Vicarious liability considered by the Supreme Court – have its elastic boundaries been flexed again?

Published 8 April 2020

On 1 April 2020, the Supreme Court handed down its judgments in two important cases on vicarious liability, each case considering one limb of the two-stage test previously considered in Cox v Ministry of Justice and Mohamud v Wm Morrisons Supermarkets.

In Barclays Bank plc v Various Claimants the Court considered whether the relationship between the bank and its contractor was “akin to employment” and in Wm Morrison Supermarkets plc v Various Claimants it considered whether the actions of an employee of the supermarket was sufficiently closely connected with his employment to see it vicariously liable for his actions.

In Barclays the Court considered whether the bank should be liable for sexual assaults alleged to have been committed by a GP as he performed medical examinations on behalf of the bank.  The examinations were mandatory for current employees or part of the conditions of an offer of employment for prospective employees, and, whilst they were performed at the GP’s consulting rooms at his home, were recorded on forms showing the bank’s logo and name and the examinations included questions and tests required by the bank.

Lady Hale, in the lead judgment with which the other Supreme Court Justices agreed, found that, whilst the GP performed work for the bank, he was not an employee of the bank and his relationship with the bank, undertaking work for payment at the bank’s request and having the choice to decline instructions if he so chose, was similar to that of other independent contractors, for, example the bank’s independent auditors.  The GP was in business on his own with his own portfolio of patients and clients, one of which was the bank. 

Whilst the five-stage test set out in Catholic Child Welfare Society v Claimant may be helpful in identifying a relationship which is sufficiently analogous to employment to make it fair, just and reasonable to impose vicarious liability, in this case the GP was clearly carrying on his own business and the bank was not vicariously liable for his actions.  The appeal by Barclays was allowed and the judgment of the Court of Appeal overturned.

In Wm Morrison, the Court considered whether the supermarket should be vicariously liable for an employee’s actions in copying employee payroll data (which he was permitted to access in order to send it to auditors), then uploading that data to a publicly accessible website with the intention of causing damage to the supermarket.  The employee was prosecuted and imprisoned for his actions.

Lord Reed, with whom the other Supreme Court Justices agreed, considered whether there was a close connection between the activities the employee was authorised to do and his wrongful action in copying and uploading the data.  The online disclosure of data was not part of the employee’s duties and was not so closely connected with his duties as to be viewed as an activity within the course of his employment.  The employer was not furthering his employer’s business. Morrison’s appeal was allowed and the judgment of the Court of Appeal was overturned.

Whilst not relevant to the outcome in Wm Morrison, the Court confirmed that it is possible for a business to be vicariously liable for breaches of the Data Protection Act by a data controller employee of the business.

The judgments, whilst not changing the tests applied in vicarious liability cases, indicate that the range of cases in which businesses may be responsible for the actions of employees or contractors continues to have boundaries.

Our specialist liability team deals with cases like this on a regular basis. For more information or advice, please contact one of our experts.