Vicarious liability in English law
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Vicarious liability in English law is a doctrine of English tort law that imposes strict liability on employers for the wrongdoings of their employees. Generally, an employer will be held liable for any tort committed while an employee is conducting their duties.[1] This liability has expanded in recent years following the decision in Lister v Hesley Hall Ltd[2] to better cover intentional torts, such as sexual assault and deceit. Historically, it was held that most intentional wrongdoings were not in the course of ordinary employment, but recent case law suggests that where an action is closely connected with an employee's duties, an employer can be found vicariously liable.[3] The leading case is now the Supreme Court decision in Catholic Child Welfare Society v Institute of the Brothers of the Christian Schools, which emphasised the concept of "enterprise risk".[4]
Justification for such wide recovery has been made in several areas. The first is that, as is common in tort law, policy reasons should allow those injured to have means of compensation. Employers generally have larger assets, and greater means with which to offset any losses (deep pocket compensation)[5] Secondly, it is under the instruction of an employer by which a tort is committed; the employer can be seen to gain from the duties of their employees, and thus must bear the consequences of any wrongdoings committed by them.[1] Lastly, it has been justified as a way to reduce the taking of risks by employers, and to ensure adequate precautions are taken in conducting business.[6]
In 2016, the Supreme Court judgment in Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11[7] was handed down, with Lord Toulson giving the lead judgment. Lord Toulson held that the question of whether an employer was vicariously liable "in the simplest terms,” involved the consideration of two matters. The first question is what functions or “field of activities” had been entrusted by the employer to the employee. The second question is "whether there was sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable under the principle of social justice which goes back to Holt CJ” [8]
In 2020, the Supreme Court had a further opportunity to consider the principles underpinning vicarious liability in the case of WM Morrison Supermarkets plc (Appellant) v Various Claimants (Respondents) [2020] UKSC 12.[9] In that case, a senior auditor employed by Morrisons had been asked to provide the supermarket's personnel records to their auditors KPMG. Whilst doing so, the employee surreptitiously downloaded the personnel files of 126,000 employees and uploaded it to an internet file sharing site. 9,263 employees and former employees of Morrisons then commenced proceedings against the company, alleging breach of statutory duty under s4(4) of the Data Protection Act 1988, misuse of private information, and breach of confidence, on the basis that Morrisons was vicariously liable for the employee's conduct.[8] At first instance and in the Court of Appeal, it was held that Morrisons were vicariously liable, on the basis that
"the tortious acts in sending the claimants’ data to third parties were in our view within the field of activities assigned to him by Morrisons."[10]
Lord Reed held that whilst the judge at first instance and Court of Appeal had “applied what they understood to be the reasoning of Lord Toulson in Mohamud [2016] AC 677” they had “misunderstood the principles governing vicarious liability in a number of relevant respects” which if correct would have constituted “a major change in the law.”
Lord Reed cited the judgment of Lord Nicholls of Birkenhead Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48 [11] with approval, which he summarised as:
"the wrongful conduct must be so closely connected with acts the employee was authorised to do that, for the purposes of the liability of the employer to third parties, it may fairly and properly be regarded as done by the employee while acting in the ordinary course of his employment"
but he stressed:
"The words “fairly and properly” are not, therefore, intended as an invitation to judges to decide cases according to their personal sense of justice, but require them to consider how the guidance derived from decided cases furnishes a solution to the case before the court. Judges should therefore identify from the decided cases the factors or principles which point towards or away from vicarious liability in the case before the court, and which explain why it should or should not be imposed."
Consequently, as Barrister Kevin Holder explained:[8]
"the question was whether the employee's wrongful disclosure of data was so closely connected with the collation and transmission of the data to KPMG that, for the purposes of the liability of his employer to third parties, the disclosure may fairly and properly be regarded as made by him while acting in the ordinary course of his employment."
Lord Reed held:
"In the present case, it is abundantly clear that the employee 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, his 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."