A local authority has been held vicariously liable for injuries to a foster child who was physically and sexually abused by foster parents while placed in two separate homes. The Supreme Court reviewed the law on non-delegable duties of care and vicarious liability in the case of Armes –v- Nottinghamshire County Council (2017).

The Supreme Court held by a majority of four to one that:

(a) it was not fair, just or reasonable to impose a non-delegable duty on the local authority in the circumstances of this case (b) the local authority was vicariously liable for the abuse.

Alastair Gillespie reviews the decision.

Background

The claimant was physically and sexually abused by two sets of foster parents while placed in their care by the local authority defendant between 1985 and 1988. She claimed against the local authority on two grounds:

  • That it had breached a non-delegable owed duty to her, and/or
  • That it was vicariously liable for the actions of the foster parents.

Both the trial judge and Court of Appeal rejected the claimant’s arguments. She appealed to the Supreme Court. The leading judgment setting out the Supreme Court’s decision was given by Lord Reed, with whom Lord Kerr, Lord Clarke and Lady Hale agreed. Lord Hughes delivered a short dissenting opinion.

Non-delegable duty of care

A non-delegable duty of care is:

  • A duty to ensure that care is taken rather than simply to take care
  • A higher standard of duty than an ordinary duty of care

Duties like these must be kept within reasonable limits. Following the case of Woodland –v- Essex County Council (2013) there are two categories of case in which a non-delegable duty has been found to exist. The first category, in which an independent contractor is employed to carry out a function which is either inherently hazardous or liable to become so, did not apply to this case.

The second category was more relevant and required three critical characteristics to be present – (i) an antecedent relationship (ii) a positive or affirmative duty and (iii) application by virtue of a personal relationship. It is also necessary to identify whether it would be fair, just and reasonable to impose a non-delegable duty.

However, having set this out, Lord Reed emphasised that judicial statements do not have the force of statute and are not set in stone. He also highlighted that the necessary duty could be created by statute and that the duty did not have to be adopted voluntarily as had been suggested in Woodland.

The critical question in this case was whether the local authority was either:

  • under a duty to perform the function of providing day to day care to a child in care; or
  • whether it was simply under a duty to arrange to have that function performed and to take care in making and supervising those arrangements.

To assess that question Lord Reed considered the statutory framework at the time of the claimant’s care in particular whether section 10 of the Child Care Act 1980, which confers the powers and duties of a parent or guardian on the local authority, imposed a duty not only to take care for the safety of the child (the ordinary duty), but also to ensure that care is taken (a non-delegable duty).

Case law considering the duties of a parent is relevant to the question, and it is clear that this does not impose a non-delegable duty on a parent. Lord Reed accepted that a local authority is in a different position from a parent but concluded that this difference informs only the context of the question of whether reasonable care was taken, it does not ‘entail that a different duty altogether should be imposed’. This reasoning led Lord Reed to conclude that the local authority in this case should not be subject to a non-delegable duty of care. A non-delegable duty would be too broad in circumstances where children were under the care and control of foster parents. It would be too demanding a responsibility to place on a local authority.

Lord Reed then went on to consider whether the local authority could nonetheless be vicariously liable for the acts of the foster parents.

Vicarious liability

Lord Reed reviewed the principles for imposing vicarious liability set out in Cox –v- Ministry of Justice (2016). There are two overarching questions:

  • What relationship is necessary between an individual committing a tort and a defendant to justify vicarious liability?
  • How must the individual’s conduct be related to that relationship to justify vicarious liability?

In this case only the first question was relevant. The local authority accepted that abuse would amount to conduct capable of satisfying the second question.

Following Cox, five factors must be considered, although these factors are not necessarily equally weighted. The context of the case determines which are most important. While the factors refer to employer and employee, it is established that the relationship between the defendant and the individual that committed the tort need not be a traditional employer-employee relationship. Lord Reed reviewed each of the five factors in turn.

  • The tort will have been committed as a result of activity being taken by the employee on behalf of the employerThe local authority was under a statutory duty and took steps to discharge that duty. These included recruiting and training foster parents, inspecting their homes, and paying them an allowance. While the foster parents had day-to-day care of the child, they were required to co-operate with the local authority, including meeting with them to discuss the child. The local authority maintained decision-making powers over matters such as contact with the foster child’s family. Bearing this in mind, Lord Reed concluded that foster parents could not be said to be carrying out an independent business.
  • The employee’s activity is likely to be part of the business activity of the employerWhile the arrangement was complex, in this case it was ‘impossible to draw a sharp line’ between the activities of the local authority and the foster parents. The local authority was required to promote the child’s welfare. The foster parents enabled it to do so.
  • The employer, by employing the employee to carry on the activity will have created the risk of the tort committed by the employeeThe local authority’s placing of the children in the direct care of the foster parents without the ability to exercise close control made the children vulnerable to abuse. That risk is necessarily inherent in the decision to further the child’s best interests by placing them in a family setting.
  • The employee will, to a greater or lesser degree, have been under the control of the employerWhile the foster parents controlled the organisation and management of their household, and exercised daily care of the children without immediate supervision, the local authority retained control in a number of areas. These included visiting and assessing the children, reviewing their welfare and requiring them to be medically examined. The local authority could, ultimately, remove the children from the foster parents’ care if concerned for their welfare. The local authority exercised ‘a significant degree of control over both what the foster parents did and how they did it’. In light of this, the foster parents were in a different position from other parents. This factor was present in this case. Lord Reed also noted, in reviewing reasons that had led the Court of Appeal to refuse to impose vicarious liability, that it is important not to exaggerate the degree of control necessary to found vicarious liability . Neither ‘micro-management’ nor ‘any high degree of control’ is necessary.
  • The employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liabilityFoster parents would rarely have the ability to satisfy a substantial award of damages, or to insure against their own criminal activity. The local authority is much more able to compensate victims of abuse.

Review of the five factors led Lord Reed to conclude that a finding of vicarious liability was justified on the facts. However before concluding his judgment he reviewed arguments against it, including points raised by the Court of Appeal, and those cited by Lord Hughes in his dissenting judgment.

One concern is that imposition of vicarious liability in this scenario might discourage local authorities from placing children in foster homes. Lord Reed dismissed this on a number of grounds, for example that no evidence had been produced to confirm that it would be more financially advantageous to place children in residential care rather than foster care. Furthermore, if imposing vicarious liability in this case led to a flood of similar cases, it would be only right to allow these cases to expose what had happened.

Lord Hughes was concerned that imposing vicarious liability on foster parents could lead to similar liability for local authorities in relation to parents and other family members. Lord Reed dismissed this argument, making clear that the court would be unlikely to be persuaded that vicarious liability in such a situation was justified. Furthermore he made clear that this decision relates to the law and practice in place at the time the claimant was abused. It is not intended to address the situation under the current law.

The law of vicarious liability has been on the move in recent years, and the question is bound to be asked about the effect that this case will have on the development of the concept more generally than in the factual scenario described. Vicarious liability is a legal construct through which innocent organisations are fixed with liability for the fault of others sufficiently connected with them. Any widening of the scope of vicarious liability will result in fixing more and more organisations with liability through no fault of their own. It should be remembered that in this case the local authority had been found not to have been negligent.

The one certainty to be drawn from this decision is that the scope of vicarious liability is wholly uncertain. As varying factual scenarios are placed before the court, the limit of the concept will continue to be tested. This decision could be seen as further extension of vicarious liability following quickly on from the recent High Court decision in Various claimants –v- Barclays (2017). In that case claimants were allegedly assaulted by a doctor engaged by their prospective employer to carry out medicals as part of the recruitment process. The defendant argued that a GP who was paid fees to perform medical examinations on prospective employees was an independent contractor for whom it was not vicariously liable. That argument was rejected but the decision has been appealed. It will be interesting to see whether the very different circumstances of that case prompt another assessment by the courts of this strict liability concept.

Of course each case is fact-specific and it is heartening to note that in his judgment Lord Reed emphasised that while application of the Cox criteria provides a framework, judges may still exercise discretion. Judicial opinion is not statute, and is not set in stone. Furthermore, the facts of this case make clear that there was a significant degree of integration of the foster parents into the local authority. There will be many other scenarios in which the degree of integration will be much lower. But in all these cases the fact-specific nature of the assessment presents a challenge to clients and their advisers in predicting how a court will weigh the different Cox criteria. Even though vicarious liability continues to be on the move, it also continues to have its limits.