Vicarious Liability: whose liability is it anyway?

Amanda Savage QC and Nicholas Broomfield |

On 1 April 2020 the Supreme Court handed down judgment in Barclays Bank plc v Various Claimants [2020] UKSC 13 (“Barclays”) and MW Morrison Supermarkets plc v Various Claimants [2020] UKSC 12 (“Morrison”) – the latest in the recent line of cases focussed on the nature, scope and development of the doctrine of vicarious liability.

The Courts have been keen to emphasise that the law of vicarious liability is “on the move”.[1] This is not in itself a surprise, as judges and academics have regularly remarked upon the need for vicarious liability to reflect employment and business practices as they evolve and develop. The need for the law to reflect reality has resulted in the expansion of the doctrine of vicarious liability, most notably beyond its traditional limits of employer and employee to those in a relationship “akin to employment”.

Notwithstanding the significant attention that the doctrine has received, the broad test for imposing vicarious liability remains well settled. In short, there are two elements that have to be shown before a person (or organisation) can be made vicariously liable for the actions of another:

  1. First, there must be a relationship between the two persons which makes it fair, just and reasonable for the law to make one pay for the wrongs committed by another. This has traditionally been limited to the relationship between employer and employee, but the scope and nature of those relationships has expanded over time (“Limb 1”);
  2. Second, there must be a close connection between that relationship and the tortfeasor’s wrongdoing. Historically, this was limited to torts committed in the course of the tortfeasor’s employment, but this has also been broadened (“Limb 2”).

However, whilst there has been consensus about the two limbs of the test, the cases have not spoken with one voice about the precise approach, or criteria, that the Court should adopt when deciding whether to impose vicarious liability. The Supreme Court’s most recent decisions helpfully address both limbs of the test:

  1. In Barclays the Supreme Court was concerned with Limb 1 and the nature of the relationship that gives rise to vicarious liability. The Supreme Court took the opportunity to explain its earlier decisions on Limb 1, including Various Claimants v Catholic Child Welfare Society [2013] AC 1 (“Christian Brothers”), Cox v Ministry of Justice [2016] AC 660 and Armes v Nottinghamshire County Council [2018] AC 355, and addressed the position of independent contractors following the developments in the law.
  2. In Morrison Supermarkets the Supreme Court was concerned with Limb 2 and the “close connection” test. It sought to clarify its earlier decision in Mohamud v WM Morrison Supermarket plc [2016] AC 677 in order to correct what it considered to be misunderstandings that had followed it.

In a detailed article here Amanda Savage QC and Nick Broomfield consider how modern developments in the law of vicarious liability have affected Limb 1 when applied to persons outside of the employer/employee relationship and Limb 2 more generally, before discussing the effect of the Supreme Court’s judgments in Barclays and Morrison Supermarkets.

The article explores the development and expansion of the doctrine and considers the extent to which the recent Supreme Court decisions have answered the problems or questions posed by previous cases, and what questions may remain.

In relation to Barclays and Limb 1, Amanda and Nick discuss:

  1. The adoption of the “akin to employment” test in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] QB 510 and Christian Brothers.
  2. The uncertainty about the test to be applied following Cox and Armes.
  3. The scope of what is (arguably) a new test proposed in Barclays, including (a) the extent to which this pulls together the strands of existing case law to form a single, universally applicable test; (b) whether this solves the inconsistencies between Christian Brothers and Cox.
  4. The problems that may remain following Barclays, in particular the absence of defined criteria to be applied when asking if a tortfeasor is in a relationship “akin to employment.

Amanda and Nick then turn to Morrison and Limb 2 and consider:

  1. The “close connection” test elucidated by the House of Lords in Lister v Hesley Hall Ltd [2002] 1 AC 215 and further considered in Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366.
  2. The need for a “strong causative connection” and “enterprise risk” or “creation of risk” as relevant criterion following Christian Brothers and the cases discussed therein
  3. The apparent confusion caused by Mohamud v WM Morrison Supermarket plc, in particular whether (a) there was a temporal element to the “close connection” test, or (b) “creation of risk” was (or remained) relevant to the “close connection” test at all
  4. The scope of Morrison, and the dispelling of any suggestion that there needs to be a temporal or strong causative link between wrongdoer’s employment and their wrongdoing in order to satisfy the “close connection” test. T
  5. The uncertainties that remain, including whether “creation of risk” remains relevant to the Courts’ decision making, particularly in non-abuse cases.

[1] Various Claimants v Catholic Child Welfare Society [2013] AC 1 (“Christian Brothers”), per Lord Phillips at paragraph 19.

download the full article on Vicarious Liability here