Employer not liable for sexual assaults committed by independent contractor

Background

The long-established legal principle of “vicarious liability” makes employers liable for wrongful acts committed by their employees in the course of their employment. As regards the acts of independent contractors, the courts previously held that vicarious liability could not apply. In more recent times, however, decisions have expanded the categories of relationship that can give rise to vicarious liability beyond that of employer and employee. 

In a case in 2012 known as the “Christian Brothers case”, the Supreme Court (SC) held that a Catholic Institute was vicariously liable for acts committed by teachers even though it did not employ them (Catholic Child Welfare Society and others v Various claimants [2012] UKCS 56). The SC identified five factors that courts should consider when deciding whether an organisation should be liable for wrongs committed by others acting on its behalf, focusing on whether the relationship was “akin to employment”:

• The organisation is more likely than the individual to have the means (including by way of insurance) to compensate the victims.
• The individual committed the act as a result of activity it undertook on behalf of the organisation.
• The individual’s activity was likely to be part of the organisation’s business activity.
• The organisation created the risk of the act being committed by the individual (i.e. by engaging them to carry on the business activity).
• The individual was, to a greater or lesser degree, under the control of the organisation.

In a subsequent case, the SC further refined the test in finding the Ministry of Justice vicariously liable for the negligence of a prisoner working in a prison kitchen, even though she was not an employee (Cox v Ministry of Justice [2016] UKSC 10). Emphasising that the second, third and fourth factors in the above list from the Christian Brothers case were the most relevant, the SC examined the details of the relationship between the prisoner and the Ministry of Justice. Other cases since have followed a similar line.

This brings us to the latest case involving Barclays Bank, in which the SC has clarified some of the remaining areas of uncertainty.

Facts of the case

The claimants in the case had been applicants for employment at Barclays between 1968 and 1984. Those who were successful at interview were offered a job subject to passing a medical examination.  The reason for requiring the examination was so that the prospective employees could be recommended for life insurance, as required by the bank’s pension scheme. 

The medical examinations were carried out by a Dr Bates, who was paid a fee for each report. He was not an employee of the bank: he was self-employed and had his own practice, with a portfolio of patients and clients of which Barclays was only one. During the medical examinations, which took place in a consulting room at Dr Bates’s home, the claimants were assaulted.

Dr Bates died in 2009 and, because his estate had been distributed, the claimants sued the bank, asserting that it was vicariously liable for his assaults. Barclays denied liability on the basis that Dr Bates was self-employed and provided his services as an independent contractor.

The High Court found Barclays liable for the assaults perpetrated by Dr Bates in the course of medical examinations carried out at its request, and the Court of Appeal upheld that decision.

Supreme Court’s judgment

The SC unanimously found in the bank’s favour, ruling that it was not vicariously liable for the assaults carried out by Dr Bates. The judgment reviews the previous case law and clarifies the principles to be applied, with the main points being:

• There is a two-stage test for vicarious liability. The first stage is whether there is a relationship between the two parties which “makes it proper for the law to make one pay for the fault of the other”. The second stage is whether there is a connection between that relationship and the wrongdoing of the person committing it.  
• In this case, the first stage of the test had not been met. The main question was whether Dr Bates had been carrying on business on his own account, or whether he was in a relationship “akin to employment” with the Bank. The SC said that, while the Christian Brothers case was a “doubtful case”, the five factors from it may be helpful in identifying whether or not a relationship is “akin to employment” - but usually the key lies in understanding the details of the relationship. Where it is clear that an individual is carrying on their own independent business, it is not necessary to consider the five factors.
• Dr Bates was working for his own business or enterprise and was “not an employee or anything close to an employee” of the bank. It was important that the work he did for Barclays was a very small proportion of his overall work, that he could refuse to do a requested examination if he chose, and that he carried his own medical liability insurance. The SC concluded he was a “classic independent contractor” for whom the bank was not vicariously liable.

The SC also commented on the developing case law around “worker” status and those known as “limb (b) workers” under section 230(3)(b) of the Employment Right Act 1996 and considered whether identifying someone as a “worker” might also help determine whether they are a “true” independent contractor. However, the SC refused to go “too far down the road to tidiness” by aligning the common law concept of vicarious liability, developed for one set of reasons, with the statutory concept of “worker” developed for quite a different set of reasons.  

Implications

On the same day as this judgment, the SC issued another decision on vicarious liability in the Morrisons case, overturning a finding that the supermarket chain Morrisons was vicariously liable for a rogue employee’s deliberate disclosure of payroll data related to some 100,00 co-workers. Both judgments will come as welcome news to employers and other organisations engaging independent contractors, with their combined effect being to narrow the scope of vicarious liability compared with the earlier Court of Appeal decisions.

While the Barclays judgment has particular implications for employers engaging independent contractors, it does not mean that an organisation will never be liable for the act of such a contractor. Rather, the test remains the same: is the wrong-doer carrying out business on their own account, as with Dr Bates, or is the relationship “akin to employment”? As the SC pointed out, whether the five factors from the Christian Brothers case should be applied will depend on how clear-cut the status of the independent contractor is. Where there is some doubt over whether they are truly conducting their own independent business, the organisation may still potentially be liable for the individual’s acts.

Barclays Bank plc v Various claimants – judgment available here