Various claimants v Barclays Bank Plc[2017] EWHC 1929 (QB)

Although this case was in respect of alleged sexual abuse, it highlights key points in respect of the test for vicarious liability and how this is applied by the courts. It can be seen that the same criteria will be applied to personal injury claims where it is alleged that a defendant employer is vicariously liable for the negligent acts of its employee to include an outsourced provider or independent contractor.

The facts

In this case, there were 126 claims against the defendant in respect of alleged sexual assaults perpetrated by a male doctor, who carried out medical assessments on prospective employees between 1968 and 1984. The majority of the claimants were young women who were required to attend these medical assessments as part of the defendant’s application process.

The claimants alleged that the doctor carried out inappropriate medical examinations and the High Court was required to determine a preliminary issue in respect of whether the defendant could be vicariously liable for the doctor’s actions.

The claimants’ case was that the defendant utilised the services of the doctor in order to satisfy itself of the medical fitness of prospective employees. Also, it was alleged that the defendant dictated the content and nature of the examinations, which furthered the defendant’s business of employing staff and being profitable.

The defendant argued that the doctor was an independent contractor and not an employee so vicarious liability could not attach. Also, it was argued that the examinations were not part of the defendant’s business, were carried out at the doctor’s home and that he controlled his own work.

Decision

The High Court stated that there is a two stage test for determining whether or not vicarious liability exists:

  1. Is the relationship one of employment or akin to employment?

  2. If so, was the tort sufficiently closely connected with that employment or quasi employment?

In respect of the first stage, the five criteria identified by Lord Phillips in Catholic Child Welfare Society [2012] UKSC 56 and Cox v Ministry of Justice [2016] UKSC 10, were considered relevant and needed to be positively answered:

(i) Whether the employee was more likely to have the means to compensate the victim than the employee, and to have insured against that liability

(ii) Was the tort committed as a result of activity being undertaken by the employee on behalf of the employer?

(iii) Was the employee’s activity part of the business activity of the employer?

(iv) Had the employer, by employing the employee to carry on the activity, created the risk of the tort being committed?

(v) Was the employee, to a greater or lesser degree, under the control of the employer?

In respect of factor (i), this could be positively answered. The doctor had died and his estate had already been distributed. Also, the claimants had no recourse against him and his medical insurers would not provide indemnity. However, the defendant had the means to meet the claims.

As to factor (ii), the medical examinations and subsequent reports were for the benefit of the defendant. It was concluded that the defendant had chosen the doctor and prospective employees were given no choice but to attend the medical examination because it was an essential part of the recruitment process. As a result, this could be positively answered.

In response to factor (iii), this could be positively answered because the medical assessment enabled the defendant to make sure that an employee was physically suitable for the role. It was clear that without a workforce the defendant could not function as this was an intrinsic part of its business. Also, it was held that the doctor was an integral part of the business activity of the defendant.

As to factor (iv), the court concluded that the defendant had created the risk of the tort being committed because it had directed the claimants to attend the doctors home for an examination in a room alone and the examination included, for example, a chest measurement.

In respect of question (v), the court accepted that the doctor organised his own professional life and carried out other medical activities that were not for the defendant. However, it was held that this did not negate a control argument nor did the fact that the examinations had been carried out at the doctor’s home.

The court held that the issue was the control that existed between the defendant and the doctor in respect of the medical assessments, examinations and reports. Here, the defendant had directed the doctor in respect of the questions to be asked and the physical examinations to be carried out. Also, the defendant has sufficient control because it had made it mandatory for the medical examinations to take place.

All factors under stage 1 could be positively answered so the test was met.

In respect of stage 2, the court held that the sexual assaults were sufficiently closely connected to the doctor’s employment because they were carried out during the course of the medical examinations, which the defendant required prospective employees to undertake. Also, it was held that the claimants were placed in physical proximity with the doctor because they had been required to have the examination, which had taken place at a time and place dictated by the defendant.

Finally, the court considered whether it was fair, just and reasonable to impose liability on the defendant. In respect of this point, it was noted that the claimants’ only recourse was against the defendant and even though limitation was an issue this did not make it unfair for the defendant to be found liable.

As a result, it was held that the defendant would be vicariously liable for any assaults proven to have been perpetrated by the doctor during the examinations.

What this means for you

The law on vicarious liability is on the move and this case is a further example of the potentially widening set of circumstances in which it might arise. Here, the High Court imposed liability on an apparently innocent employer for the actions of an independent contractor. This decision can be seen as being inevitable following the decisions of the Supreme Court in Mohamud v WM Morrison Supermarkets Plc [2016] UKSC 11 and Cox v Ministry of Justice [2016] UKSC 10.

This is a further example of the potentially widening set of circumstances in which vicarious liability might arise. Also, it highlights that a traditional employment relationship is no longer required for vicarious liability to attach. It can be seen that the test is now in respect of whether there was sufficient control and to what extent there had been integration into the defendant’s business, especially in cases where work has been outsourced to other entities.

In this case, the defendant could not escape from the fact that it had created the circumstances in which its doctor could act and that there had virtually been no come back on the doctor for his actions. It can be seen that the defendant could have taken simple and effective preventative measures, such as employing a female doctor to examine female employees or to ensure that the male doctors was supervised by a female doctor at all times.

This judgment highlights the need for employees to not be complacent in respect of potential abhorrent behaviour or misconduct carried out by independent contractors towards their employees. Also, employers should carefully consider the relationships and arrangements they have with businesses in which they outsource tasks and to bear in mind this potential limb of liability when making insurance arrangements.