Faculty of law blogs / UNIVERSITY OF OXFORD

Vicarious Liability: Slammed Brakes and Open Routes

Author(s)

Sahil Thapa

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10 Minutes
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I. Introduction

The scope of vicarious liability has widened dramatically in recent years. The doctrine has become somewhat of an abyss for holding organisations liable for the actions of their members, extending far beyond the original requirement that the tortfeasor had to work for the defendant as their employee. Yet, the tone of the decisions of the Supreme Court in Barclays Bank Plc v Various Claimants[1] and WM Morrisons Supermarkets plc (Appellant) v Various Claimants (Respondent)[2] represent a slam on the brakes. Taking each requirement to establish vicarious liability in turn, this article charts the development of the law until the present, and argues that there are still a few ways in which the courts can tighten both the coherence of the law and the judicial methodology which has forged it.

These adjustments firstly include a more consistent application of the classic distinction between relationships of or akin to employment and relationships with independent contractors, potentially through more frequent recognition of non-delegable duties, as well as reaffirming that the five incidents outlined by Lord Phillips in Catholic Child Welfare Society[3] should not play equally important roles in finding a sufficient relationship in borderline cases. Secondly, regarding whether the tortfeasor’s tort was committed in the course of their relationship with the defendant, the coherence of the application of the Lister test could be refined by clearly weighing the factors involved in the analysis.

II. The relationship between the defendant and the tortfeasor

a. The development of the law

With respect to the relationship between the defendant and the tortfeasor required for liability to arise, the frontiers of vicarious liability were originally narrow, to the extent that the tortfeasor had to work for the defendant as their employee.[4] Nevertheless, the courts have since pushed the boundaries of vicarious liability by holding defendants liable where the relationship between the defendant and the tortfeasor is merely sufficiently akin to that between an employer and employee. To satisfy this, the relationship must reflect the same incidents as those which make it fair, just and reasonable to impose vicarious liability on an employer, five of which have been outlined.[5] They are where (i) the employer is more likely to have the means to compensate the victim than the employee; (ii) the tort was committed as a result of activity taken on the employer’s behalf; (iii) the employee’s activity was part of the business activity of the employer; (iv) the employer created the risk of the tort committed; and (v) the employee was under the control of the employer.

This was the basis for the observation that the law on vicarious liability was ‘on the move’, which was immediately evidenced by the unconventional contemporaneous finding that a relationship between a Christian volunteer and his religious order was sufficiently akin to employment, later stretching to prisoners working in prison kitchens in Cox[6] and the relationship of foster carers with the social services of a local authority in Armes.[7] However, this part of the law on vicarious liability is no longer ‘on the move’, due to the cautious tone of the Supreme Court’s recent decision in Barclays Bank.[8] Firstly, and most significantly, it was stressed by Lady Hale that the traditional distinction between relationships of or akin to employment and relationships with independent contractors has not been eroded by the decisions above.[9] Secondly, it was highlighted that, in doubtful cases, Lord Phillips’ five incidents may be helpful in identifying a relationship sufficiently akin to employment, but the key usually lies in understanding the details of the relationship between the defendant and the tortfeasor, in particular whether the latter is carrying on business on their own account or not.[10] Thirdly, the decision refused to align the common law concept of vicarious liability with the statutory concept of a worker, even considering the legal implications of the gig economy.[11] These remarks demonstrate that the Supreme Court is reluctant to advocate further expansion of the forms of relationship between the defendant and the tortfeasor which can give rise to vicarious liability.

b. An evaluation of the law

It is crucial that the courts place clear and logical limits on the scope of vicarious liability because it is a form of secondary liability which is imposed on the defendant for the tort of another, infringing the principle that the tortfeasor is responsible for their own wrongdoing. The rules governing whether the defendant and the tortfeasor are in a relationship capable of giving rise to vicarious liability are largely under control, but there are a few ways in which coherence of the frontiers of liability could be further improved. Firstly, the recent affirmation of the traditional distinction must be welcomed. It is logical in terms of aligning with the conventional juridical basis of vicarious liability in theories of enterprise risk, which maintain that the defendant’s enterprise should take on the risk of harm caused by those sufficiently connected to its profit-making activity, either because they take the benefit of the activity which creates that risk, or because of their role in creating it. In contrast, independent contractors form their own enterprise.

Nonetheless, contrary to the suggestion in Barclays Bank, recent decisions have blurred the clarity of this distinction to try and produce fairer outcomes for claimants, especially where tortfeasors have committed physical and/or sexual assault. For example, Lord Hughes has rightly questioned the extent to which foster carers operate as an integral part of the enterprise of social services, which is geared towards linking children with foster carers, rather than providing daily care.[12] The direct consequence of the court’s expansive approach to the distinction between relationships akin to employment and independent contractors is that the core enterprise risk justification for the existence of vicarious liability struggles to explain its current scope.

An incidental consequence is the strangulation of the common law development of the law governing non-delegable duties. Although English law does not have a single theory to explain when or why such duties are imposed, one of the broad categories of case in which such a duty has been held to arise is where there is an antecedent relationship between the defendant and the claimant, the duty is a positive or affirmative duty to protect a particular class of persons against a particular class of risks, and the duty is by virtue of that relationship personal to the defendant.[13] A non-delegable duty could have been recognised in Armes, insofar as the Supreme Court appears to have based their decision on account of the features of the relationship between the defendant local authority and the claimant foster child.

To fortify the distinction between relationships akin to employment and independent contracting, there should be greater engagement with and development of the case law interpreting the criteria to identify a non-delegable duty based on a prior relationship. In particular, the need for the defendant to delegate to a third party some function which is an integral part of the positive duty which they have assumed towards the claimant.[14] In the context of the liability of schools, Giliker has echoed this concern by highlighting the difficulties in applying the ‘integral part’ analysis in cases where third parties provide services of educational benefit to children which are arguably not core duties, such as a local theatre trip.[15]

Secondly, although the five incidents used to categorise relationships in borderline cases are clear, the Supreme Court missed an opportunity to refine the logic of this limit on the scope of liability by confirming that the incidents are not of equal importance. It was recognised in Cox that the defendant’s ability to compensate the victim compared to the tortfeasor and their control over the tortfeasor should not play significant roles in categorisation, because it is hard to see how the possession of wealth per se can justify liability, and the ability of the defendant to direct the tortfeasor on how to work is not necessarily determinative of whether there is a relationship akin to employment in the present day, unless there is zero control.[16] Nevertheless, a reassertion is due because, as Dickinson highlights, these incidents regrettably played a substantial role in later cases such as Armes.[17] Thirdly, the Supreme Court’s refusal in Barclays Bank to assimilate the statutory concept of a worker into the scope of vicarious liability is defensible. This would threaten the coherence of the limits on the scope of vicarious liability, since it is difficult to find congruence in their respective rationales of worker protection and enterprise risk. Accordingly, the Supreme Court struck a sensible compromise by illustrating the potential for cross-fertilisation, to the extent of using the Employment Rights Act 1996 s.230(3) to help identify true independent contractors.

III. Tort committed in the course of the relationship with the defendant

a. The development of the law

Regarding whether the tortfeasor’s tort was committed in the course of their relationship with the defendant, the original Salmond test required that the tort be a wrongful act authorised by the employer, or a wrongful and unauthorised mode of doing an authorised act.[18] This area of the law on vicarious liability began to move quickly with the establishment of a new test in Lister which, less rigorously, demands a ‘sufficiently close connection’ between the tort and the tortfeasor’s activity, such that it is fair and just to impose liability on the defendant. The courts appear to have reached the position that this test will be satisfied if the tortfeasor’s tort would have fulfilled the Salmond test or if there was an inherent or special risk associated with the tortfeasor’s work that they would commit the particular kind of tort.[19] In Mohamud[20], the Supreme Court proceeded to controversially stretch the frontiers of this test to cases where the tortfeasor commits an intentional tort as part of a seamless episode where he purports to act for the defendant’s business. In that case, the claimant used a petrol station kiosk and approached a member of staff with a question, who responded aggressively, and assaulted the claimant as he left the premises. The defendant employer was held vicariously liable upon appeal.

The tone of the Supreme Court’s decision in WM Morrisons has placed a brake on the movement of this part of the law.[21] This was primarily achieved by adopting a strained interpretation of Lord Toulson’s reasoning in Mohamud. Firstly, it was held that, when referring to a seamless episode, Lord Toulson was not concerned with the temporal or causal connection between the various events, which are not decisive, but rather towards the capacity in which the tortfeasor was acting when those events took place.[22] Secondly, the court interpreted Lord Toulson’s comment that the tortfeasor’s motive is irrelevant to mean that the reasons why the tortfeasor had become violent were not clear in Mohamud.[23] Thirdly, it was added that, when considering this requirement, the courts should identify from the decided cases the factors or principles which point towards or away from vicarious liability in the instant case, and which explain why it should or should not be imposed.[24]

b. An evaluation of the law

The Supreme Court was right to play down Lord Toulson’s remarks in Mohamud which, with respect, were misguided. The reference to a seamless episode as a substantive legal requirement is malleable to the point of futility. Also, it is hard to see why the tortfeasor’s motive in committing the tort should not provide useful evidence in assessing whether they were acting in the course of their relationship with the defendant. Indeed, as McBride and Bagshaw highlight, Mohamud arguably added another category to the situations in which the Lister test will be satisfied, namely where the tortfeasor’s tort was committed in the workplace.[25] The decision constituted a high-water mark in the expansion of vicarious liability, at the expense of reconciling logically with enterprise risk, since a tortfeasor committing a tort in their workplace does not necessarily mean they were acting as a part of the defendant’s enterprise.

However, the focus on a pragmatic approach to the Lister test in WM Morrisons does not provide a useful guide to refining the coherence of the limits on the scope of this section of the law on vicarious liability. As Lee points out, the emphasis on a multifactorial approach using precedent does not help the courts to clearly determine the weight which should be given to different factors in the already open-ended Lister analysis.[26] To strike a more appropriate balance between maintaining legal certainty for litigants and practitioners and achieving fair outcomes, the Supreme Court should outline the relative importance of different considerations in the application of the Lister test as lucidly as possible, for example by providing a non-exhaustive guide to the significance of relevant types of inherent or special risk associated with the tortfeasor’s work. These include where the tortfeasor’s occupation gave them special skills which they drew on to commit the tort, where it meant that they had a special position of trust and confidence which enabled them to commit the tort, and where it exposed them to certain aggravations or annoyances which made them very likely to commit the tort.[27] With respect to the two former types of inherent risk, the moral implications of such exploitative tortfeasance may very well mean that they hold greater weight than if the tortfeasor‘s job merely carried with it certain aggravations or annoyances which made them more likely to commit the tort.

IV. Conclusion

The scope of vicarious liability is no longer expanding rapidly due to a shift in direction by the Supreme Court in Barclays Bank and WM Morrisons. Be that as it may, the coherence of the frontiers of liability could be further improved. Firstly, regarding the rules governing whether the defendant and tortfeasor are in a relationship which can produce vicarious liability, this requires a more faithful application of the classic distinction between relationships of or akin to employment and relationships with independent contractors, potentially assisted by subsuming more cases under non-delegable duties, as well as reasserting that the five policy reasons outlined by Lord Phillips in Catholic Child Welfare Society should not play equally significant roles in borderline cases. Secondly, with respect to whether the tortfeasor’s tort was committed in the course of their relationship with the defendant, the coherence of the application of the Lister test could be refined by clearly weighing the factors involved in the analysis, such as the kinds of inherent or special risk associated with the tortfeasor’s work.

I would like to thank Dr. Clara Martins Pereira for her comments on an earlier draft. I am also grateful for the feedback of the Senior Editorial Team of the Oxford University Undergraduate Law Journal’s 11th Edition.

 

[1] [2020] UKSC 13, [2020] AC 973.

[2] [2020] UKSC 12, [2020] AC 989.

[3] [2012] UKSC 56, [2013] 2 AC 1.

[4] Honeywill and Stein Ltd v Larkin Brothers Ltd [1934] 1 KB 191 (CA) 196 (Slesser LJ).

[5] Various Claimants v Catholic Child Welfare Society [2012] UKSC 56, [2013] 2 AC 1 [35], [47] (Lord Phillips).

[6] [2016] UKSC 10, [2016] AC 660.

[7] [2017] UKSC 60, [2018] AC 355.

[8] (n 1)

[9] ibid [24].

[10] ibid [27].

[11] ibid [29].

[12] Armes at [88].

[13] See e.g. Woodland v Essex CC [2013] UKSC 66, [2014] AC 537 [7] (Lord Sumption).

[14] ibid [23].

[15] Paula Giliker, ‘Vicarious liability, non-delegable duties and teachers: can you outsource liability for lessons?’ (2015) 31(4) JPN 259, 270.

[16] Cox at [20]-[21] (Lord Reed).

[17] Andrew Dickinson, ‘Fostering uncertainty in the law of tort’ (2018) 134 LQR 359, 362.

[18] John Salmond, A treatise on the English law of liability for civil injuries (Stevens and Haynes, 1907).

[19] Lister v Hesley Hall Ltd [2001] UKHL 22, [2002] 1 AC 215 [20] (Lord Steyn), [82] (Lord Millett).

[20] [2016] UKSC 11.

[21] (n 2)

[22] ibid [28], [31] (Lord Reed).

[23] ibid [30].

[24] ibid [24].

[25] Nicholas McBride, Roderick Bagshaw, Tort Law (6th edn, Pearson 2018) 848.

[26] James Lee, ‘The Supreme Court, Vicarious Liability and the Grand Old Duke of York’ (2020) 136 LQR 553, 556.

[27] C.f. Mattis v Pollock [2003] EWCA Civ 887, [2003] 1 WLR 2158; Catholic Child Welfare Society; and Gravill v Caroll [2008] EWCA Civ 689, [2008] ICR 1222.

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