On 2 March 2016 the Supreme Court handed down judgment in two important cases concerning the scope of vicarious liability: Cox v Ministry of Justice [2016] UKSC 10 and Mr Mohamud v WM Morrison Supermarkets plc, [2016] UKSC 11. The first case concerns negligent injury caused by a prisoner working in a prison kitchen, while the second concerns an employee’s violent attack on a customer in a petrol station.

In these judgements the Supreme Court has reinforced the central importance of imposing vicarious liability where it is fair and reasonable to do so, even where other parts of the legal test are being stretched. It confirms that vicarious liability can be imposed in a wide range of relationships (not just employment) and a broad approach should be taken when applying the ‘close connection’ test.

Vicarious liability

The principle of vicarious liability most commonly arises in the employment relationship. The employer is held liable for the wrongs committed by its employee provided that there is a strong connection with the employment. It is a common law principle of strict liability which means it is not necessary to establish any fault on the part of the employer. Lord Nicholls explained the principle in Majrowski v Guy’s and St Thomas NHS Trust [2006] UKHL 34 stating:

‘…all forms of economic activity carry a risk of harm to others, and fairness requires that those responsible for such activities should be liable to persons suffering loss from wrongs committed in the conduct of the enterprise. This is “fair”, because it means injured persons can look for recompense to a source better placed financially than individual wrongdoing employees.’

Two aspects: relationship and conduct

In Lord Reed’s judgment in Cox v Ministry of Justice he makes the important point at the outset that the scope of various liability depends on the answer to two key questions. First, what relationship is required between the individual and the defendant? And second, in what way does the individual’s wrongful conduct need to be related to that relationship?  Conveniently, the case of Cox concerns the first question while Mohamud concerns the second.

Cox: nature of the relationship

In Cox the claimant wished to pursue a personal injury claim against the MoJ after a prisoner in the prison where she was working negligently dropped a heavy bag of rice on her back. The Claimant was the catering manager at HM Prison Swansea and the prisoner was working in the kitchen under her supervision. The prisoner was not employed by the MoJ so there was no presumption that vicarious liability could be established. The question was whether the particular relationship between the prisoner and the MoJ was such that the MoJ could be liable for the prisoner’s negligence.

At the Court of Appeal the claimant succeeded in establishing that the MoJ would be vicariously liable for the negligence of the prisoner because the relationship between the prisoner and the MoJ was sufficiently similar to the employment relationship. The MoJ appealed to the Supreme Court, unsuccessfully. 

In reaching the decision to dismiss the appeal, Lord Reed considered the five criteria for establishing vicarious liability formulated by Lord Phillips in the case of Various Claimants v Catholic Child Welfare Society [2012] UKSC 56, (the Christian Brothers case). He identified the following three of the five criteria as being most significant:

‘… (ii) the tort will have been committed as a result of activity being taken by the employee on behalf of the employer; (iii) the employee’s activity is likely to be part of the business activity of the employer; (iv) the employer, by employing the employee to carry on the activity will have created the risk of the tort committed by the employee…’ (Paragraph 35).

Lord Reed found that these factors (and the ideas underpinning them) had formed a ‘modern theory of vicarious liability’. Vicarious liability could arise in relationships other than the employment relationship where, (a) harm was done by an individual carrying on activities as an integral part of the business activities carried on by a defendant and for its benefit, and (b) where the wrong that had been committed was a risk created by the defendant in assigning those activities to the individual in question (see paragraph 24).

Lord Reed was clear that vicarious liability would not arise where the individual’s activities were entirely attributable to an ‘independent business of his own or of a third party’.

In the present case the Supreme Court was satisfied that the MoJ could be vicariously liable and there was no matter of law or public policy preventing that from being the case. It was significant that the Prison Rules 1999 require convicted prisoners to carry out work authorized by the secretary of state for up to 10 hours per day and at the time of the accident this was precisely what the prisoner who dropped the bag of rice was doing. The relationship between the defendant and the individual was sufficiently similar to an employment relationship.

Considering the fairness and reasonableness of the decision in light of the lack of an employment contract, Lord Reed made the following helpful observation:

‘For the prison service to be liable to compensate a victim of negligence by a member of the prison catering team appears to me to be just and reasonable whether the negligent member of the team is a civilian or a prisoner.’ (Paragraph 43).

Mohamud: nature of the conduct

In Mohamud v WM Morrison Supermarkets the claimant had been the victim of a violent, racist attack in the defendant’s petrol station. After being shouted at by the defendant’s employee the claimant tried to leave the petrol station in his car. The employee followed him out of the kiosk, opened the claimant’s front passenger door and hit him. When the claimant got out of his car to close the door, the employee continued his attack until he was kicking the claimant on the floor.

In this case, the individual responsible for the attack was an employee of the defendant so there was no question that the defendant could be vicariously liable for the individual’s wrongdoing; the classic master-servant relationship was present. Accordingly, the questions in this case concerned the second aspect of vicarious liability identified by Lord Reed about the nature of the conduct itself and its relationship to the employment contract.

The claimant lost his case at the court of first instance and then lost in the Court of Appeal. In both judgments the court relied upon the ‘close connection test’ laid down in Lister v Hesley Hall Ltd [2001] UKHL 22 (the tragic case involving children abused by the warden of a school boarding house). There was not a sufficiently close connection between the tortious conduct of the employee and the nature of his employment to make the employer liable for the damage caused by his actions. The Court of Appeal made its decision having regard to the range of duties assigned to the employee by his employment contract. It found that the employee’s conduct was not sufficiently closely connected to his employment duties and rejected the argument that the conduct should be regarded as a ‘perverse execution’ of those duties.

On appeal to the Supreme Court, the claimant argued among other points that the test for vicarious liability needed re-formulating and improving. Counsel for the claimant proposed a new test for vicarious liability, which Lord Dyson helpfully summarised as: ‘whether the employee (described as an “authorised representative” of the employer) commits the tort in circumstances where the reasonable observer would consider the employee to be acting in that representative capacity’, (paragraph 52). Perhaps unsurprisingly, the Supreme Court rejected this proposal in favour of the existing case law.

Lord Toulson’s judgment contains a detailed review of the history of the relevant common law from the time of the reign of Henry IV in the 14th Century to the present day. It concludes with the case of Lister v Hesley Hall Ltd (and surrounding cases) and the all-important ‘close connection test’.

To simplify the present law Lord Toulson identifies two questions. First, what job (or ‘field of activities’) has the employer or defendant entrusted to the individual? And second, is there sufficient connection between the individual’s job and the wrongful conduct to make the defendant liable under the principle of social justice? Both questions should be approached broadly, and in relation to the second, Lord Toulson makes the point that the closeness of the connection cannot be measured in a clinical way, such as on a scale of 1 to 10, but needs to be assessed in relation to the context of the unlawful conduct as well as the interests of justice.

Lord Toulson went on to state that the test in Lister remained fit for purpose and on the facts of the present case, the test was made out:

‘His [the employee’s] conduct in answering the claimant’s request in a foul-mouthed way and ordering him to leave was inexcusable but within the field of activities assigned to him. What happened thereafter was an unbroken sequence of events. […] It was a gross abuse of his position, but it was in connection with the business in which he was employed to serve customers. His employers entrusted him with that position and it is just that as between them and the claimant, they should be held responsible for their employee’s abuse of it.’ (Paragraph 47).

Lord Toulson said it would not be right to regard the employee as ‘having metaphorically taken off his uniform the moment he stepped from behind the counter’. The sequence of events formed a seamless episode which was closely connected to the employee’s job. The appeal was allowed, the defendant would be vicariously liable.

Implications

These judgments are good news for claimant lawyers because they emphasise the importance of imposing vicarious liability where this would serve the interests of social justice by giving an injured party access to a remedy.

They are not good news for employers and many employers will struggle to accept that the law can hold them liable for damage caused by an individual who commits unlawful acts in the course of their work without their authority.

However, employers are not powerless to do anything. Having rigorous recruitment protocols and regular training to ensure that staff fully understand codes of conduct and work duties should go some distance to reduce the risk of claims like those in Cox and Mohamud from materialising.

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