Vicariously liable? Depends on the relationship

Two recent Supreme Court decisions have helped to clarify the law on vicarious liability and are relevant both to businesses who use independent contractors and their insurers.

In WM Morrison Supermarkets plc (Appellant) v Various Claimants (Respondents) [2020] UKSC 12 the Supreme Court allowed Morrison’s appeal against a decision that found it vicariously liable for an employee who had uploaded the data of 98,998 employees to a publicly-accessible file-sharing website. In Barclays Bank v Various Claimants [2020] UKSC 13 the Supreme Court allowed Barclay’s appeal against a decision that it was vicariously liable for sexual assaults performed by an independently contracted GP it had asked to perform medical examinations of prospective employees.

The contentious issues on vicarious liability generally fall into two categories:

• Employees: was the relationship between the employee’s tortious act and the activity the employee was engaged to perform sufficiently close to justify the imposition of vicarious liability?
• Independent contractor: was the relationship between the Defendant and the independent contractor “sufficiently akin to employment” to justify the imposition of vicarious liability?

In Morrisons the Supreme Court considered the applicable test for vicarious liability for the tortious act of an employee.  The question was whether the wrongful conduct is so closely connected with the acts the employee was asked to do, that it may fairly and properly be regarded as done by the employee acting in the ordinary course of employment. In this case, the employee’s malicious act could not be construed as furthering Morrisons’ business.  Morrisons was not vicariously liable for the employee’s actions.

In Barclays the tortious acts were the sexual assaults of an independent contractor GP against prospective employees of the bank. The GP was not an employee of the bank, was not paid a retainer and was not obliged to accept a certain number of referrals from the bank. He was able to refuse to perform an examination if he wished to. He was in business on his own account with a portfolio of patients and clients. The Supreme Court reaffirmed that the question is whether the tortfeasor is carrying on business on his own account, or whether he is in a relationship akin to employment with the defendant.  Here, the relationship was not sufficient to justify the imposition of vicarious liability. If this question is unclear, the Court confirmed that that the key to this “will usually lie in understanding the details of the relationship”.

This is welcome clarification on the application of vicarious liability and will be of some assistance to businesses and their insurers in limiting the application of this principle in claims involving independent contractors or the wrongful acts of employees.  Where the tortfeaser is an independent contractor it seems likely that Claimants will no longer be able to rely on the fact that they had no choice in the selection of that contractor to provide the treatment / service in question, unless a sufficient relationship can be established in accordance with the principles in Barclays. For healthcare providers and their insurers the application of Barclays will require careful analysis in each case to consider the relationship between providers and those they contract to perform treatment.