The Supreme Court on vicarious liability – where next for sexual abuse claims?
In April, the Supreme Court handed down two important judgments concerning vicarious liability against Barclays Bank and WM Morrison Supermarkets. Joshua Cainer looks at the impact on sexual abuse claims.
On 1 April 2020 the Supreme Court handed down two important judgments concerning vicarious liability: Barclays Bank plc v Various Claimants  UKSC 13 and WM Morrison Supermarkets plc v Various Claimants  UKSC 12. Whilst the impact of these cases will be felt across all claims relying upon vicarious liability, this article considers the potential effects on the particular area of sexual abuse claims.
It has been well-established since Various Claimants v Catholic Child Welfare Society  UKSC 56 (at para ) that vicarious liability requires satisfaction of a two-limbed test: (1) there must be a qualifying relationship between the primary wrongdoer and the defendant which makes it proper for the law to make the defendant pay for the fault of the primary wrongdoer; and (2) there must be a sufficient connection between that relationship and the primary wrongdoer’s conduct. The Supreme Court’s judgments considered both limbs of this test.
Barclays Bank plc v Various Claimants – qualifying relationships
In Barclays Bank claims were brought by 126 claimants in respect of sexual assaults allegedly committed between 1968 and 1984 by the late Dr Gordon Bates. As part of Barclays’ recruitment processes, prospective employees with job offers were required to submit themselves for a medical examination. These examinations were carried out by Dr Bates, during which the claimants alleged that he had sexually assaulted them.
The question for the Supreme Court was whether Dr Bates’ relationship with Barclays satisfied the first limb of the vicarious liability test. The Supreme Court held (at ) that the test was not satisfied – he was an independent contractor “in business on his own account as a medical practitioner with a portfolio of patients and clients. One of those clients was the Bank”. In reaching that conclusion, Lady Hale made four key points.
First, Lady Hale summarised (at ) the correct approach as follows: “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”. Only the latter kind of relationship would satisfy the first limb of the test. Lady Hale considered (at ) that there was nothing in the most recent trilogy of Supreme Court cases on vicarious liability (Catholic Child Welfare Society, Cox v Ministry of Justice  UKSC 10 and Armes v Nottinghamshire County Council  UKSC 60) to suggest any erosion of this classic distinction between employment and relationships akin or analogous to employment, as against the relationship with an independent contractor.
Secondly, Lady Hale referred (at ) to the five “incidents” or factors identified by Lord Phillips in Catholic Child Welfare Society at para  which he considered would, if satisfied, usually make it fair, just and reasonable to impose vicarious liability on the defendant. Lady Hale considered (at ) that, in “doubtful cases”, these incidents “may be helpful in identifying a relationship which is sufficiently analogous to employment to make it fair, just and reasonable to impose vicarious liability”. In particular, despite the non-commercial context of Catholic Child Welfare Society, these incidents “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”.
Thirdly, however, Lady Hale considered (at ) that these five incidents are not the only criteria by which to judge the first limb of the test and further held (at ) that it isn’t necessary for courts to consider them in cases where “it is clear that the tortfeasor is carrying on his own independent business”. The key “will usually lie in understanding the details of the relationship”.
Fourthly, Lady Hale considered briefly (at ) whether to align the first limb of the vicarious liability test with the statutory concept of the ‘worker’ in employment law, under s.230(3) of the Employment Rights Act 1996. However, she declined to do so, given that the statutory concept of “worker” was “developed for a quite different set of reasons”.
WM Morrison Supermarkets plc v Various Claimants – qualifying conduct/connection
In WM Morrison Supermarkets claims were brought by 9,263 employees or former employees of Morrisons in respect of the wrongful publication online of their personal information by Mr Andrew Skelton, another of Morrison’s employees. Mr Skelton’s wrongdoing was motivated by an “irrational grudge” against Morrisons after being subjected to disciplinary proceedings. The claimants sought damages for alleged distress, anxiety, upset and damage and claimed that Morrisons was: (1) primarily liable for breach of the statutory duty created by s.4(4) of the Data Protection Act 1998, misuse of private information, and breach of confidence; and (2) vicariously liable for Mr Skelton’s conduct under the same three causes of action.
The Supreme Court had to consider whether Mr Skelton’s wrongful conduct satisfied the second limb of the vicarious liability test. The Supreme Court concluded (at ) that the test was not satisfied – Mr Skelton “was not engaged in furthering his employer’s business when he committed the wrongdoing in question”, rather “he was pursuing a personal vendetta”.
Lord Reed analysed in detail Lord Toulson’s judgment in Mohamud v WM Morrison Supermarkets plc  UKSC 11 and considered that it had been widely misinterpreted. Consequently, he outlined what he considered to be its proper interpretation (or, alternatively one might conclude, perhaps his own more restrictive reinterpretation), emphasising the following six points.
First, as to the correct approach, Lord Reed considered (at ) that Lord Toulson had not intended to change the law. Instead, Lord Toulson’s judgment was a summary phrased “in the simplest terms” which had to be read with the previous cases of Lister v Hesley Hall Ltd  UKHL 22 and Dubai Aluminium Company Ltd v Salaam  UKHL 48. In summary, the correct approach to the second limb of the test is to ask the following two questions (at ):
- The first question is what functions or “field of activities”were entrusted by the employer to the employee, for which it is necessary to identify the acts the employee was authorised to do.
- The second question is whether there was a sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable. The court generally has to decide whether the wrongful conduct was so closely connected with acts the employee was authorised to do that, for the purposes of the liability of his employer, it may fairly and properly be regarded as done by the employee while acting in the ordinary course of his employment.
Secondly, according to Lord Reed (at  and ), Lord Toulson did not suggest that a mere temporal or causal connection between the employment and the wrongdoing was sufficient – the close connection test is not merely a question of timing or causation. Accordingly Lord Toulson’s references in Mohamud to “an unbroken sequence of events” and there being “a seamless episode” were not directed towards the temporal or casual connection between the various events, but towards the capacity in which the primary wrongdoer was acting when those events took place – in other words, for Lord Toulson, this supported his conclusion that the primary wrongdoer was acting throughout the entire episode in the course of his employment (at ).
Thirdly, Lord Reed emphasised (at ) that vicarious liability is not to be determined according to individual judges’ sense of social justice but according to orthodox common law reasoning in line with decided cases.
Fourthly, Lord Reed held (at ) that it was a misreading of Lord Toulson’s judgment to fixate on the words that “motive is irrelevant”. For Lord Reed, whether the primary wrongdoer was acting, albeit wrongly, on his employer’s business, or was acting for personal reasons on a frolic of his own, was plainly important. Rather, Lord Toulson’s words were directed to a particular point mentioned by the first instance judge in Mohamud about the reasons why the primary wrongdoer in that case had become violent against the claimant (at ). Lord Reed stresses this again (at ) when he considers that the reason why the primary wrongdoer in WM Morrison Supermarkets acted wrongfully was not irrelevant – on the contrary, whether he was acting on his employer’s business or for purely personal reasons was, for Lord Reed, highly material.
Fifthly, Lord Reed re-emphasised (at ) the point that the mere fact that the primary wrongdoer’s employment gave him the opportunity to commit the wrongful act is insufficient, as is the fact that the wrongdoer’s acts were closely related to his authorised field of activities.
Sixthly, Lord Reed considered (at  and ) that the key distinction was that drawn by Lord Nicholls in Dubai Aluminium at para , between whether the employee was engaged, however misguidedly, in furthering his employer’s business, or whether the employee was engaged solely in pursuing his own interests on a ‘frolic of his own’. Only the former kind of conduct would satisfy the second limb of the test.
Implications for sexual abuse cases
Barclays Bank is the more straightforward of the two cases and should make little difference to sexual abuse claims, primarily because this was itself a sexual abuse case. The status quo is retained, even if Lady Hale declines to adopt a more expansive approach in order to encompass vicarious liability for independent contractors. Furthermore, Lady Hale’s decision not to align vicarious liability with the statutory concept of workers in employment law is especially welcome in the field of sexual abuse claims. Such claims often involve primary wrongdoers who fall outside established employment law statuses, particularly those involved in religious institutions, as well as individuals in voluntary roles, such as in DSN v Blackpool Football Club Ltd  EWHC 595 (QB).
However, Lady Hale’s comparison still provides a useful guide for future cases. In particular, it might be a helpful starting point in each case to consider whether the primary wrongdoer would constitute a worker for the purposes of employment law. If they do not, one should then consider why, for the purposes of the different context of vicarious liability, the law should still consider the relationship to qualify for the first limb of the vicarious liability test.
By contrast, the points from WM Morrison Supermarkets plc outlined above, taken in isolation, point towards a more restrictive approach to the second limb of the vicarious liability test that is unhelpful to sexual abuse claimants. In particular, applying Lord Reed’s approach (at ): sexual conduct frequently does not form part of the primary wrongdoer’s functions or field of activities which he is authorised to do; a temporal or causal connection does not in itself satisfy the close connection test; and the reason why primary wrongdoers act as they do will inevitably be for purely personal reasons. The point that mere provision of an opportunity to commit the wrongdoing is insufficient is also unhelpful.
However, Lord Reed’s judgment clearly distinguishes what he refers to (at ) as the “more tailored version of the close connection test” to be applied only in sexual abuse cases. In particular, Lord Reed (at ) makes the following important observation:
“As Lord Phillips noted in Various Claimants v Catholic Child Welfare Society  2 AC 1, paras 83 and 85, the close connection test has been applied differently in cases concerned with the sexual abuse of children, which cannot be regarded as something done by the employee while acting in the ordinary course of his employment. Instead, the courts have emphasised the importance of criteria that are particularly relevant to that form of wrongdoing, such as the employer’s conferral of authority on the employee over the victims, which he has abused.”
Whilst Lord Reed expressly carves out a different approach for sexual abuse cases, which is helpful, in the future defendants are likely to capitalise as far as they can on Lord Reed’s generally restrictive interpretation. There will probably be an increased pressure on claimants to carefully explain the different approach in sexual abuse cases and to justify the reasons for such differentiation. Indeed, Lord Reed’s judgment can be read as responding to criticism that vicarious liability has become too expansive, instead confining its more expansive tendencies to the particular area of sexual abuse claims. If that is the case, there might also be increased pressure on courts in the future to re-evaluate exactly the reasons why sexual abuse claims should be treated differently from mainstream cases, and whether this practice should continue.
If, contrary to Lord Reed’s judgment, judges do in practice become more restrictive in sexual abuse cases as well as in mainstream cases, this is less likely to affect cases where the primary wrongdoer’s role is to be an all-encompassing institutional or moral authority, such as the warden in Lister, the lay brothers in Catholic Child Welfare Society and lay religious officers such as those in A v The Trustees of the Watchtower Bible and Tract Society  EWHC 1722 (QB) and BXB v Watch Tower  EWHC 156 (QB). This is also indicated by Lord Reed’s approval (at ) of the result, if not the reasoning, in Bellman v Northampton Recruitment Ltd  EWCA Civ 2214 in which the defendant was vicariously liable for an assault committed by an employee in a managerial role against another employee in the course of “asserting his authority over his subordinates”. The cases that are likely to become more problematic will be cases where the primary wrongdoer’s authorised field of activities is far narrower and where the closeness of connection is likely to be considered weaker.
Whatever these judgments mean for future cases, the only thing that is clear is that the Supreme Court’s latest intervention in vicarious liability has generated just as many questions as it has answers.
This article was written by Joshua Cainer. Joshua is practising his second six months of pupillage. He is currently supervised by David E Grant in a seat specialising in commercial, chancery and pensions law. He is also a member of the Attorney General’s Junior Junior scheme.
Joshua is happy to accept instructions across all of Chambers’ areas of practice. To instruct Joshua or find out more about Chambers concerning vicarious liability claims, please contact Graham Woods or Chris Rowe on +44 (0)20 7353 6381.
Barristers: Joshua Cainer | James Counsell QC