The question of whether an employer should be held liable for the deliberate criminal assaults of its employees by an independent contractor has been considered by the Court of Appeal in its recent judgment in Barclays Bank plc v Various Claimants. The High Court's judgment was discussed in our Adviser Alert 'How far will the elastic concept of vicarious liability stretch?'.
In her judgment at first instance, Mrs Justice Nicola Davies DBE concluded, following the tests in E v English Province of our Lady of Charity, Various Claimants v Institute of Brothers of Christian Schools and Cox v Ministry of Justice, that it was fair, just and reasonable for the bank to be vicariously liable for sexual assaults by the doctor on the bank's employees and applicants for employment. The relationship between the bank and its doctor, Dr Bates, and the connection between the assaults and the quasi-employment of the doctor meant there was a sufficiently close relationship to support a finding of vicarious liability.
The bank appealed to the Court of Appeal on the basis that the judge was wrong in finding Dr Bates' relationship with the bank to be akin to employment, that she was wrong not to find him to be an independent contractor and that she applied the law incorrectly to the facts of the case. The bank asserted that the doctor was an independent contractor and the defence of that status had not been abolished by any of the recent decisions.
Noting that the law of vicarious has been on the move, the lead judgment of Lord Justice Irwin considers the decisions of the Supreme Court in Cox v Ministry of Justice, Mohammed v Wm Morrison Supermarkets plc and Armes v Nottinghamshire County Council and the fact that independent contractors often perform operations intrinsic to a business enterprise over long periods of time. Whilst vicarious liability was not established in Woodland v Swimming Teachers Association, that case had preceded the other cases and Lord Justice Irwin implies that, if decided today, the local authority may well have been vicariously liable for the actions of its independent contractor, the swimming teacher.
Upholding the judgment of Mrs Justice Nicola Davies DBE, the Court of Appeal reconsidered the tests upon which the High Court judgment was based. It confirmed that the question of whether the bank was more likely than the Estate of the deceased Doctor to have the means of compensating the Claimants should be considered at the time of litigation, not at the time the torts were committed. In this case the bank was the only potential compensator in this matter.
The Court confirmed that the torts were committed as a result of the doctor's activity on behalf of the bank as the medical examinations were required by the bank to ensure that its job entrants were fit and healthy. Accordingly the medical examination process was part of the bank's business activity. As the bank had specified the nature of medical examinations and specified the time, place and examiner performing them it had created the risk of the doctor committing the assaults. In considering whether the doctor was, to a greater or lesser degree, under the control of the bank, Lord Justice Irwin noted the bank's specification of the questions to be asked and physical examinations to be performed and found that the bank had exercised sufficient control over the doctor to satisfy this test. The Court of Appeal said that the issue of control exercised by the bank over the doctor was perhaps the most critical factor.
The High Court's judgment on whether the torts were sufficiently closely connected with the employment / quasi employment was upheld, the medical examinations performed by the doctor (in which the assaults occurred) being the whole purpose of the doctor's relationship with the bank.
Finally, the Court of Appeal reconsidered whether it was just and fair for the bank to be required to meet the claims; it agreed that it was.
Whilst the provision of a 'bright line' test, such as the status of an independent contractor, would be useful in such cases and make assessments of liability easier, the Court of Appeal has dismissed the use of such a test and confirmed that the Supreme Court's decisions in Cox and Mohammed enable the facts of a given case to be analysed and a decision on vicarious liability to be made on a case by case basis.
There remains a strong desire by the courts to find vicarious liability outside of the traditional employer-employee relationship and, where businesses have contracted work to individuals or other businesses, they may still face claims following negligent or deliberate actions by the contractor. The decision illustrates that the broad principle that there is no vicarious liability for independent contractors is not absolute. Each case must be considered on its own facts, organisations must now ensure independent contractors carry the requisite insurance cover.