The concept of vicarious liability means that if an employee injures someone in the course of their employment, that injured person may sue the employer for damages, i.e. recovering compensation for death or injury caused by alleged breaches of health and safety. Therefore, an employer can be liable for a civil wrong committed by an employee during the course of his or her employment. This happens given the relatively limited financial resources of most employees compared with their employer, who will have proper insurance cover.
In the recent case of Cox v Ministry of Justice (2016), the Supreme Court has restated and expanded the principles that apply to the concept of vicarious liability. This case did not directly involve an employment relationship, but the general principles laid down by the Supreme Court are clearly applicable to employer and employee.
The Facts of the Case
The facts were that Mrs Cox was employed by the Ministry of Justice (MOJ) as the Catering Manager at Swansea Prison. She was responsible for all aspects of catering, including the operation of the prison kitchen. She supervised prisoners who worked in the kitchen, alongside civilian staff. She told some prisoners to take supplies to the kitchen stores. A prisoner accidentally dropped a sack of rice onto her back, injuring her. She brought a claim against the MOJ.
At first instance, the claim was dismissed on the basis that the prison service was not liable because the relationship between the prison service and the prisoner was not that of employer and employee. The Court of Appeal reversed that decision.
The Final Ruling
The Supreme Court upheld the Court of Appeal’s decision and stated there were five factors which made it fair, just and reasonable to impose vicarious liability on a defendant, where the defendant and the person guilty of the tort (the wrong) were not bound by a contract of employment.
- The first factor is that the defendant is more likely to have the means to compensate the victim, and can be expected to have insured against the possibility of vicarious liability.
- The factor that the wrongdoer will have been under the control of the defendant, no longer has the significance it used to have. In modern life, it is not realistic to look for a right to direct how an employee should perform his or her duties as a necessary element in the employment relationship.
- The other three factors are: the tort (the wrong) was committed as a result of activity being taken by the wrongdoer on behalf of the defendant; the wrongdoer’s activity is likely to be part of the business activity of the defendant; and the defendant will have created the risk of the tort.
- In considering each of the requirements, it was held that prisoners were integrated into the operation of the prison, so that that the activities assigned to them formed an integral part of the activities which the prison carries on in the furtherance of its aims, i.e. in providing meals to its prisoners. Prisoners were placed in a position where there was a risk of them committing a variety of negligent acts, and the work was done under the direction of prison staff. The five requirements were met, and so the prison service was vicariously liable to the claimant.
- A relationship other than one of employment is, in principle, capable of giving rise to vicarious liability where harm is wrongfully done by an individual who carries on activities as an integral part of the defendant’s business, and for its benefit and, where the commission of the wrongful act is a risk created by the defendant by assigning those activities to that individual.
- The defendant need not be carrying on activities of a commercial nature. The benefit which it derives from the wrongdoer’s activities need not take the form of a profit. It is sufficient that there is a defendant carrying on activities in the furtherance of its own interests.
- Defendants cannot avoid vicarious liability on the basis of arguments about the employment status of the wrongdoer.
- The prison service places these prisoners in a position where there is a risk that they may commit a variety of negligent acts, which is recognised by the provision of health and safety training. Mrs Cox was injured as a result of negligence in carrying on activities assigned to him, and the prison service was, therefore, vicariously liable.
- Lord Reed was particularly impressed by the desire to protect members of today’s workforce who do not have a contract of employment but are, in practice, working for others. So, defendants who have got around actually employing staff will not be able to shield themselves from vicarious liability based upon technicalities. If the reality is that the worker is working on the defendant’s behalf, and for the defendant’s benefit, vicarious liability will follow. Therefore, organisations engaging people on contracts which are not employment contracts should now beware!
The Basic Principles
The Cox case further developed the principles stated by the Court of Appeal in the key case of Majrowski v Guy’s and St Thomas’s NHS Trust (2005), which was about harassment by a Manager. The Court of Appeal found that the employer was liable, and made the following points.
- Vicarious liability is a legal responsibility imposed on an employer, although the employer is free from blame, for a civil wrong committed by an employee in the course of his or her employment.
- True vicarious liability is liability for an employee’s unauthorised, or not negligently permitted, unlawful mode of doing an unauthorised act in the course of employment.
- For such liability to apply, the act must be so closely connected with what the employee was authorised to do, that it would be fair and just to regard it as a mode, even of an improper one, of doing it.
- In deciding whether the connection is sufficiently close, the Court has to balance the social interest in furnishing an innocent victim with a remedy against a financially responsible defendant, with the need to avoid foisting an undue burden on a business enterprise.
- An employer cannot avoid vicarious liability by showing that the employee was guilty of intentional wrongdoing, or that the act was criminal, or that the employee was acting contrary to express instructions, or that his or her conduct was the very negation of the employer’s duty.
Implications
This means that an organisation can now potentially be held vicariously liable for the actions of not only its employees, but also to all types of workers, unless they are truly independent contractors, whose activities are entirely attributable to a recognisably independent business of their own. It may also cover volunteers. It is apparent that short shrift will be given by the Courts to technical arguments about the employment status of the wrongdoer.
The judgment also confirms that the doctrine is not limited to defendants carrying on activities of a commercial nature; it is sufficient that there is a defendant which is carrying on activities in the furtherance of its own interests, which do not have to be economic. Such interests could be charitable, or the interests of a religious institution. Or, they could be the interests of complying with a statutory duty in the case of a public authority or hospital.
The Supreme Court recognised that extensions to the vicarious liability doctrine are necessary to maintain protection for victims. It may not be welcomed by employers, but it is a welcome development for innocent injured parties, who should not be left at the mercy of arbitrary distinctions between different categories of worker, when a defendant has created the risk of their injury.
Practical Steps:
Many employers struggle with the fairness of vicarious liability, but it is well established, so all that good employers can do is to work hard at maintaining a healthy and safe working environment. So:
- Undertake good quality training, not only for employees, but for a wider group of workers for whose actions the organisation might be vicariously liable.
- Deliver robust disciplinary sanctions for employees and workers who depart from expected standards of conduct and competence.
- Conduct rigorous background checks, without contravening your policy/the law on the rehabilitation of offenders.
- Consider revising your policy documents on interfacing with the public/ customers/stakeholders etc., stressing the need for safe working and considerate conduct.
- Think about how to impart good practice standards to your general workforce – not only those with conventional employment contracts, but agency staff, contractors, work placement schemes and volunteers etc.
- Ensure that genuinely self-employed contractors have appropriate third party insurance.
- The key is to ensure that only trained personnel undertake any activity that could be dangerous to the health and safety of others.
Our Consultants would be pleased to advise you on any element of the issues arising from this newsletter.
