Vicarious Liability Is on the Move…
March 11, 2016
Cox v Ministry of Justice Mohamud v WM Morrison Supermarkets Plc Supreme Court 2 March 2016
As the opening sentence of Lord Reed’s judgment in Cox says, “vicarious liability is on the move” and the conjoined appeals of Cox v Ministry of Justice and Mohamud v WM Morrison Supermarkets Plc provided the UK Supreme Court with “an opportunity to take stock of where it has gone so far”.
Recent years have seen the courts extend the scope of the doctrine of vicarious liability and these appeals presented the UK’s highest court with an opportunity to either rein it in, or allow its further expansion and, crucially, outside the arena of child abuse claims. The growing theme in recent years has seen a loosening of the criteria such that it is easier for claimants to pursue cases against those more likely to have the financial means to pay compensation.
The Supreme Court has continued that onward trajectory deciding that the defendants in both cases were vicariously liable for the personal injuries suffered by the two claimants. Paul Donnelly and Andrew Cousins look at the development of the doctrine of vicarious liability and where these judgments take us.
Vicarious liability is the doctrine through which a person or organisation can be held strictly liable for tortious acts or omissions committed by others i.e. without a breach of any duty of care owed by, or fault on the part of, that person or organisation. The doctrine’s roots can be traced back to the Middle Ages but, as a legal principle, came to the fore in the Victorian era when the industrial society was developing. A useful explanation of the purpose of the doctrine can be taken from Ward LJ’s judgment in JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust (2012). He noted a growing acceptance that “the existence of the master/servant relationship was itself enough to impose liability on the master if the servant was acting within the scope of his employment” and quoting Lord Brougham in 1839: “The reason I am liable is this, that by employing him I set the whole thing in motion; and what he does, being done for my benefit and under my direction, I am responsible for the consequences of doing it”.
The application of the doctrine involves the synthesis of two stages:
Stage 1: examination of the relationship between the tortfeasor and the defendant.
Historically this has often been simplified to whether or not the relationship is, or is akin to, one of employment but has been broadened in recent years, for example by the Supreme Court inVarious Claimants v Catholic Child Welfare Society (2012) ("the Christian Brothers case") and the Court of Appeal in JGE where it was found that a diocese could be vicariously liable for abuse by a priest despite there being no contract, terms, conditions, wages, or right of dismissal except through the Church in Rome: the diocese had argued that they effectively had no control over a priest once appointed.
Stage 2: examination of the connection between the act/omission complained of and the relationship set out in stage 1.
This has often been expressed in the following terms: “The wrongful conduct must be so closely connected with the acts the… employee was authorised to do that, for the purpose of the liability of the… employer to third parties, the wrongful conduct may fairly and properly be regarded as done… in the ordinary course of… the employee’s employment” per Lord Nicholls in Dubai Aluminium Co Limited v Salaam (2002). Defendants would seek to reject claims on the grounds that the tortfeasor was “on a frolic of his own” although the effectiveness of such a defence has been reduced in recent years with the courts placing particular emphasis on the creation of risk or its material increase (see the Court of Appeal in Maga v The Trustees of the Birmingham Archdiocese of the Roman Catholic Church (2010) and the Supreme Court in the Christian Brothers case).
The conjoined appeals in Cox and Mohamud presented the Supreme Court with an opportunity to fully reconsider both tests: stage 1 (and in part stage 2) in Cox and stage 2 in Mohamud. This was also the Supreme Court’s first opportunity to reconsider the doctrine as a whole since the Christian Brothers case which in the words of Lord Phillipswas “not a borderline case” in the sense that “there was a very close connection between the brother teachers’ employment in the school and the sexual abuse that they committed”. Therefore, with Cox and Mohamud the court had the perfect opportunity to better shape the doctrine in situations outside the arena of abuse claims and, crucially, in circumstances where the outcome (and hence effects of the decision) was perhaps more uncertain. The judgments reached are therefore of more widespread application.
Facts and lower court findings
Cox v Ministry of Justice
In the case of Cox, the claimant was working as the catering manager at HM Prison Swansea when she was injured in an accident caused by the negligence of a prisoner working under her supervision. The prisoner was carrying out paid work as a means of penal policy rather than voluntary or commercial enterprise.
On the day in question, when a delivery of supplies for the kitchen arrived, the claimant went to attend to the delivery, taking with her six prisoners who were to bring the delivered food supplies from the ground floor to the first floor.
These foodstuffs were contained in large sacks weighing about 25 kg. One prisoner began to transport three bags at one go and having ignored an instruction from the claimant to stop as the load was too great, he dropped one of the sacks which burst open causing a spillage. Whilst the claimant instructed all of the prisoners to stop work until the spillage was cleared, one prisoner continued to carry two remaining bags. He lost his balance, hit his head and dropped one of the sacks onto the claimant's back. The judge found that the accident occurred because of the prisoner’s negligence but that the defendant was not vicariously liable. The Court of Appeal overturned that decision and the MoJ appealed.
Mohamud v WM Morrison Supermarkets Plc
In the case of Mohamud, the claimant was a visitor to the defendant’s petrol station. He entered the kiosk and asked the defendant’s employee, Mr Khan, for facilities to print some documents. Mr Khan verbally abused the claimant, then followed him out of the kiosk and physically assaulted him.
The first instance judge described the attack as “brutal and unprovoked” but found that the defendant was not vicariously liable for the actions of Mr Khan and dismissed the claim. The claimant appealed to the Court of Appeal and his appeal was dismissed. The basis of the rejection was perhaps best articulated by Treacy LJ who stated:
…our law is not yet at a stage where the mere fact of contact between a sales assistant and a customer, which is plainly authorised by an employer, is of itself sufficient to fix the employer with vicarious liability.
Christopher Clarke LJ agreed, stating that whilst there could be strong grounds for saying that it was fair, just and reasonable to require Morrisons to compensate the claimant, the legal test required the claimant to prove that it was fair and just to hold the employer liable by reason of the relationship between the employment and the assault. The fact that the employment required an element of interaction with the public was not sufficient.
Supreme Court findings
Stage 1 of the test - Cox
In the Cox appeal the MoJ accepted that the prisoner had been negligent and so the issue before the Supreme Court was whether the relationship between the Prison Service (the MoJ) and the prisoner was sufficient to satisfy stage 1. Was it akin to employment? As discussed above, the synthesis between the two stages also required consideration of the tort itself (and therefore the case does also consider stage 2).
Lord Reed acknowledged the five criteria, set out in the Christian Brothers case, which would“usually make it fair, just and reasonable to impose vicarious liability” in situations other than an employer/employee relationship. However, he was not prepared to attribute equal significance to each of them, instead, focusing on the following three inter-related factors:
The tort was committed as a result of activity being undertaken by the tortfeasor on behalf of the defendant;
The tortfeasor’s activity was part of the business activity of the defendant; and
The defendant, by employing the tortfeasor to carry on the activity, created the risk of the tort committed by the tortfeasor.
In the Cox case, whilst the prisoners received only ?11.55 a week, they were paid, a risk had been created by having the prisoners move the bags of rice manually, and this task which was undertaken on behalf of the defendant was an integral part of the activities it carried out, irrespective of whether they were part of a public service or a commercial enterprise.
Stage 2 of the test - Mohamud
In the Mohamud appeal, the court considered two factors were highly relevant:
The function or field of activities that had been entrusted by the defendant (employer) to the tortfeasor (employee), i.e. what was the nature of his job? This is to be viewed broadly;
Whether there was a sufficient connection between the position in which he was ‘employed’ and his wrongful conduct to make it right for the employer to be held liable.
Here, there was an unbroken sequence of events between the verbal abuse in the kiosk which was“inexcusable but within the ‘field of activities’ assigned to him” and the physical violence. The employee could not, metaphorically speaking, take off his uniform at the moment he stepped out from behind the counter of the petrol station. The action of threatening the claimant was made through a warning to keep away from the employer’s business premises and was thus made in connection with the business.
Whilst they are separate judgments, the cases cumulatively assess both limbs of the vicarious liability test. In each case the decision expands the application of the doctrine but does not change the individual components required for the doctrine to be invoked. As Lord Reed commented, the cases represent an overview of where the doctrine has moved to and they provide examples, outside the arena of abuse claims, of how the recent expansion operates in a different factual context.
The decision of the Supreme Court in the Christian Brothers case had already firmly extended the scope of the relationship necessary to satisfy stage 1 of the test, as indeed had the earlier Court of Appeal decision in JGE. In keeping with those decisions, in Cox, the Supreme Court said that the defendant did not have to carry on commercial activities, nor derive a profit from the tortfeasor's activities. It was sufficient that the defendant was, through the tortfeasor, carrying on activities in furtherance of its own interests. Defendants can no longer avoid liability by technical arguments about the employment status of the tortfeasor. This is seemingly an endorsement of Lord Phillips’ comment in the Christian Brothers case that “Provided that a [tortfeasor] was acting for the common purpose of the [defendant] as an unincorporated association, the relationship between them would be sufficient to satisfy stage 1…”
The courts have, for quite some time, had difficulty clearly defining when an act falls “within the authority” of the employee. For those who are interested, the judgment of Lord Toulson inMohamud contains a fascinating trawl through legal history starting in the reign of Henry IV and charting the development of vicarious liability. Of course, the current state of the law still stems from a need to have a one size fits all criteria which allows the innocent injured party a cause of action against a party who at some level it is fair, just and reasonable to pursue, despite the fact that he is not in fact the party at fault. This has necessitated artificial interpretation of certain phrases and perhaps now more than ever the words of Lord Clyde in Lister v Hesley Hall (2001) ring true:
An act of deliberate wrongdoing may not sit easily as a wrongful mode of doing an authorised act but recognition should be given to the critical element in this observation, namely the necessary connection between the act and the employment.
It is precisely the lack of that connection which concerned the Court of Appeal in Mohamud. In the Supreme Court Lord Toulson noted that the tortfeasor was motivated by “personal racism rather than a desire to benefit his employer’s business”. Whilst it may be thought that a personal motivation breaks the seamless link and takes the employee’s actions outside of the remit of vicarious liability, the Supreme Court held that such motivation is irrelevant. This more flexible interpretation may lead to more claims which try to further extend the scope of the required connection.
Insurers will quite rightly be concerned that the test is seemingly moving towards the employee’s remit of employment being read to such an extent that almost any action he takes during the employer’s time may satisfy the test. The court was quick to try to quash any suggestion that this would lead to an opening of the floodgates noting that no evidence of this was before the court. However, the Mohamud case does appear to bridge the gap and could be seen in part to dilute the requirement for any physical assault to arise out of the tortfeasor’s employment duties involving an obvious element of keeping control and order (as in the ‘nightclub bouncer’ run of cases, Mattis v Pollock (2003) et al). It will be interesting to see how far outside of the physical assault arena this extension may be allowed to stray.
Cases in this arena can often be considered to be from “deserving claimants”, so that there is seen to be reason for the common law to develop so as to provide a remedy to them, as indeed has been the result of these Supreme Court judgments. Had it not been for the ability to recover from the defendants before the court, both claimants are likely to have gone uncompensated.