LIABILITY FOR THE ACTS OF EMPLOYEES AND CONTRACTORS

Normally when we are considering the law in these articles we are looking at regulations, acts of parliament and prosecutions in the criminal courts. This article considers claims for compensation under civil law.

It is a long established principal that where harm is caused by the actions of someone while at work, that person’s employer can be held liable to compensate the injured party for the damage done. This is known as vicarious liability and employers will take out insurance to protect themselves against having to pay such claims. For example if the driver of a delivery vehicle damages a parked car the owner of the car would make a claim against the delivery drivers’ employer and their insurance company.

The act or error needs to be sufficiently closely related to the employer’s work for liability to attach to the employer, however depending on the circumstances employers can sometimes be held liable to pay compensation for deliberate criminal acts carried out by employees. Examples have included employees assaulting customers or fellow employees and sexual assaults by persons in positions of trust.

This does not absolve the individual from responsibility for their own actions, but places a responsibility to pay compensation on an organisation that is more likely to have the funds to do so. But how far should an employers responsibility go, for example should this include liability for independent contractors?

The Supreme Court has recently handed down its judgement in two cases where an employer’s vicarious liability was disputed.

In the first case between 1968 and 1984 Barclays Bank had contracted a Dr Bates to carry out pre-employment health checks on potential employees. Allegations of sexual assault were made and the police launched an investigation in 2012. The police reported that, if Dr Bates had not died in 2009, there would have been enough evidence to charge him.

Several claims for compensation were made against Barclays Bank, these were initially successful at court, Barclays appealed on the grounds that Dr Bates was an independent contractor not an employee and that employers are not liable for the actions or negligence of independent contractors in the course of their work. The Court of Appeal upheld the original decision and the case went to the Supreme Court for a final decision.

The Supreme Court overturned the earlier decisions and held that “the Bank is not vicariously liable for any wrongdoing of Dr Bates in the course of the medical examinations he carried out for the Bank.” Full details of the Supreme Court’s decision can be found at: https://www.supremecourt.uk/cases/uksc-2018-0164.html

In a parallel case the Supreme Court also considered claims made by employees of Wm Morrisons supermarkets after Mr Skelton, a senior IT internal auditor, copied payroll data onto a memory stick and deliberately downloaded a file containing the personal details of almost 100,000 employees onto a file sharing website.

In this case the individual was an employee and a key argument was whether there was a sufficiently close connection between the role he was employed to carry out and the wrongful actions that he took for Morrisons to be held vicariously liable. The first court found that there was a sufficiently close relationship and that Morrisons were liable, Morrisons appealed, however the Court of Appeal upheld the original decision.

A further Appeal was made to the Supreme Court for a final decision. Again the Supreme Court overturned the decisions of the lower courts finding that the act was not part of Mr Selton’s role and that Morrisons were not vicariously liable for the deliberate acts of an employee who had deliberately set out to harm the company, specifically stating “it is abundantly clear that Skelton was not engaged in furthering his employer’s business when he committed the wrongdoing in question. On the contrary, he was pursuing a personal vendetta, seeking vengeance for the disciplinary proceedings some months earlier”. Full details of the Supreme court’s judgement can be found at: https://www.supremecourt.uk/cases/uksc-2018-0213.html