Employees and others behaving badly – when are you liable for their misdeeds? Solicitor Mark Clinton reports.

Above: Mark Clinton is a partner at Thomas Eggar, recently merged with Irwin Mitchell LLP

Vicarious liability is the term used to describe a situation where someone is held responsible for the actions or omissions of another person. The Supreme Court handed down two complementary judgments in March that respectively address the two main questions that determine when this type of liability might arise.

The first question, addressed by the Supreme Court in Cox v Ministry of Justice, relates to the nature of the relationship between the wrongdoer and the person who is vicariously liable for his wrongdoing. It is generally understood that an employer may be liable for the acts or omissions of his employees.  However, vicarious liability can arise even where there is no employment contract.  How then does one identify when a relationship can give rise to vicarious liability? 

The second question, addressed by the Supreme Court on the same day in Mohamed v WM Morrison Supermarkets plc, relates to the nature of the wrongful act. Where the relationship is one which gives rise to vicarious liability, it is also relatively well understood that the liability does not arise in respect of every conceivable act or omission of the wrongdoer. However, where does the law draw the line?  The result in that case may have come as a surprise to some.

Briefly the facts in Cox v Ministry of Justice were as follows. Mrs Cox was injured while working in the kitchens in Swansea Prison when a prisoner accidentally but negligently dropped a sack of rice on her back. She sued the Ministry of Justice for compensation. The court at first instance found that there was no vicarious liability because the relationship between the prisoner and the Ministry of Justice was not akin to that between an employer and an employee. The Court of Appeal overturned this decision and, on further appeal, the Supreme Court agreed that vicarious liability may extend beyond the traditional employer/employee relationship. In this case, the Ministry of Justice was vicariously liable.

The court said: “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 business activities carried on by a defendant and for its benefit (rather than his activities being entirely attributable to the conduct of a recognisably independent business of his own or a third party.”

In reaching its conclusion, the Supreme Court recognised that workers may be part of the workforce of an organisation even though they are not employees of that organisation. This can arise, for example, where agency staff are used or where one organisation borrows a worker from another organisation (thus relevance for construction here). In this case, by assigning activities to the prisoner, the Ministry of Justice had created the risk of a tort being committed, and it made no difference that it had a statutory duty to provide this work to the prisoner.

In the Morrisons case (discussed below) it was said that the development of the law as to the type of relationships that give rise to vicarious liability is ‘A response to changes in the legal relationships between enterprises and members of their workforces and the increasing complexity and sophistication of the organisation of enterprises in the modern world’. It is certainly true that there have been tremendous changes in how enterprises are organised and it would be well worth considering where vicarious liability might arise in your organisation and whether the insurances you have in place will cover you in all such instances.

The rather shocking facts in Mohamed v WM Morrison Supermarkets plc were as follows. Mr Mohamed went into the kiosk at a petrol station owned by Morrison Supermarkets and enquired as to whether some documents on a USB stick could be printed there.  He received a curt and rude response to the effect that they could not.  He objected to the way he had been spoken to and was ordered to leave.  He returned to his car and was followed by the employee who proceeded to assault him violently.

The question for the court was how one defines the boundary between actions for which an employer is vicariously liable and those for which he cannot be held liable.  The Supreme Court held that there are two matters to be considered. The first is what functions or field of activities have been entrusted by the employer to the employee, in other words, ‘what was the nature of his job?’. This question is to be addressed broadly. It is then necessary to decide whether there is a sufficiently close connection between the wrongful conduct and the nature of the employee’s job to make it right for the employer to be held liable under the principle of social justice.

In this case, the employee’s job was to attend to customers and respond to their queries.  Was there a sufficiently close connection between those duties and what happened on the forecourt?

The short answer is ‘yes’. Inside the kiosk he was carrying out those duties, although not in a way his employer would have wanted. It was within the field of activities assigned to him. There was then an unbroken sequence of events ending with the assault. Notwithstanding the fact that the employee left the kiosk, followed the customer contrary to express instructions and then acted in a way that the employer would obviously not condone, the employer was liable.

Aside from defining clearly the extent of workers’ roles, it is difficult to see what employers can do to reduce the risk of liability where employees discharge their duties negligently or otherwise in a manner which might give rise to liability. It is perhaps just one of the hazards of employing people.

About the author: Mark Clinton is a partner at Thomas Eggar, recently merged with Irwin Mitchell LLP