Vicarious liability: a difficult day for defendants

Supreme Court finds Defendants vicariously liable in two separate claims, including a case involving an unprovoked and violent assault - Cox v Ministry of Justice; Mohamud v WM Morrison Supermarkets plc [02.03.16]

Background

The Supreme Court has today handed down two judgments on vicarious liability:

• Cox concerned whether the Ministry of Justice (MoJ), as being responsible for the prison service, could be held vicariously liable for the acts of a negligent prisoner who injured the claimant whilst the prisoner was carrying out duties in the prison’s catering department. The claimant failed at first instance, but this was overturned on appeal.
• Mohamud dealt with an unprovoked and violent assault on a visitor to petrol kiosk of the supermarket, by Mr Khan, one if its employees. The claimant had failed at both first instance and on appeal.

Both judgments explain that vicarious liability depends on the answers to two questions:

1. What sort of relationship has to exist between an individual and a defendant before the defendant can be made vicariously liable in tort for the conduct of the individual?
2. In what manner does the conduct of the individual have to relate to that relationship, in order for vicarious liability to be imposed on the defendant?
   In Cox the decision concerned the first question and Mohamud the second question.

Cox

Lord Reed, giving the unanimous judgment, relied heavily on the previous judgment of Lord Phillips in Various Claimants v The Catholic Child Welfare Society [2012] and the Court of Appeal’s decision in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2005].

Lord Reed pointed out that the five factors as set out by Lord Phillips which made it fair, just and reasonable to impose vicarious liability on a defendant where the defendant and tortfeasor were not bound by a contract of employment, were not equally significant.

Purely because a defendant is more likely to have deeper pockets than the individual tortfeasor, or because the defendant may have insured itself against vicarious liability, was not in itself a ground for imposing liability. Employers insure themselves because they are liable; but they are not liable merely because they are insured. In modern life the courts will look beyond a right to direct how an employee should perform their duties as a necessary element in the employment relationship.

The remaining factors were intended to provide a basis for identifying circumstances where it is appropriate to extend the scope of vicarious liability beyond the responsibility of an employer for the acts and omissions of its employees in the course of their employment. However, this was not to the extent of imposing liability where the tortfeasor’s activity is entirely attributable to the conduct of a recognisably independent business of his own or of a third party.

A prison was not a business or enterprise in an ordinary sense, and did not need the prisoner to carry out activities which would provide it with a profit. It was however sufficient that the prisoner carrying out his duties in the prison catering department was an integral part of the prison’s operation and was for its benefit.

Their Lordships rejected the MoJ’s arguments, which centred on the fact that the prisoners had to work by law which was for rehabilitation purposes, as being technical arguments. The prison service gained a direct and immediate benefit from the prisoners working in its catering department. If prisoners were not so employed the prison service would have had to employ others to do this work.

Mohamud

Lord Toulson, in upholding the Claimant’s appeal against the supermarket, went back to principles first set out in the 17th century by Lord Chief Justice Holt where, due to the expansion of commerce and industry, vicarious liability began to be broadened. Holt CJ suggested a broad principle that:

Having set this background, Lord Toulson showed how this thread continued through case law, and was supported by the more recent decisions which followed Bazley v Curry [1999] which summarised the public policy justification for imposing vicarious liability.

Their Lordships found that because the supermarket had entrusted its employee, Mr Khan, to attend to customers and respond to their enquiries, his conduct in responding to 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.

The court dismissed the supermarket’s contention that when Mr Khan came out from behind the counter, and followed the claimant onto the forecourt, this broke the significant connection between Mr Khan and his employment. The court held that it was a seamless episode and Mr Khan’s own personal motive was irrelevant. Consequently, because his employers had entrusted Mr Khan with the position of dealing with customers, his employers should be responsible for their employee’s abuse of his position.

The court found it was unavoidable that the ‘close connection’ test is uncertain since an evaluation of the facts has to be carried out in each case to determine whether the wrongdoer's tortious activities are sufficiently connected to their employment.

When considering proximity of connection, a court has to decide whether it is just for the employer to be held vicariously liable for its employee’s actions. This will be easier where the victim is innocent of any wrongdoing, like Mr Mohamud, as opposed to where the victim's actions or conduct may have provoked the assault in some way, where the court may well take a different view.

Comment

The decision in Cox is an understandable one in light of the gradual progression of vicarious liability to reflect the modern fluidity of a tortfeasor carrying out tasks for the furtherance of an enterprise’s business aims, beyond the usual employment relationship.

Mohamud is a more difficult decision for employers and insurers to swallow. Their Lordships have, however, handed down a public policy decision which, whilst ensuring compensation for this particular claimant, will have serious ramifications for employers whose insurance premiums will presumably now be reviewed by insurers. Today’s decision will cause all businesses with customer-facing staff to assess their employees more carefully to make sure they are sound and reliable.