In 1985 Ms Armes was placed into foster care by Nottinghamshire County Council. Over the next three years she suffered abuse. At her first foster family, she was physically abused. At the next, she was sexually abused. Her treatment was described as cruel and despicable.

There was no question of negligence by Nottinghamshire County Council. But Ms Armes argued that they had a non-delegable duty of care, or else that they were vicariously liable for abuse perpetrated by the foster parents.

At first instance, the court held that both arguments failed. The Court of Appeal agreed. Now, however, the Supreme Court has overturned that decision in Armes v Nottinghamshire County Council [2017] UKSC 60. There was no non-delegable duty, said the court, but the council was vicariously liable.

Vicarious liability has undergone significant extension in recent years. Historically, it meant an employer was liable for the acts of the employee undertaken for the benefit of the business. That has been broadened to situations "akin to employment" and to circumstances where there was no benefit to the quasi-employer. In Cox v Ministry of Justice [2016] UKSC 10 the Supreme Court had set out certain principles which it said would assist in determining whether vicarious liability should be imposed. That was followed recently in Various Claimants v Barclays Bank.

This time, the Supreme Court drew on the principles from Cox. In particular:

  • Business activity: the local authority recruited, trained, supervised and paid the expenses of the foster carers. The fostering was for the benefit of the council. While that may be right, it is worth recalling that it was not held that the council failed in any of the aspects of its role.
  • Creation of risk and degree of control: placing the child created a relationship of trust. The lack of close control meant children were particularly vulnerable. It was not necessary for the council to micro-manage the care for them to be vicariously liable. That seems to point against any authority placing children in care. Lord Hughes dissented, holding this may inhibit authorities from placing children. It is not hard to see why.
  • Ability to pay damages: most foster parents could not meet a substantial award. Local authorities can more easily compensate, the court said. Of course, that compensation will often come from present-day funds and will therefore be taken away from present-day needs.

This is an undoubted extension in the scope of vicarious liability. It will be concerning for local authorities and their insurers – but perhaps especially for those local authorities which will be picking up the costs themselves.

But the relevance of the decision goes beyond local authorities. In any situation where a party has some form of control and the funds to pay, will they now be held liable for abuse suffered? Or for other forms of negligence? Will local authorities be liable to compensate those abused in voluntary homes, particularly those who no longer exist or cannot trace insurance? At what point does a party delegating a task or sub-contracting a role cease to be vicariously liable?

The momentum is all in one direction. We can anticipate that the scope of claims for vicarious liability will only expand. We can also anticipate more abuse victims coming forward if they can identify a party with funds to meet their claims.