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Published 7 August 2018
If an employee is alleged to have caused an injury, or assaults or abuses someone, and the employer settles the claim on the basis that it is vicariously liable for the employee’s negligence, should that employee then be able to sue their employer for the way the claim was resolved - for example, by settling the claim and not defending their reputation in full by taking the case to trial?
Does the employer owe a duty of care to this employee, who may well be the key witness in the case, to protect their reputation and welfare?
If the answer were to be yes, one can imagine professional witnesses such as teachers suing their employer for having settled a Human Rights Act claim arising out of their treatment of a pupil. One can equally imagine abuse cases being stalled as alleged abusers instructed their own lawyers to argue how the claim should be handled. Would a Highway Authority, before it decided to settle a claim, have to worry about the sensitivities of the highway inspector who missed the defect?
In short, there would be the unenviable prospect of considerable satellite litigation which would slow down claims and clog up the court system.
Worrying, yes, but, this was the scenario that was gaining traction after the Court of Appeal decision in this case, but was knocked out decisively by the Supreme Court through its striking out the claimants’ claims on 25 July 2018.
The claim arose from the arrest by Police Officers of a suspected terrorist, following which the suspect presented a claim for personal injuries, alleging that the police force was vicariously liable for the actions of its officers. Whilst initially defended, the claim was compromised with an admission of liability and apology for gratuitous violence on the part of the officers and, after their acquittal on charges of assault, the officers pursued claims for compensation in respect of reputational, economic and psychiatric damage.
Did the police force owe duties to its officers to safeguard their interests when defending the claims presented by the suspect which included duties not to sacrifice their interests and professional reputations when deciding to compromise the claim?
The court noted that, whilst an employee may wish his reputation to be vindicated through the defence of a claim presented against his employer, it is the employer that will face the cost of defending the claim and which may be required to pay damages to the claimant; the employer's insurer may also have interests in the claim.
Four reasons persuaded the court not to impose a duty on employers to protect the reputations of their employees when defending civil claims presented against the employer. First, there is a public policy issue that parties should be able to resolve their disputes without fear of incurring liability to others. Second, imposing a duty on employers to its employees to defend a claim effectively would be inconsistent with the important legal policy which encourages the settlement of civil claims out of court. Third, the imposition of the proposed duty would delay or disrupt the progression of civil proceedings, and, fourth, the imposition of the duty would result in satellite litigation.
This was a strong judgement – the court stated that the proposed duty to employees would have a 'chilling effect on the defence of civil litigation'. It has put a decisive stop to a potential bandwagon that could have had massive implications for the conduct of all cases by employers, where their employees were accused of misconduct or negligence. As decisions of the courts on vicarious liability have extended the scope of liability of employers further (for example last year to local authorities for the actions of foster parents), the court was right to observe that such a duty could have paralysed civil litigation. Employers and their insurers can handle and settle claims as they see appropriate, in the light of this decision
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