When will a party be liable for the torts of an independent contractor from whom they obtained a service? That was the issue which the Supreme Court was called upon to address in the case of Barclays Bank plc v Various Claimants. The Court delivered its judgment on the same day as it handed down judgment in the case of WM Morrison Supermarkets plc V Various Claimants;[1] a case which addressed the ambit of vicarious liability for the wrongful acts of employees (click here for our briefing on the judgment).

In Barclays the Supreme Court determined that the bank would not be vicariously liable for alleged sexual assaults committed by Dr B during the course of pre-employment health assessments which he conducted for prospective Barclays’ employees. Dr B provided his services from his house making them available to all. He had a portfolio of clients. There was no arrangement for exclusivity with Barclays and Dr B was free to accept or reject referrals for assessment. He was paid a fee per report and there was no retainer. Dr B was in business on his own account. He was a classic example of an independent contractor.

The judgment reminds the reader of the “trite law that the employer of an independent contractor is, in general, not liable for the negligence or other torts committed by the contractor in the course of the execution of the work.”[2]

When combined with the factual conclusion that Dr B was an independent contractor, the inevitable conclusion was that Barclays would not be vicariously liable for any wrongdoing by Dr B.

Nonetheless, the decision does not preclude the possibility a principal may be vicariously liable for the torts of a contractor where the factual circumstances indicate that the contractor’s independence is constrained such as to make the nature of the relationship closer in reality to that of employer and employee. In doubtful cases there are recognised factors which may assist in determining the issue, as enumerated by Lord Phillips in an earlier case[3] and 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.”

In any given case the key lies in understanding the details of the relationship. As Lady Hale noted “Where it is clear that the tortfeasor is carrying on his own independent business it is not necessary to consider the five [factors enumerated by Lord Philips].”

It is noteworthy that the Court rejected the invitation to align the test for vicarious liability with concepts from employment law involving distinctions between employees and workers noting:

“…it would be going too far down the road of tidiness for this court to align the common law concept of vicarious liability, developed for one set of reasons, with the statutory concept of “worker”, developed for a quite difference set of reasons.”

Conclusions

The decisions in this case and the Morrisons case identified the relevant law which, the Supreme Court suggests, was clear all along but had simply been misunderstood, by practitioners and judges alike. The road markings have not been redrawn, merely given a fresh coat of paint. The clarity which the Supreme Court has identified will no doubt be welcomed by practitioners and institutions alike not least because it narrows the potential range of circumstances in which vicarious liability might arise.

[1] WM Morrison Supermarkets plc v Various Claimants [2020] UKSC 12

[2] D&F Estates Ltd v Church Comrs [1989] AC 177

[3] Various Claimants v Catholic Child Welfare Society [2012] UKSC 56


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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