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A relationship between two parties which is not sufficiently analogous to employment does not make it fair, just and reasonable to impose vicarious liability

MMB Advocates > Uncategorized  > A relationship between two parties which is not sufficiently analogous to employment does not make it fair, just and reasonable to impose vicarious liability

A relationship between two parties which is not sufficiently analogous to employment does not make it fair, just and reasonable to impose vicarious liability


Barclays Bank plc v Various Claimants

[2020] UKSC 13

Supreme Court of the United Kingdom

Lady Hale, Lord Reed, Lord Kerr, Lord Hodge, Lord Lloyd-Jones, SCJJ

April 1, 2020

Reported by Faith Wanjiku

Download the Decision

 

Tort law – vicarious liability – tortfeasor – acts of a tortfeasor – relationship between a tortfeasor and the other party to establish vicarious liability – whether a person who committed a tort was carrying on business on his own account, or was in a relationship akin to employment with the other party for the other party to be held vicariously liable for his actions.

Tort law – vicarious liability – elements of vicarious liability – what elements had to be proved before one person could be made vicariously liable for the torts of another?

Brief facts:

Dr. Bates was a self-employed medical practitioner with a portfolio practice. His work included conducting medical assessments and examinations of prospective Barclays’ (appellant’s) employees. The appellant required job applicants to pass a pre-employment medical examination as part of its recruitment and employment procedures. The appellant arranged the appointments with Dr. Bates and provided him with a pro forma report headed “Barclays Confidential Medical Report”. Dr. Bates was paid a fee for each report; the appellant did not pay him a retainer. If the report was satisfactory, the applicant’s job offer would be confirmed, subject to satisfactory General Certificate of Education examination results.

Dr. Bates conducted the (unchaperoned) medical examinations in a consulting room at his home. It was alleged that Dr. Bates sexually assaulted the 126 claimants in the group action during their medical examinations. After Dr. Bates died in 2009, the claimants sought damages from the appellant.

At trial, it was held that the appellant was vicariously liable for any assaults that Dr. Bates was proved to have perpetrated. The Court of Appeal agreed and dismissed the appellant’s appeal which then appealed to the Supreme Court.

Issues:

i. Whether a person who committed a tort was carrying on business on his own account or was in a relationship akin to employment with the other party for the other party to be held vicariously liable for his actions.

ii. What elements had to be proved before one person could be made vicariously liable for the torts of another?

 

Held:

  1. Two elements had to be shown before one person could be made vicariously liable for the torts committed by another. The first was a relationship between the two persons which made it proper for the law to make the one pay for the fault of the other. Historically, and leaving aside relationships such as agency and partnership, that was limited to the relationship between employer and employee, but that had now been somewhat broadened and was the subject matter of the instant case. The second was the connection between that relationship and the tortfeasor’s wrongdoing. Historically, the tort had to be committed in the course or within the scope of the tortfeasor’s employment, but that too had now been somewhat broadened.
  2. A number of policy reasons usually made it fair, just and reasonable to impose vicarious liability upon an employer for the torts committed by an employee in the course of his employment:

    a) the employer was more likely to have the means to compensate the victim than the employee and could be expected to have insured against that liability;

    b) the tort would have been committed as a result of activity being taken by the employee on behalf of the employer;

    c) the employee’s activity was likely to be part of the business activity of the employer;

    d) the employer, by employing the employee to carry on the activity would have created the risk of the tort committed by the employee;

    e) the employee would, to a greater or lesser degree, have been under the control of the employer.

  3. A relationship other than one of employment was in principle capable of giving rise to vicarious liability where harm was wrongfully done by an individual who carried 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 of a third party), and where the commission of the wrongful act was a risk created by the defendant by assigning those activities to the individual in question.
  4. Vicarious liability, the normative foundation of which rested on the theory that it was fair, just and reasonable to hold a defendant liable for the acts of the tortfeasor on the ground that the tortfeasor was in fact engaged in the defendant’s enterprise, could not possibly be extended to tortious acts committed by an independent contractor, who, by definition, was engaged in his own enterprise. There was simply nothing fair, just and reasonable about imposing secondary liability on a defendant in such a situation.
  5. Although Dr Bates was a part-time employee of the health service, he was not at any time an employee of the appellant nor, viewed objectively, was he anything close to an employee. He did, of course, do work for the appellant. The appellant made the arrangements for the examinations and sent him the forms to fill in. It therefore, chose the questions to which it wanted answers. But the same would be true of many other people who did work for the appellant but were clearly independent contractors, ranging from the company hired to clean its windows to the auditors hired to audit its books. Dr. Bates was not paid a retainer which might have obliged him to accept a certain number of referrals from the appellant. He was paid a fee for each report. He was free to refuse an offered examination should he wish to do so. He no doubts carried his own medical liability insurance, although that could not have covered him from liability for deliberate wrongdoing. He was in business on his own account as a medical practitioner with a portfolio of patients and clients. One of those clients was the appellant.
  6. [Obiter Dicta] “Employment law now recognises two different types of “worker”: (a) those who work under a contract of employment and (b) those who work under a contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual” (Employment Rights Act 1996, section 230(3)). Limb (b) workers enjoy some but by no means all the employment rights enjoyed by limb (a) workers. It would be tempting to say that limb (b) encapsulates the distinction between people whose relationship is akin to employment and true independent contractors: people such as the solicitor in Bates van Winkelhof v Clyde and Co LLP [2014] UKSC 32; [2014] 1 WLR 2047, or the plumber in Pimlico Plumbers Ltd v Smith [2018] UKSC 29; [2018] ICR 1511. Asking that question may be helpful in identifying true independent contractors. But it would be going too far down the road to tidiness for this court to align the common law concept of vicarious liability, developed for one set of reasons, with the statutory concept of “worker”, developed for a quite different set of reasons.”

Appeal allowed.

Relevance to the Kenyan legal system

The law of tort in Kenya is derived from the common law also known as the English law. There have therefore been cases in Kenya echoing the position of the UK case above.

In P. J. Dave Flowers Ltd v David Simiyu Wamalwa [2018] eKLR, the court held that the employer is made vicariously liable for the tort of his employees not because the plaintiff is an invitee, nor because of the authority possessed by the servant, but because it was a case in which the employer, having put matters into motion should be liable if the motion that he had originated lead to damages to another. It also held that that the burden of proving a claim anchored on torts of negligence or breach of statutory duty of care rested on the claimant throughout the trial on absence of probabilities.

In Equator Distributors v Joel Muriu & 3 others [2018] eKLR, it was held that vicarious liability was not pegged on legal ownership (of a vehicle) but on employer/employee or agent/principal relationship with particular emphasis on who employed and controlled the tortfeasor. It was also held that vicarious liability depended not on ownership but on the delegation of tasks or duty.

In Edward Mungai Waweru v Samson Ochieng Kagunda & another [2017] eKLR, the High Court held that the law would permit the recovery of damages by a person for torts committed by another where the relationship between them and the interest of the one in the conduct of the other was such as to render the situation analogous to that of an employee acting in the course and scope of his or her employment … or where in the eye of the law the one was in the position of the owner’s servant.

From the above Kenyan case law, it is thus clear that a relationship between a tortfeasor and the other party has to be sufficiently analogous to employment to make it fair, just and reasonable to impose vicarious liability.





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