The Supreme Court has recently handed down two judgements in which they consider the application of vicarious liability, which is the concept by which a third party becomes liable for another person’s wrongdoing. As a department, we take a keen interest in the area of vicarious liability because in time, we would like to see it become easier for institutions and organisations to be held responsible for child abuse carried out by independent contractors. We have campaigned for vicarious liability to be extended for some time, which we feel would more accurately reflect the central role that organisations should have in safeguarding children.
In Barclays Bank plc v Various Claimants  UKSC 13 (01 April 2020) the Court was asked to consider the relationship between the wrongdoer and the Defendant. The facts of this case were that over 100 women who had been employed by Barclays Bank (“the Bank”) between the 1960’s to 1980’s said that they had been sexually abused by a doctor who they had been told to see as part of a medical examination prior to being offered a job. The Bank had a large recruitment strategy in place and through this thousands of teenage women were required to see Dr Bates at his home for the examination. He had converted a room at his house into a consultation room and it was here that the women say that he sexually assaulted them.
The Courts that had heard the case before the appeal to the Supreme Court had decided that the Bank was liable to pay compensation to the women on the basis that the relationship between Dr Bates and the Bank was sufficiently close to an employment relationship that it was right to hold the bank liable. The Court of Appeal also noted that the pro forma supplied by the Bank included a requirement for expanded and deflated chest measurements, as well as specifying the time, place and examiner. It was also the case that at least some of the examinations included inspection of the women’s genitalia. The Supreme Court however reached a different conclusion and allowed the appeal, saying that the Bank could not be liable for the actions of Dr Bates. The Court said that Dr Bates was an independent contractor and that it has never been the case that a third party can be liable for the wrongdoing of an independent contractor. Dr Bates had a wide and varied practice as a doctor and the medical examinations he did for the Bank were just a part of this. He was not paid a salary by the bank (although he was paid a fee for each report) and he was free to reject the work that was offered to him. While it was true that he was performing a task that was of benefit to the Bank, the primary financial benefit was to himself as an independent contractor. It was for these reasons that the appeal succeeded and as such the Bank was not required to pay compensation to any of their former employees.
Questions do of course remain about why the Bank felt the need to fight these cases to the extent they did. Some might think that they would have had some sympathy with young women who they sent to have a medical examination being sexually assaulted, particularly since many of the women went on to have long and loyal careers with the Bank. Furthermore, Barclays could have settled all of these cases for the amount they pay just a few bankers in annual bonus’. The case acts as a stark reminder that despite the warm words often expressed by the UK insurance industry, they remain as combative as ever and willing to pursue technical legal points to defeat deserving victims of sexual abuse. It is a shame that the Supreme Court allowed this appeal, because it emboldens such tactics and, in this case, it failed to protect the rights of the women to obtain justice.
In WM Morrison Supermarkets plc v Various Claimants  UKSC 12 (01 April 2020) the Supreme Court was asked to consider the extent to which an employer can be liable for the wrongdoing of its employee. In this case an auditor who worked for Morrisons had a grudge against them and as payback for this decided to release personal data of every single employee (over 100,000) of Morrisons. He posted the data online and sent it to national newspapers, although they did not publish it. In addition he set up an elaborate plan to frame a colleague of his. A police investigation followed and the employee received an 8 year custodial sentence. The question in this case was whether or not Morrisons was to be held liable for the actions of its employee, The Court of Appeal concluded that they were liable and the matter was appealed to the Supreme Court. The claim was brought by nearly 10,000 employees who said that the publication of their private and confidential information had caused them anxiety, distress and anger. A careful analysis of the case law on vicarious liability and the conduct which could give rise to liability was carried out by the Supreme Court.
The Court said in its very first paragraph that there had been a misunderstanding of the Judgement in the case of Mohamud v WM Morrison Supermarkets plc  UKSC 11. It was said that the Mohamud case had not extended the law of vicarious liability and that the Courts below had taken some aspects of the Judgement out of context. What followed was a thorough examination of what is meant by the term ‘field of activities’ and whether the wrong that happened was ‘closely connected’ to the work that the employee had been authorised to do. In conclusion the Supreme Court held that the release of the personal data was not an act that he had been authorised to do, and it did not form part of his field of activities. The central question to be asked was whether the ‘disclosure of the data was so closely connected with acts he was authorised to do that, for the purposes of the liability of his employer to third parties, his wrongful disclosure may fairly and properly be regarded as done by him while acting in the ordinary course of his employment.’
I suspect that most people will find it hard, legally, to understand how it is that an employer is responsible for a racist assault committed by one of its employers (as per Mohamud), but is not responsible for a serious data breach. Both, after all, were serious criminal offences. Perhaps the answer lies less in legal principles and has more to do with the impact on the victim. In the Mohamud case the victim was subjected to a very serious racist assault, causing serious injury. In comparison those victims who had their data published were not physically harmed, some of them in fact had no knowledge that their data had been published until told by others. No financial harm was caused and the data remained online for a matter of hours. Despite a serious data offence having been committed many people would question why Morrisons should have to pay compensation to thousands of employees when it had gone to extraordinary lengths in the aftermath to try and protect them.
Switalskis help survivors of sexual abuse in a wide range of circumstances to claim compensation from various organisations. Having considered the Judgements in detail we do not think that the Judgements of the Supreme Court above will have a significant impact on our ability to help our clients obtain the justice and recognition they deserve and we will continue to push for vicarious liability to be extended and do our very best for our clients.
Please note that the cases referred to relate to independent contractors. As the law stands, in many circumstances, employers are liable for the acts of their employees. It is therefore always worth enquiring as to whether we are able to help you.