Case Alert ‐ [2017] UKSC 60 

Supreme Court again considers the nature of the relationship required to find a defendant vicariously liable

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. The Supreme Court first discussed the issue in Cox v Ministry of Justice. The Supreme Court referred to Lord Phillips' earlier 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 held that those five factors are not all equally significant. The 3 most important factors were: (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. There was also no need for the defendant to be carrying on activities of a commercial nature.

The issue in this case was whether a local authority can be vicariously liable for the torts committed by foster parents against children placed with them while in care. The Court of Appeal (deciding the case before the Cox ruling) had held that the local authority did not exercise sufficient control over the foster parents for vicarious liability to arise. The Supreme Court has now overturned that decision by a ruling of 4 to 1.

The Supreme Court held that the foster parents provided care as part of the local authority's organisation of its child care services. That in turn created a relationship of authority and trust between the foster parents and the children "in circumstances where close control cannot be exercised by the local authority, and so renders the children particularly vulnerable to abuse". It was concluded that: "although the foster parents controlled the organisation and management of their household to the extent permitted by the relevant law and practice, and dealt with most aspects of the daily care of the children without immediate supervision, it would be mistaken to regard them as being in much the same position as ordinary parents. The local authority exercised powers of approval, inspection, supervision and removal without any parallel in ordinary family life. By virtue of those powers, the local authority exercised a significant degree of control over both what the foster parents did and how they did it, in order to ensure that the children’s needs were met".

The Supreme Court went on to note that "More fundamentally, it is important not to exaggerate the extent to which control is necessary in order for the imposition of vicarious liability to be justified" (something which the Supreme Court also said in Cox).

Lord Hughes gave the dissenting judgment, arguing that although the local authority made decisions about where the children should live, the daily lives of the children were not thereafter managed by the local authority. The foster carers provide an upbringing as part of a family and so "It seems to me to follow that if vicarious liability applies to “ordinary” foster parents, on the basis that they are doing the local authority’s business, then it must apply also to family and friends placements with connected persons. What of placements with parents? These too may be in the interests of the children, and even after a care order has been made. If they are, it is desirable that they are encouraged, as at present consideration of them is encouraged. It would, however, be artificial in the extreme to say of such placements that the parent’s care was given on behalf of the local authority, or that it was integrated into the caring systems of the authority". The majority disagreed with that argument, though, on the basis that the parents or other family members had not been "recruited, selected or trained by the local authority" in order to perform their child care functions.

COMMENT: This renewed confirmation by the Supreme Court that a lack of control over day to day activities, and an absence of commercial activity need not preclude a finding of vicarious liability might lead to a concern, especially amongst liability insurers, that further relationships may fall within the first test in future. That is especially so because, as Lord Hughes pointed out, although this case involved deliberate wrongdoing and abuse, vicarious liability can also arise in respect of negligent acts or omissions.