Vicarious liability: Where do UK employers draw the line? Vicarious liability: Where do UK employers draw the line?

Vicarious liability: Where do UK employers draw the line?
07 Nov 2018

It is well established in UK law that employers can be held liable for the things their employees do. But whether an employer is found to be vicariously liable for an employee’s actions or not can be crucial in a financial sense to those who have suffered harm.

In general, employers tend to have deeper pockets than individual employees and are also much more likely to be insured. Consequently, victims have a much better prospect of receiving compensation if an employer is vicariously liable for any harm done to them.

There is a limit to an employer’s liability for the actions of its employees. The wrong must have been committed in the course of their employment. It must also be so closely connected with the employment that it is fair and just to hold the employer vicariously liable.

But this test is not always as straightforward as it may seem to apply. In one recent case, for example, an employer was held to be vicariously liable for a violent and unprovoked assault on a customer by one of its employees at its premises. Two other cases, which are outlined below, also give us further examples of how the courts determine the issue:

Assault during unscheduled late night drinking session

In the case of Bellman v Northampton Recruitment Limited, Mr Major was managing director (MD) of the company. It held an offsite Christmas party and all employees and their partners were invited.

After the party, half of the guests, including the MD, went to a hotel in taxis paid for by the firm. This ‘after-party’ was impromptu and was not part of pre-planned party arrangements. The majority of the group continued to drink alcohol into the early hours, and it was expected that the organisation would pay for some of the drinks.

At around 2am, the conversation switched from social to work matters. In particular, a discussion arose about whether a newly-appointed staff member should be based at one office or another. The MD became angry and lectured the employees on how he owned the company and it was he who made the decisions.

One of the employees present was Mr Bellman. He non-aggressively challenged the MD, who responded by swearing at him and punching him. Major then punched Bellman a second time.

Mr Bellman was knocked unconscious and fractured his skull. He sustained severe brain damage and is unlikely to be able to work again. Bellman brought a claim for damages against the company and argued that it was vicariously liable for Major’s actions.

Mr Bellman initially lost his claim. The High Court found that the drinks were separate from the Christmas party itself and arose in the context of “entirely voluntary and personal choices” made by some employees to engage in a heavy drinking session. It believed there was insufficient connection between Major’s role within the company and the assault. Bellman appealed and this decision was reversed.

The Court of Appeal determined that the nature of Major’s job was very wide, and the impromptu drinking session had to be seen against the background of the evening’s events. It was on the same evening as the Christmas party. At the time of the incident, Major was not just one of a group of drunken revellers. He had chosen to wear his ‘managing director’s hat’ and to deliver a lecture to his employees. He asserted, and misused, his authority as MD.

His seniority was a significant factor. Based on these facts, the Court held there was a sufficient connection between Major’s job and the assault for it to be “in the course of employment”. The company was held to be vicariously liable for his actions.

But one of the judges was keen to distinguish the facts of the case from a situation in which a group of colleagues ends up having an argument that leads to an assault.

Malicious disclosure of colleagues’ personal data by a rogue employee

In WM Morrison Supermarkets Plc v various claimants, the courts considered an employee’s deliberate disclosure of his colleagues’ personal details on the internet. The staff member had a grudge against his employer, Morrisons.

He copied the personal information, including the payroll data, of just under 100,000 employees onto a memory stick, before posting it on the internet. The staff member was convicted of criminal offences, including offences under the Data Protection Act 1998 (now superseded by the General Data Protection Regulation (GDPR)). 

The employees, whose details had been disclosed, claimed damages against the supermarket chain for misuse of private information, breach of confidence and breach of the Data Protection Act. Although they succeeded in the High Court, Morrisons appealed.

The Court of Appeal held that the employee’s actions in downloading his colleagues’ personal information and then disclosing it on the internet were a seamless and continuous sequence of events. This meant that Morrisons was vicariously liable - even though the intention of the employee, who was harbouring a grudge, was to harm the supermarket chain.

The Court suggested that to tackle the situation, employers should insure themselves against such incidents through public liability insurance or a cyber-insurance policy. But because the liability in claims such as this one can be very substantial, particularly under the new GDPR regime, we can now inevitably expect insurers to react to this ruling by introducing exclusions or policy limits into their schemes.

Morrisons, meanwhile, is expected to appeal the case, so we may receive further guidance from the Supreme Court on vicarious liability in due course. But it is an unpredictable area of law with potentially far-reaching consequences.

The two cases above indicate a clear direction of travel. Therefore, as we move into the Christmas season and employers start to host parties while groups of colleagues plan their own ‘unofficial’ celebrations, vicarious liability is an important issue for employers to consider.

 Anne-Marie Balfour

Anne-Marie Balfour is a solicitor and legal director in the employment, pensions and immigration team at Charles Russell Speechlys LLP. She advises employers and senior executives on all aspects of employment law. Anne-Marie has particular expertise in employment law with an immigration angle and her articles are frequently published in the national and trade press. 

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Morrisons' verdict: Employers may be vicariously liable for staff deeds

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Is a 'bonfire of workers' rights' likely in the UK post-Brexit?

 

It is well established in UK law that employers can be held liable for the things their employees do. But whether an employer is found to be vicariously liable for an employee’s actions or not can be crucial in a financial sense to those who have suffered harm.

In general, employers tend to have deeper pockets than individual employees and are also much more likely to be insured. Consequently, victims have a much better prospect of receiving compensation if an employer is vicariously liable for any harm done to them.

There is a limit to an employer’s liability for the actions of its employees. The wrong must have been committed in the course of their employment. It must also be so closely connected with the employment that it is fair and just to hold the employer vicariously liable.

But this test is not always as straightforward as it may seem to apply. In one recent case, for example, an employer was held to be vicariously liable for a violent and unprovoked assault on a customer by one of its employees at its premises. Two other cases, which are outlined below, also give us further examples of how the courts determine the issue:

Assault during unscheduled late night drinking session

In the case of Bellman v Northampton Recruitment Limited, Mr Major was managing director (MD) of the company. It held an offsite Christmas party and all employees and their partners were invited.

After the party, half of the guests, including the MD, went to a hotel in taxis paid for by the firm. This ‘after-party’ was impromptu and was not part of pre-planned party arrangements. The majority of the group continued to drink alcohol into the early hours, and it was expected that the organisation would pay for some of the drinks.

At around 2am, the conversation switched from social to work matters. In particular, a discussion arose about whether a newly-appointed staff member should be based at one office or another. The MD became angry and lectured the employees on how he owned the company and it was he who made the decisions.

One of the employees present was Mr Bellman. He non-aggressively challenged the MD, who responded by swearing at him and punching him. Major then punched Bellman a second time.

Mr Bellman was knocked unconscious and fractured his skull. He sustained severe brain damage and is unlikely to be able to work again. Bellman brought a claim for damages against the company and argued that it was vicariously liable for Major’s actions.

Mr Bellman initially lost his claim. The High Court found that the drinks were separate from the Christmas party itself and arose in the context of “entirely voluntary and personal choices” made by some employees to engage in a heavy drinking session. It believed there was insufficient connection between Major’s role within the company and the assault. Bellman appealed and this decision was reversed.

The Court of Appeal determined that the nature of Major’s job was very wide, and the impromptu drinking session had to be seen against the background of the evening’s events. It was on the same evening as the Christmas party. At the time of the incident, Major was not just one of a group of drunken revellers. He had chosen to wear his ‘managing director’s hat’ and to deliver a lecture to his employees. He asserted, and misused, his authority as MD.

His seniority was a significant factor. Based on these facts, the Court held there was a sufficient connection between Major’s job and the assault for it to be “in the course of employment”. The company was held to be vicariously liable for his actions.

But one of the judges was keen to distinguish the facts of the case from a situation in which a group of colleagues ends up having an argument that leads to an assault.

Malicious disclosure of colleagues’ personal data by a rogue employee

In WM Morrison Supermarkets Plc v various claimants, the courts considered an employee’s deliberate disclosure of his colleagues’ personal details on the internet. The staff member had a grudge against his employer, Morrisons.

He copied the personal information, including the payroll data, of just under 100,000 employees onto a memory stick, before posting it on the internet. The staff member was convicted of criminal offences, including offences under the Data Protection Act 1998 (now superseded by the General Data Protection Regulation (GDPR)). 

The employees, whose details had been disclosed, claimed damages against the supermarket chain for misuse of private information, breach of confidence and breach of the Data Protection Act. Although they succeeded in the High Court, Morrisons appealed.

The Court of Appeal held that the employee’s actions in downloading his colleagues’ personal information and then disclosing it on the internet were a seamless and continuous sequence of events. This meant that Morrisons was vicariously liable - even though the intention of the employee, who was harbouring a grudge, was to harm the supermarket chain.

The Court suggested that to tackle the situation, employers should insure themselves against such incidents through public liability insurance or a cyber-insurance policy. But because the liability in claims such as this one can be very substantial, particularly under the new GDPR regime, we can now inevitably expect insurers to react to this ruling by introducing exclusions or policy limits into their schemes.

Morrisons, meanwhile, is expected to appeal the case, so we may receive further guidance from the Supreme Court on vicarious liability in due course. But it is an unpredictable area of law with potentially far-reaching consequences.

The two cases above indicate a clear direction of travel. Therefore, as we move into the Christmas season and employers start to host parties while groups of colleagues plan their own ‘unofficial’ celebrations, vicarious liability is an important issue for employers to consider.

 Anne-Marie Balfour

Anne-Marie Balfour is a solicitor and legal director in the employment, pensions and immigration team at Charles Russell Speechlys LLP. She advises employers and senior executives on all aspects of employment law. Anne-Marie has particular expertise in employment law with an immigration angle and her articles are frequently published in the national and trade press. 

OTHER ARTICLES THAT MAY INTEREST YOU

Morrisons' verdict: Employers may be vicariously liable for staff deeds

UK supermarket chain Morrisons faces £100m equal pay claim

Is a 'bonfire of workers' rights' likely in the UK post-Brexit?

 

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