Dear Colleagues,

Today, the UK Supreme Court has remotely handed down judgment in three significant cases on tort. Two clarifying/revising/changing the approach to vicarious liability and one on public policy and damages in negligence.

In XX v Whittington Hospital NHS Trust https://www.supremecourt.uk/cases/docs/uksc-2019-0013-judgment.pdf. the defendant hospital negligently failed to diagnose signs of cancer in the claimant. Her subsequent treatment for cancer left her infertile. The claimant sought to recover as damages the cost of commercial surrogacy arrangements in the United States. Commercial surrogacy arrangements are unlawful in the United Kingdom. The Court of Appeal held (broadly) that these costs were recoverable. The Supreme Court by a majority holds that the relevant costs can be recovered – commissioning such arrangements abroad itself is not illegal in the UK. Lord Carnwath and Lord Reed dissent. There is some interesting discussion of the relevance of public policy which is of wider significance.

Then the other two cases– as noted on this list before, the Supreme Court has in several decisions this decade significantly expanded the scope of vicarious liability. (As it happens, two key 2016 decisions, Cox and Mohamud, were also handed down on the same day as each other). The Court again decides on case on the relevant relationship and one on whether the tort was sufficiently closely connected to the employment. The Court has rowed back significantly on both limbs, in a way which purports to be consistent with its previous decisions on the point, but the tenor of them may be difficult to reconcile.

In Barclays Bank v Various Claimants https://www.supremecourt.uk/cases/docs/uksc-2018-0164-judgment.pdf, the defendant bank was sued by applicants for employment and employees with the Bank. They required to attend a consultation with Dr Bates, who carried out medical assessments on behalf of the bank. He allegedly sexually assaulted them. The question was whether the Bank was vicariously liable for his actions. The bank argued that the doctor was self-employed bad engaged by them as an independent contractor. The Court of Appeal held the Bank liable. The Supreme Court unanimously allows the appeal and confirms that the historical distinction between employees and independent contractors still applies. Lady Hale gives the judgment:

22. “It seems to me obvious that in Cox the result was bound to be the same whether it was expressed in terms of the test stated in para 24 of Lord Reed’s judgment or in terms of the “sufficiently akin to employment” test. Indeed, the case for vicarious liability for torts committed by prisoners in the course of their work within the prison seems to me a fortiori the case for vicarious liability for the work done by employees for their employers. There is nothing in Lord Reed’s judgment to cast doubt on the classic distinction between work done for an employer as part of the business of that employer and work done by an independent contractor as part of the business of that contractor.”

…

27. “The question therefore is, as it has always been, whether the tortfeasor is carrying on business on his own account or whether he is in a relationship akin to employment with the defendant. In doubtful cases, the five “incidents” identified by Lord Phillips may be helpful in identifying a relationship which is sufficiently analogous to employment to make it fair, just and reasonable to impose vicarious liability. Although they were enunciated in the context of non-commercial enterprises, they may be relevant in deciding whether workers who may be technically self-employed or agency workers are effectively part and parcel of the employer’s business. But the key, as it was in Christian Brothers, Cox and Armes, will usually lie in understanding the details of the relationship. Where it is clear that the tortfeasor is carrying on his own independent business it is not necessary to consider the five incidents.”

In Morrisons v Various Claimants https://www.supremecourt.uk/cases/docs/uksc-2018-0213-judgment.pdf , an employee of the defendant supermarket (who held a grudge against the firm) deliberately disclosed personal information of just under 100,000 employees, in breach of data protection legislation. The novel question here was whether an employer can be vicariously the employee’s criminal act was in part designed to cause the employer harm by making them vicariously liable for their act. The Supreme Court (led by Lord Reed PSC) allows the appeal and concludes that the lower courts misunderstood Mohamud. It is heartening to know that there are some limits to vicarious liability, although, with respect, the exact consistency of approach here with Mohamud is not entirely clear. There seems to be some revision of Lord Toulson’s view that the employee’s “motive is irrelevant” in Mohamud. Lord Reed concluded:

47 “In the present case, 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. In those circumstances, applying the test laid down by Lord Nicholls in Dubai Aluminium in the light of the circumstances of the case and the relevant precedents, Skelton’s wrongful conduct was not so closely connected with acts which he was authorised to do that, for the purposes of Morrisons’ liability to third parties, it can fairly and properly be regarded as done by him while acting in the ordinary course of his employment.”

Best wishes to all at this challenging time,

Jamie

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James Lee

Reader in English Law and Vice-Dean (Education)

The Dickson Poon School of Law

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King's College London
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