UK & Europe
Supreme Court reviews the principle of vicarious liability in two complementary judgments.
Lord Phillips stated in Various Claimants v Catholic Child Welfare that "the law of vicarious liability is on the move". In these two complementary judgments, the Supreme Court has taken the opportunity "to take stock of where it has got to so far". Vicarious liability requires (1) the necessary relationship between the defendant and the wrongdoer, and (2) the necessary connection between that relationship and the wrongdoer's conduct. Both issues arose in these appeals.
(1) What relationship is needed?
In Cox v Ministry of Justice, it was held that the Ministry of Justice was vicariously liable for the negligence of a prisoner who injured the claimant employee. The Supreme Court referred to Lord Phillips' judgment in Catholic Child Welfare in which he laid down five criteria for establishing a relationship which is "akin to that between an employer and employee", and which therefore can give rise to vicarious liability. The Supreme Court has now held that those five factors are not all equally significant. The first factor was whether the employer is more likely to have the means to compensate the victim than the employee and is insured against that liability. The Supreme Court held that that factor is unlikely to have independent significance: "As for insurance, employers insure themselves because they are liable: they are not liable because they have insured themselves. On the other hand, given the infinite variety of circumstances in which the question of vicarious liability might arise, it cannot be ruled out that there might be circumstances in which the absence or unavailability of insurance, or other means of meeting a potential liability, might be a relevant consideration". Nor was the fifth factor (that the tortfeasor was under the control of the defendant) of independent significance now.
The three remaining factors listed by Lord Phillips were inter-related: (1) the tort will have been committed as a result of activity being taken by the tortfeasor on behalf of the defendant, (2) the tortfeasor's activity is likely to be part of the business activity of the defendant, and (3) the defendant, by employing the tortfeasor to carry on the activity, will have created the risk of the tort committed by the tortfeasor.
The Supreme Court has now held that these factors are not confined to some special category of cases, such as sexual abuse cases. There is no need for the defendant to be carrying on activities of a commercial nature: "It is sufficient that there is a defendant which is carrying on activities in the furtherance of its own interests. The individual for whose conduct it may be vicariously liable must carry on activities assigned to him by the defendant as an integral part of its operation and for its benefit. The defendant must, by assigning those activities to him, have created a risk of his committing the tort".
The Supreme Court recognised that a wide range of circumstances might satisfy these requirements. It also found the requisite relationship on the facts of this case.
(2) What connection is needed between the relationship and the conduct?
In Mohamud v WM Morrison Supermarkets, the Court of Appeal had held that there was no vicarious liability where a petrol station employee had seriously injured a customer in an unprovoked attack which took place on the employer's premises. The appellant sought to argue that the "close connection" test developed by the courts should be replaced with a broader test of "representative capacity". In other words, rather than asking if the wrongful conduct is so closely connected with acts which the employee was authorised to do that it may be fairly and properly regarded as done in the ordinary course of its business (or the employee's employment), it was argued that the test should be whether a reasonable observer would consider the employee to be acting in the capacity of a representative of the employer at the time of committing the tort. That argument was rejected by the Supreme Court.
It held that the court should consider two matters:
(a) What functions or "field of activities" have been entrusted by the employer to the employee (and this question should be addressed broadly); and
(b) Was there 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 for reasons of social justice. Prior caselaw has found this connection where an employee has used or misused the position entrusted to him in a way which injured the victim.
Applying those tests to the facts of the case, the Supreme Court held that the employer was vicariously liable. It was the employee's job to attend to customers and their inquiries. Even though he performed that job in an inexcusable manner, it was still within "the field of activities" assigned to him. The attack resulted from an "unbroken sequence of events" – the employee had followed up the initial encounter at the counter by following the victim to his car, where he then attacked him. That was said to be a "seamless episode": "I do not consider that it is right to regard him as having metaphorically taken off his uniform the moment he stepped from behind the counter". Furthermore, he had told the victim to never return to the petrol station: "This was not something personal between them; it was an order to keep away from his employer's premises…in giving such an order he was purporting to act upon his employer's business". It made no difference what the employee's motive was (or that his supervisor had tried to stop him at one stage).
The Supreme Court also criticised the test set out in Salmond, Law of Torts, namely, whether the wrongful act was an unauthorised mode of doing some act authorised by the employer: "even with stretching, it was not universally satisfactory".
COMMENT: Prior caselaw has usually held that there was vicarious liability where the employee's job involved some obligation to keep order and involved potential confrontation with a customer. Although the Supreme Court said that it was not altering the previously applied test, its application of that test to the facts of this case is arguably more generous than in many previous cases. It adopted a broad approach to whether the assault was committed in the course of the employee's employment. In relation to a similar case involving an attack by an employee at a petrol station, Warren v Henlys , where no finding of vicarious liability was made, Lord Toulson commented that: "if the attendant had punched the customer because he believed, rightly or wrongly, that the customer was leaving without payment, I would regard such conduct as occurring within the course of his employment" (but as the victim had been attacked later on, when he returned with a police officer to make a complaint, the relationship had changed from customer and employee to complainant and the subject of the complaint).
As for the decision in Cox, the Supreme Court has also arguably widened the scope of cases which will fall within the test of a necessary relationship by emphasising that there needn't be any business activity being carried on by the defendant, just activities which "further its own interests".