Vicarious liability: no longer 'on the move'? Implications for historical abuse cases

The UK Supreme Court has handed down two judgments today which are of particular importance for cases involving historical abuse. Together they both explore the two-stage test for vicarious liability. In recent years the courts have consistently expanded the vicarious liability test and the law had been described as "on the move". That movement appears to have slowed, if not stopped entirely.

While the decisions are relevant to historical abuse cases, they also have a much wider application. Clyde & Co's wider analysis of the decisions will be published in the coming week.

Vicarious liability

Vicarious liability involves a two-stage test:

1. Is the relevant relationship one of employment or "akin to employment"?

2. Was the tort sufficiently closely connected with that employment or quasi employment?

Barclays Bank is concerned with the first stage of the test whereas WM Morrison Supermarkets is focussed on the second.

Stage 1 – Barclays Bank

Barclays Bank plc v Various Claimants [2020] UKSC 13 concerns alleged sexual assaults perpetrated by Dr Gordon Bates on 126 claimants. Dr Bates was contracted by Barclays to carry out pre-employment medical appointments. These appointments took place in Dr Bates' own home.

At first instance, and in the Court of Appeal, it was held that Barclays were vicariously liable for Dr Bates' actions. There was a relevant relationship of employment or quasi-employment between Barclays and Dr Bates. Though Dr Bates was an independent contractor, the relationship was one "akin to" employment. The medical examination and report was conducted for the benefit of the bank. The bank had arranged the appointments and the claimants had no other reasons to be examined by Dr Bates. The bank exercised a level of control over Dr Bates.

The Supreme Court unanimously disagreed. Dr Bates was a "classic independent contractor".

Notwithstanding the recent extension of the first stage of the test (for example in Cox), the historical distinction between an employee and an independent contractor has not been eroded. The question is whether the individual is carrying on a business on his own account or whether he was in a relationship akin to employment. In this case, the Supreme Court held that it was clear that Dr Bates was in a business of his own. He had a number of clients and one of those clients was Barclays Bank.

The court also acknowledged that traditional employment relationships have been eroded with the development of the gig economy. However it was not persuaded that the law of vicarious liability should be aligned with employment law.

Stage 2 – WM Morrison Supermarkets

WM Morrison Supermarkets plc v Various Claimants [2020] UKSC 12 involves a disgruntled Morrisons' employee, Mr Skelton, who illegally uploaded personal details of over 100,000 other employees to a file-sharing website. The data was uploaded from Mr Skelton's personal computer in his own home and outside his working hours. Mr Skelton intended to cause harm to Morrisons rather than receiving any benefit himself.

Notwithstanding that it was held at first instance and in the Court of Appeal that this did not sever the link between the employment and the act. The tort fell within the field of activities assigned to the employee by Morrisons. The employee's motivations for the tortious act were not relevant to an assessment of vicarious liability. Morrisons were vicariously liable as there was an "unbroken chain" between his employment and the tortious act.

The Supreme Court unanimously disagreed. Mr Skelton was engaged on an independent venture.

The Supreme Court held that the lower courts had misunderstood the test it set out in Mohamud. The relationship of employment must be so closely connected with the acts the employee is authorised to do that it can be fairly and properly considered to be in the course of employment. The employee was not engaged in furthering Morrisons' business but was rather engaged in a personal vendetta.

"[T]he wrongful conduct must be so closely connected with acts the employee was authorised to do that, for the purposes of the liability of the employer to third parties, it may fairly and properly be regarded as done by the employee while acting in the ordinary course of his employment."

The court explained that the mere fact that Skelton’s employment gave him the opportunity to commit the wrongful act was not sufficient to warrant the imposition of vicarious liability. It must also be considered as fairly and properly done while acting in the ordinary course of his employment.

Impact on historic abuse cases

Barclays Bank at first instance and on appeal had extended the categories of relationships where the courts would find vicarious liability. The Supreme Court has reversed that. Where it is not clear whether the first stage of the test is satisfied then the criteria set out in Cox should still be applied.

In historic abuse cases, it has long been clear that this includes volunteers (see Catholic Child Welfare Society v Various Claimants [2012] UKSC 56) or those in non-traditional employment relationships. This will directly impact the range of those who may bring claims: would, for instance, a peripatetic music teacher providing lessons in school time be an independent contractor or akin to employment? The precise relationships will need careful analysis.

The impact of court's decision in WM Morrison Supermarkets is of potentially greater significance. It is trite to suggest that sexual abuse is ever done in the "ordinary course of employment" and the Supreme Court acknowledged this. The court reiterated that the test in historical abuse cases is more nuanced. The courts have emphasised the importance of criteria such as the employer’s conferral on the abuser of authority over the victims. Today's decision has not changed that. It does, however, highlight that mere provision of opportunity to abuse will not be enough.

That will require further examination of the connection between the abuse and the actions that the employee was authorised to do. It is inevitable that the courts will be asked to provide further guidance on this question in the context of cases of historical abuse.