Vicarious liability – how far does an employer’s responsibility go?

The Supreme Court has recently decided upon two vicarious liability cases, each dealing with different aspects of the vicarious liability test. It is important that employers and HR professionals are aware of the risks of vicarious liability, as the courts apply the principle broadly and it is not just reserved for traditional employment relationships. Joanne Payne from Hempsons explains.
 
What is vicarious liability?
Under the doctrine of vicarious liability an employer can be held liable for the tortious actions (such as personal injury claims) of its employees where there is a connection between the employment and the wrongdoing; it doesn’t matter if the employer is not itself at fault. In cases of discrimination and whistleblowing detriment, an employer may be able to rely upon a ‘reasonable steps defence’ i.e. the employer took all reasonable steps to prevent the wrongdoing, as a means of alleviating its liability, but this defence is not available for other tortious actions.
In more recent cases, this principle has been extended to cover other types of working relationships though it usually arises where an employment relationship exists.
 
When determining whether the principle of vicarious liability can be applied there is a two-stage test to be applied (both stages of the test must be satisfied):
1. Is there a relationship between the wrongdoer and the organisation which is capable of giving rise to vicarious liability?
The Supreme Court assessed this part of the test in the case of Cox v Ministry of Justice [2016] UKSC 10. This was a personal injury claim brought by a manager of a prison kitchen, who had suffered a back injury when a prisoner working in the kitchen had negligently dropped a bag of rice onto her back. The Ministry of Justice (‘MoJ’) argued that the work undertaken by the prisoner did not give rise to an employment relationship as working for the prison was mandatory. The MoJ argued that it was would not be just to impose an employment relationship.
The Supreme Court disagreed with the MoJ and, applying a recent case involving liability for the abuse by catholic priests, it was found that vicarious liability can arise outside of the typical employment relationship where an individual undertakes work for the benefit of the business. It noted that the prison was able to control the allocation of duties and the work undertaken. Further the Supreme Court found that because the prisoner was compelled to undertake the work, this strengthened the case for imposing vicarious liability. The prison was therefore liable for the actions of the prisoner in this personal injury case.
 
2. Is the employment sufficiently connected with the wrongful act/omission?
This point was assessed by the Supreme Court in the case of Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11. This was another personal injury case arising from a physical assault by an employee of Morrisons against a customer at a petrol station. The employee left his kiosk within the petrol station after a verbal altercation with a customer. The employee then physically attacked the customer near the customer’s car. Morrisons argued that they should not be vicariously liable for the actions of the employee because his actions were outside the scope of his duties as his duties did not include confrontations with customers and that he had metaphorically taken off his uniform when he stepped out from behind the kiosk.
The Supreme Court rejected the points raised by Morrisons and found that it was the employee’s role to attend to customers and respond to their inquiries. The employee had been responding to the customer’s enquiry when he had entered the petrol station and the attack following on from this was part of that chain of events; the employee had been warning the customer not to return to the petrol station. It appeared to the Supreme Court that the employee was purporting to act about his employer’s business i.e. the attack did not arise out of a personal matter between the individuals. There was a sufficient connection between the employment relationship and the assault. Morrisons were found to be vicariously liable.
 
Summary
These cases demonstrate that the courts will adopt a broad approach to the question of vicarious liability. Vicarious liability can arise outside of the traditional employment relationship and organisations will need to be mindful of this. The Courts are able to treat other workers as ‘deemed’ or ‘virtual’ employees for the purposes of vicarious liability.
To mitigate against these risks, HR professionals should ensure that managers and employers are trained on and aware of the policies and procedures which relate to their role. In cases of discrimination/whistleblowing detriment, training and staff awareness of equality and diversity policies (and other relevant policies) is important when pleading a ‘reasonable steps’ defence. Contractors and other ‘non employees’ should also be made aware of their expected conduct if they are undertaking the business of the organisation. Further to this, organisations should take swift action in accordance with policy where complaints are raised.
 
 
Joanne Payne, Solicitor, Hempsons | Employment North