Vicarious liability

Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11

per LORD TOULSON: (with whom Lord Neuberger, Lady Hale, Lord Dyson and Lord Reed agree) Origins and development of vicarious liability

10.              The development of the doctrine of vicarious liability can be traced to a number of factors; in part to legal theories, of which there have been several; in part to changes in the structure and size of economic and other (eg charitable) enterprises; and in part to changes in social attitudes and the courts’ sense of justice and fairness, particularly when faced with new problems such as cases of sexual abuse of children by people in a position of authority.

11.              According to Holdsworth’s A History of English Law (1908) (vol 3, pp 383-387) in medieval times the general principle was that a master was only liable at civil law for misdeeds of his servants if done by his command and consent. “It would be against all reason”, said counsel in the reign of Henry IV, “to impute blame or default to a man, when he has none in him, for the carelessness of his servants cannot be said to be his act” (YB 2 Hy IV Pasch pl 5). But there were some exceptions, which today would be classed as instances of non-delegable duty. Liability for damage by fire was an example. The law imposed on house holders a duty to keep their fires from damaging their neighbours. If a fire was caused by a servant or guest, and it damaged a neighbour’s house, the owner was liable. He could escape liability only by showing that the fire originated from the act of a stranger (YB 2 Hy IV Pasch pl 6).

12.              The 17th century was a century of expansion of commerce and industry, and vicarious liability began to be broadened. Holt CJ was particularly influential in this development. In Boson v Sandford (1691) 2 Salk 440 a shipper of goods sued the ship owner for damage caused by the negligence of the master. Eyre J held that there was no difference between a land carrier and a water carrier, and therefore the owners were under a special liability as carriers for the acts of their servants; but Holt CJ rested his judgment on the broad principle that “whoever employs another is answerable for him, and undertakes for his care to all that make use of him”. (The action failed on a technical pleading point.)

13.              In Tuberville v Stamp (1698) 1 Ld Raym 264, Skinner 681, SC Comb 459, the plaintiff complained that the defendant’s servant lit a fire on heath land which destroyed the heath growing on the plaintiff’s land. The majority of the judges held that the plaintiff had a cause of action under the medieval rule about liability for fire; but Holt CJ doubted whether that rule applied to fires other than in houses, and he based liability (according to the report in Comb.) on the broader ground that “if my servant doth anything prejudicial to another, it shall bind me, when it may be presumed that he acts by my authority, being about my business”.

14.              Holt CJ did not confine this principle to cases of negligence. In Hern v Nichols (1700) 1 Salk 289, the plaintiff brought an action on the case for deceit, alleging that he bought several parcels of silk under a fraudulent representation by the defendant’s factor that it was another kind of silk. The factor was operating overseas and there was no evidence of deceit on the part of the defendant personally. Holt CJ held that the defendant was nevertheless liable “for seeing somebody must be a loser by this deceit, it is more reason that he that employs and puts a trust and confidence in a deceiver should be a loser, than a stranger”.

15.              Holt CJ gave the same explanation for the development of the principle in Sir Robert Wayland’s Case (1706) 3 Salk 234, “the master at his peril ought to take care what servant he employs; and it is more reasonable that he should suffer for the cheats of his servant than strangers and tradesmen”.

16.              Holt CJ also held that for the master to be liable the servant’s act had to be within the area of the authority given to him: Middleton v Fowler (1699) 1 Salk 282.

17.              Holdsworth noted that the first case in which the modern principle can begin to be seen was the admiralty case of Boson v Sandford, and he considered it not unlikely that necessities arising from the demands of the commercial world, and the influence of Roman law on the admiralty courts, led to the introduction of ideas which then permeated to the common law courts (vol 8, p 476). He also observed that this was only one of the influences and that a number of reasons were put forward to explain the basis of vicarious liability. These he summarised as follows (at p 477):

“It was sometimes put on the ground that the master by implication undertakes to answer for his servant’s tort - which is clearly not true. Sometimes it was put on the ground that the servant had an implied authority so to act - which again is clearly not true. Sometimes it was grounded on the fiction that the wrong of the servant is the wrong of the master, from which the conclusion was drawn that the master must be liable because no man shall be allowed to make any advantage of his own wrong; and sometimes on the ground that the master who chooses a careless servant is liable for making a careless choice. Blackstone gives all these reasons for this principle. In addition, he deals with the totally different case where a master has actually authorised the commission of a tort; and cites most of the mediaeval cases of vicarious liability with the special reasons for each of them. It is not surprising that he should take refuge in the maxim ‘qui facit per alium facit per se’ or that others should have used in a similar way the maxim ‘respondeat superior’. His treatment of the matter illustrates the confusion of the authorities; and it is noteworthy that he does not allude to the true reason for the rule - the reason of public policy - which Holt CJ, gave in Hern v Nichols and in Wayland’s Case.”

18.              In Barwick v English Joint Stock Bank (1867) 2 LR Exch 259, 265, Willes J described it as settled since Lord Holt’s time that a principal is answerable for the act of an agent in the course of his business, but it was argued in that case (despite the decision in Hern v Nichols) that a principal was not liable for a fraudulent act of his agent. Willes J rejected that argument, holding that “no sensible distinction can be drawn between the case of fraud and the case of any other wrong”. He cited authorities in which the doctrine had been applied, for example, in cases of direct trespass to goods and false imprisonment, and he observed (at p 266):

“In all these cases it may be said, as it was said here, that the master has not authorized the act. It is true, he has not authorized the particular act, but he has put the agent in his place to do that class of acts, and he must be answerable for the manner in which the agent has conducted himself in doing the business which it was the act of his master to place him in.”

19.              His judgment gave rise to difficulties of a different kind because it included the following statement (at p 265):

“The general rule is, that the master is answerable for every such wrong of the servant or agent as is committed in the course of the service and for the master’s benefit, though no express command or privity of the master be proved.” (Emphasis added.)

20.              The words in italics were used in later cases to support the argument that in order to establish vicarious liability it was necessary to show that the employee’s misdeed was committed for the employer’s benefit. This argument was rejected by the House of Lords in the landmark case of Lloyd v Grace, Smith & Co [1912] AC 716. A solicitor’s clerk, who was entrusted by the defendant firm with managing its conveyancing department, defrauded the plaintiff, who had come to the firm for advice about two properties left to her by her late husband. He advised her to sell and procured her signature on documents conveying the properties to himself, which he disposed of for his own benefit. It was held that the firm was liable for his fraud. Lord Macnaghten, who gave the leading judgment (with which Lord Loreburn LC and Lord Atkinson agreed) and Lord Halsbury both referred with approval to the general principle enunciated by Lord Holt (pp 726-727 and 732).

21.              Lord Macnaghten, at pp 735-736, also endorsed Lord Blackburn’s interpretation of Barwick’s case in Houldsworth v City of Glasgow Bank (1880) 5 App Cas 317, 339, namely that the substantial point decided in that case was that “an innocent principal was civilly responsible for the fraud of his authorised agent, acting within his authority, to the same extent as if it was his own fraud”.

22.              Lord Macnaghten recognised the difficulty of trying to give a precise meaning to the expression “within his authority”. He referred at pp 732-734 to the discussion of the subject by Sir Montague Smith in Mackay v Commercial Bank of New Brunswick (1874) LR 5 PC 394, 410, who observed that since it may be generally assumed that, in mercantile transactions, principals do not authorise their agents to act fraudulently, frauds are beyond the agent’s authority in the narrowest sense of which the expression admits; but that so narrow a sense would be opposed to justice and so a wider construction had been put on the words, and that it was difficult to define how far it went. Lord Macnaghten (at p 736) agreed that what is meant by the expressions “acting within his authority”, “acting in the course of his employment” and “acting within the scope of his agency” (as applied to an agent) is not easy to define, but he said that whichever expression is used, it must be construed liberally.

23.              Lord Macnaghten noted that it was within the scope of the clerk’s employment to advise clients regarding the best way to sell property and the execution of any necessary documents. He concluded that the clerk was therefore acting within the scope of his employment. Lord Macnaghten also made the broader point that it would be unjust if the firm were not held liable. The clerk was its “accredited representative”: p 738. It was right that the loss from his fraud should be suffered by the person who placed him in that position rather than the client who dealt with him as the firm’s representative.

24.              Although taking properties from the plaintiff was far removed from what the wrongdoer was employed to do, the justice of the decision is obvious. The wrongdoer was trusted both by his firm and by its client. They were each innocent, but one of them had to bear the loss, and it was right that it should be the employer on the principle stated by Lord Holt in Hern v Nichols. The firm employed the wrongdoer and placed him in a position to deal with the claimant; he abused that position and took advantage of her. It was fairer that the firm should suffer for the cheating by their employee than the client who was cheated.

25.              In 1907 Salmond published the first edition of his text book on the Law of Torts. He defined a wrongful act by a servant in the course of his employment as “either (a) a wrongful act authorised by the master or (b) a wrongful and unauthorised mode of doing some act authorised by the master”, with the amplification that a master is liable for acts which he has not authorised if they are “so connected with acts which he has authorised, that they may rightly be regarded as modes - although improper modes - of doing them” (pp 83-84).

26.              Salmond’s formula, repeated in later editions, was cited and applied in many cases, sometimes by stretching it artificially; but even with stretching, it was not universally satisfactory. The difficulties in its application were particularly evident in cases of injury to persons or property caused by an employee’s deliberate act of misconduct.

27.              In Petterson v Royal Oak Hotel Ltd [1948] NZLR 136 a barman refused to serve a drunken customer with more alcohol. As the customer was on his way out of the premises, he threw a glass at the barman which broke in pieces at his feet. The barman picked up a piece of the broken glass and threw it back at the departing customer, but missed him and injured the eye of another customer, who sued for damages. The trial judge found that the barman threw the piece of glass “not in order to expedite the departure of the troublesome customer, but as an expression of his personal resentment at the glass being thrown at him”. He found for the claimant and his judgment was upheld by the Court of Appeal.

28.              The Salmond formula was cited in argument. The Court of Appeal held that the barman’s act was an improper mode of doing his job of keeping order in the bar and avoiding altercations, although at the time the customer was leaving. The justice of the result is obvious. The claimant was struck in the eye by a piece of glass thrown by the barman who was on duty, and there would be something wrong with the law if he was not entitled to compensation from the company which employed the barman. A barman needs to be capable of acting with restraint under provocation, for the safety of other customers, and if the proprietor engaged someone who was incapable of doing so and who injured an innocent customer, it would be wrong for the customer to be left with his only remedy against the barman. But to rationalise the result by describing the barman’s loss of temper and act of retaliation as a mode, but improper mode, of keeping order and avoiding altercation is an unnatural use of words.

29.              Deatons Pty Ltd v Flew (1949) 79 CLR 370 had similarities to Petterson but was decided differently. According to the jury’s verdict, the claimant was the victim of an unprovoked attack by a barmaid on duty in a hotel when he asked her for the manager. She threw a glass of beer over him and then threw the glass in his face, causing him the loss of sight in one eye. The High Court of Australia held that there was no basis for finding that the barmaid was acting in the course of her employment. They rejected the argument that her conduct was incidental to her employment in that it was a method, though an improper method, of responding to an inquiry from a customer. They also rejected the argument, which had succeeded in Petterson, that her conduct was an improper mode of keeping order. Dixon J gave two reasons: first, that she did not throw the glass in the course of keeping discipline, and secondly, that she was not in charge of the bar, but was working under the supervision of another woman.

30.              I agree that it was tortuous and artificial to describe the barmaid’s conduct as a mode of performing what she was employed to do, but that does not make the result just. In a broader sense it occurred in the course of her employment. She was employed by the hotel proprietor to serve customers. She was approached in that capacity by a customer, and ordinary members of the public would surely expect the company who employed her to serve customers to have some responsibility for her conduct towards them. And it surely cannot be right that the measure of the company’s responsibility should depend on whether she was the head barmaid or an assistant. The customer would have no knowledge what were the exact limits of her responsibilities.

31.              In Warren v Henlys Ltd [1948] 2 All ER 935 a customer at a petrol station had an angry confrontation with the petrol station attendant, who wrongly suspected him of trying to make off without payment. The customer became enraged at the manner in which he was spoken to by the attendant. After paying for the petrol, the customer saw a passing police car and drove off after it. He complained to the police officer about the attendant’s conduct and persuaded the officer to return with him to the petrol station. The officer listened to both men and indicated that he did not think that it was a police matter, whereupon the customer said that he would report the attendant to his employer. The officer was on the point of leaving, when the attendant punched the customer in the face, knocking him to the ground.

32.              Hilbery J held that the assault was not committed in the course of the attendant’s employment, applying the Salmond formula. By the time that the assault happened the customer’s business with the petrol station had ended, the petrol had been paid for and the customer had left the premises. When he returned with the police officer it was for the purpose of making a personal complaint about the attendant. The attendant reacted violently to being told that the customer was going to report him to his employer, but there was no basis for holding the employer vicariously liable for that behaviour. The judge was right to dismiss the customer’s claim against the petrol company. At the time of the incident the relationship between the plaintiff and the attendant had changed from that of customer and representative of the petrol company to that of a person making a complaint to the police and the subject of the complaint. In Lister v Hesley Hall Ltd [2002] 1 AC 215 Lord Millett commented, at para 80, that “the better view may have been that the employer was not liable because it was no part of the duties of the pump attendant to keep order”, but there is no suggestion in the report of the case that there was any other employee in practical charge of the forecourt and cash desk area. If the attendant had punched the customer because he believed, rightly or wrongly, that the customer was leaving without payment, I would regard such conduct as occurring within the course of his employment.

33.              In Keppel Bus Co Ltd v Ahmad [1974] 1 WLR 1082 the plaintiff was travelling in a bus when the conductor treated an elderly lady passenger in a high-handed and rude fashion. The plaintiff remonstrated with him. An altercation followed in which each tried to hit the other. They were separated by the passengers, but the conductor struck the plaintiff in the eye with his ticket punch, causing loss of sight in the eye. The trial judge and the Singapore Court of Appeal held that the bus company was vicariously liable, but the Privy Council decided otherwise.

34.              The Board applied the Salmond formula. It held that the conductor’s conduct could not be described as a wrong mode of performing the work which he was expressly or impliedly authorised to do. He could not be described as maintaining order in the bus; if anyone was keeping order in the bus, it was the passengers. The Board rejected the argument that his job could be described as “managing the bus” and that his conduct arose out of his power and duty to do so. The case illustrates again the awkwardness of the Salmond formula when applied to such situations. Looked at more broadly, the bus company selected the conductor for employment and put him in charge of the passenger area of the bus. He abused the position of authority which his employment gave him. Because he was throwing his weight around as the conductor, the plaintiff objected. Because the conductor objected to what he appeared to regard as interference with the exercise of his authority, he struck the plaintiff in the face. (The trial judge summarised it by saying that “He was in effect telling the plaintiff by his act not to interfere with him in his due performance of his duties”: p 1084.) In such circumstances it was just that the passenger should be able to look to the company for compensation.

35.              In two noteworthy cases the court took a broader approach to the question of scope of employment. Their significance is enhanced by the fact that they were cited with approval in Lister.

36.              In Central Motors (Glasgow) Ltd v Cessnock Garage and Motor Co 1925 SC 796, 802, Lord Cullen said:

“The question is not to be answered merely by applying the test whether the act in itself is one which the servant was authorised or ordered or forbidden to do. The employer has to shoulder responsibility on a wider basis; and he may, and often does, become responsible to third parties for acts which he has expressly or impliedly forbidden the servant to do. … It remains necessary to the master’s responsibility that the servant’s act be one done within the sphere of his service or the scope of his employment, but it may have this character although it consists in doing something which is the very opposite of what the servant has been intended or ordered to do, and which he does for his own private ends. An honest master does not employ or authorise his servant to commit crimes of dishonesty towards third parties; but nevertheless he may incur liability for a crime of dishonesty committed by the servant if it was committed by him within the field of activities which the employment assigned to him, and that although the crime was committed by the servant solely in pursuance of his own private advantage.”

The expression “within the field of activities” assigned to the employee is helpful. It conjures a wider range of conduct than acts done in furtherance of his employment.

37.              In Rose v Plenty [1976] 1 WLR 141 a milk roundsman paid a 13 year old boy to help him collect and deliver milk bottles, in disregard of his employer’s rule prohibiting children from being carried on milk floats. The boy was injured when he fell off a milk float as a result of the employee’s negligent driving. The trial judge dismissed the boy’s claim against the employer on the ground that the employee was acting outside the scope of his employment and that the boy was a trespasser on the float, but his decision was reversed by a majority of the Court of Appeal.

38.              Lord Denning, MR dealt with the matter briefly, holding that in taking the boy on the milk float the employee was still acting within the sphere of his employment. Scarman LJ considered the point at greater length, at pp 147-148:

“In words which have frequently been quoted both in the courts and in the universities, Salmond on Torts, 16th ed (1973), p 462, refers to the basis of vicarious liability for accidental damage as being one of public policy. That view is supported by quotations (dated no doubt, but still full of life) of a dictum of Lord Brougham and of another, 100 years or more earlier, of Sir John Holt. That it is “socially convenient and rough justice” to make an employer liable for the torts of his servant in the cases to which the principle applies, was recognised in Limpus v London General Omnibus Co, 1 H & C 526; see the judgment of Willes J at p 539. I think it important to realise that the principle of vicarious liability is one of public policy. It is not a principle which derives from a critical or refined consideration of other concepts in the common law, for example, the concept of trespass or indeed the concept of agency. No doubt in particular cases it may be relevant to consider whether a particular plaintiff was or was not a trespasser. Similarly, when, as I shall indicate, it is important that one should determine the course of employment of the servant, the law of agency may have some marginal relevance. But basically, as I understand it, the employer is made vicariously liable for the tort of his employee not because the plaintiff is an invitee, nor because of the authority possessed by the servant, but because it is a case in which the employer, having put matters into motion, should be liable if the motion which he has originated leads to damage to another. What is the approach which the cases identify as the correct approach in order to determine this question of public policy? First, … one looks to see whether the servant has committed a tort upon the plaintiff … The next question … is whether the employer should shoulder the liability for compensating the person injured by the tort … [I]t does appear to me to be clear, since the decision of Limpus v London General Omnibus Co, 1 H & C 526, that that question has to be answered by directing attention to what the servant was employed to do when he committed the tort that has caused damage to the plaintiff. The servant was, of course, employed at the time of the accident to do a whole number of operations. He was certainly not employed to give the boy a lift, and if one confines one’s analysis of the facts to the incident of injury to the plaintiff, then no doubt one would say that carrying the boy on the float - giving him a lift - was not in the course of the servant’s employment. But in Ilkiw v Samuels [1963] 1 WLR 991 Diplock LJ indicated that the proper approach to the nature of the servant’s employment is a broad one. He says, at p 1004: ‘As each of these nouns implies’ - he is referring to the nouns used to describe course of employment, sphere, scope and so forth - ‘the matter must be looked at broadly, not dissecting the servant’s task into its component activities - such as driving, loading, sheeting and the like - by asking: what was the job on which he was engaged for his employer? and answering that question as a jury would’.”

Lister v Hesley Hall Ltd

39.              In Lister the House of Lords was faced with the problem of the application of the doctrine of vicarious liability to the warden of a school boarding house who sexually abused the children in his care. The Salmond formula was stretched to breaking point. Even on its most elastic interpretation, the sexual abuse of the children could not be described as a mode, albeit an improper mode, of caring for them. Drawing on Scarman LJ’s approach, Lord Steyn (with whom Lords Hutton and Hobhouse agreed) spoke of the pitfalls of terminology and said that it was not necessary to ask whether the acts of sexual abuse were modes of doing authorised acts. He posed the broad question whether the warden’s torts was so closely connected with his employment that it would be just to hold the employers liable. He concluded that the employers were vicariously liable because they undertook the care of the children through the warden and he abused them. There was therefore a close connection between his employment and his tortious acts. To similar effect, Lord Clyde said that the warden had a general duty to look after the children, and the fact that he abused them did not sever the connection with his employment; his acts had to be seen in the context that he was entrusted with responsibility for their care, and it was right that his employers should be liable for the way in which he behaved towards them as warden of the house.

40.              In adopting the approach which he did, Lord Steyn referred to the judgment of McLachlin J in Bazley v Curry (1999) 174 DLR (4th) 45. McLachlin J summarised the public policy justification for imposing vicarious liability, at para 31, in a similar fashion to Holt and Scarman LJ:

“The employer puts in the community an enterprise which carries with it certain risks. When those risks materialize and cause injury to a member of the public despite the employer’s reasonable efforts, it is fair that the person or organisation that creates the enterprise and hence the risk should bear the loss.”

Compare Scarman LJ’s statement that “the employer, having put matters into motion, should be liable if the motion which he has originated leads to damage to another”. This thinking has been prominent in cases since Lister as the social underpinning of the doctrine of vicarious liability, but the court is not required in each case to conduct a retrospective assessment of the degree to which the employee would have been considered to present a risk. As Immanuel Kant wrote, “Out of the crooked timber of humanity, no straight thing was ever made.” The risk of an employee misusing his position is one of life’s unavoidable facts.

41.              In Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366, the House of Lords applied the Lister approach to vicarious liability in a case of commercial fraud. Lord Nicholls (with whom Lords Slynn and Hutton agreed) said:

“22.    … [I]t is a fact of life, and therefore to be expected by those who carry on businesses, that sometimes their agents may exceed the bounds of their authority or even defy express instructions. It is fair to allocate risk of losses thus arising to the businesses rather than leave those wronged with the sole remedy, of doubtful value, against the individual employee who committed the wrong. To this end, the law has given the concept of ‘ordinary course of employment’ an extended scope.

23.      If, then, authority is not the touchstone, what is? ... Perhaps the best general answer is that the wrongful conduct must be so closely connected with acts the partner or employee was authorised to do that, for the purpose of the liability of the firm or the employer to third parties, the wrongful act may fairly and properly be regarded as done by the partner while acting in the ordinary course of the firm’s business or the employee’s employment … (Original emphasis)

25.      This ‘close connection’ test focuses attention in the right direction. But it affords no guidance on the type or degree of connection which will normally be regarded as sufficiently close to prompt the legal conclusion that the risk of the wrongful act occurring, and any loss flowing from the wrongful act, should fall on the firm or employer rather than the third party who was wronged. …

26.      This lack of precision is inevitable, given the infinite range of circumstances where the issue arises. The crucial feature or features, either producing or negativing vicarious liability, vary widely from one case or type of case to the next. Essentially the court makes an evaluative judgment in each case, having regard to all the circumstances and, importantly, having regard to the assistance provided by previous court decisions.”

42.              The “close connection” test adumbrated in Lister and Dubai Aluminium has been followed in a line of later cases including several at the highest level: Bernard v Attorney General of Jamaica [2004] UKPC 47; [2005] IRLR 398, Brown v Robinson [2004] UKPC 56, Majrowski v Guy’s and St Thomas’s NHS Trust [2006] UKHL 34; [2007] 1 AC 224 and Various Claimants v Catholic Child Welfare Society [2012] UKHL 56; [2013] 2 AC 1 (“the Christian Brothers case”).

43.              In the Christian Brothers case Lord Phillips of Worth Matravers said at para 74 that it is not easy to deduce from Lister the precise criteria that will give rise to vicarious liability for sexual abuse (or, he might have added, other abuse), and that the test of “close connection” tells one nothing about the nature of the connection. However, in Lister the court was mindful of the risk of over-concentration on a particular form of terminology, and there is a similar risk in attempting to over-refine, or lay down a list of criteria for determining, what precisely amounts to a sufficiently close connection to make it just for the employer to be held vicariously liable. Simplification of the essence is more desirable.

The present law

44.              In the simplest terms, the court has to consider two matters. The first question is what functions or “field of activities” have been entrusted by the employer to the employee, or, in everyday language, what was the nature of his job. As has been emphasised in several cases, this question must be addressed broadly; see in particular the passage in Diplock LJ’s judgment in Ilkiw v Samuels [1963] 1 WLR 991, 1004 included in the citation from Rose v Plenty at para 38 above, and cited also in Lister by Lord Steyn at para 20, Lord Clyde at para 42, Lord Hobhouse at para 58 and Lord Millett at para 77.

45.              Secondly, the court must decide 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. To try to measure the closeness of connection, as it were, on a scale of 1 to 10, would be a forlorn exercise and, what is more, it would miss the point. The cases in which the necessary connection has been found for Holt’s principle to be applied are cases in which the employee used or misused the position entrusted to him in a way which injured the third party. Lloyd v Grace, Smith & Co, Peterson and Lister were all cases in which the employee misused his position in a way which injured the claimant, and that is the reason why it was just that the employer who selected him and put him in that position should be held responsible. By contrast, in Warren v Henlys Ltd any misbehaviour by the petrol pump attendant, qua petrol pump attendant, was past history by the time that he assaulted the claimant. The claimant had in the meantime left the scene, and the context in which the assault occurred was that he had returned with the police officer to pursue a complaint against the attendant.

46.              Contrary to the primary submission advanced on the claimant’s behalf, I am not persuaded that there is anything wrong with the Lister approach as such. It has been affirmed many times and I do not see that the law would now be improved by a change of vocabulary. Indeed, the more the argument developed, the less clear it became whether the claimant was advocating a different approach as a matter of substance and, if so, what the difference of substance was.

Blackpool Football Club Limited v DSN [2021] EWCA Civ 1352

per Stuart-Smith LJ: Vicarious liability: the applicable principles

50. The origins and historical development of the common law doctrine of vicarious liability have been reviewed by others in the recent past and it is not necessary to repeat that exercise here: see E v English Province of our Lady of Charity [2012] EWCA Civ 938, [2013] QB 722 at [19]-[21] per Ward LJ ["the English Province case"]; Mohamud v Wm Morrison Supermarkets plc [2016] UKSC 11, [2016] AC 660 at [10]-[38] ["Mohamud's case"].

51. By the second half of the last century, the question of vicarious liability arose predominantly where there was a conventional relationship of employer and employee, with vicarious liability being imposed on the employer for the torts of his employee in circumstances where a claimant was not in a position to show fault on the part of the employer. In the present case, with one exception, it is not necessary to give separate consideration to authorities involving agency or partnership. Thus, "in a case about vicarious liability, the focus was on two stages: (1) was there a true relationship of employer/employee between D2 and D1? (2) was D1 acting in the course of his employment when he committed the tortious act?": Various Claimants v Catholic Child Welfare Society [2012] UKSC 56, [2013] 2 AC 1 ["the Christian Brothers' case"] at [19]. I would add that it was and remains established that "if the employer has employed an independent contractor to do work on his behalf, the general rule is that the employer is not responsible for any tort committed by the contractor in the course of the execution of the work. Furthermore, since the employees of the contractor, whilst acting as such, stand in the same position as their employer, it is equally the case that the employer of the contractor is not liable for the torts committed by the contractor's employees.": see Clerk & Lindsell on Torts, 22nd Edition, 6-62 et seq.52. During the second half of the last century and the first decade of this, the courts:

"… developed the law of vicarious liability by establishing the following propositions. (i) It is possible for an unincorporated association to be vicariously liable for the tortious acts of one or more of its members: … . (ii) D2 may be vicariously liable for the tortious act of D1 even though the act in question constitutes a violation of the duty owed to D2 by D1 and even if the act in question is a criminal offence: … . (iii) Vicarious liability can even extend to liability for a criminal act of sexual assault: … . (iv) It is possible for two different defendants, D2 and D3, each to be vicariously liable for the single tortious act of D1: …": The Christian Brothers' case at [20].

53. We have been referred to five decisions of the Supreme Court and one of this Court since 2012 that have taken this development of the doctrine of vicarious liability further. Since, on any view, Mr Roper was not in a conventional employer/employee relationship with Blackpool FC, it is convenient to divide those decisions into ones in which the relationship between the tortfeasor and the defendant was a conventional employer/employee relationship and those in which it was not. The Supreme Court decisions in the first category are Mohamud's case, and Various Claimants v Wm Morrison Supermarkets plc [2020] UKSC 12, [2020] AC 989 ["Morrison 2"]. Those in the latter category are The Christian Brothers' case, Cox v Ministry of Justice [2016] UKSC 10, [2016] AC 660 ["Cox's case"], Various Claimants v Barclays Bank plc [2020] UKSC 13, [2020] AC 973 ["Barclays' case"]. In addition, we were referred to the recent decision of this court in BXB v Watch Tower and Bible Tract Society of Pennsylvania and anor [2021] EWCA Civ 356, [2021] 4 WLR 42 ["BXB's case"], which was not a conventional employer/employee case.

54. The single judgment in the Christian Brothers' case was delivered by Lord Phillips, with whom the other Justices agreed. The issue was whether the Christian Brothers, an unincorporated association, should be held vicariously liable for the torts of individual brothers working at a residential school in Market Weighton. The Claimants sued two groups of Defendants. The first group, known as "the Middlesbrough defendants", managed the school and entered into contracts of employment with individual brothers who worked there. The second group, known as "the De La Salle defendants", represented the institute to which individual brothers belonged. The De La Salle defendants did not enter into contracts of employment with the individual brothers who worked at the school but were bound to them (and vice versa) by the institute's rules, which imposed ties of loyalty and obedience that were even tighter than those imposed by a contract of employment: see [18], [58], [89].

55. The De La Salle defendants contended that because there were no contracts of employment entered into between the institute and individual brothers, and because the Middlesbrough defendants managed and controlled both the school and the brothers, vicarious liability should not be imposed on the institute. The Middlesbrough defendants submitted that the existence of an employer/employee relationship was not an essential prerequisite to the imposition of vicarious liability and that the closeness of the relationship between brothers and the institute, the fact that the brothers were sent out to further the object of the institute, namely to teach boys, and the fact that this created a risk of sexual abuse of boys by the brothers, sufficed to render the institute vicariously liable for the abuse committed by the brothers.

56. At [21] Lord Phillips identified the test for the imposition of vicarious liability as involving a synthesis of two stages. Stage 1 is to consider the relationship between D1 and D2 to see whether it is one that is capable of giving rise to vicarious liability. Stage 2 requires examination of the connection that links the relationship between D1 and D2 and the tortious act or omission of D1. It has become conventional to approach the issue adopting this two-stage test, recognising that resolution of the issue involves a synthesis of the two stages.

57. Lord Phillips addressed stage 1 at [34]-[61]. He dealt with legal policy and reasons that may make it fair just and reasonable to impose vicarious liability at [34]-[35] as follows:

"34.  … The policy objective underlying vicarious liability is to ensure, in so far as it is fair, just and reasonable, that liability for tortious wrong is borne by a defendant with the means to compensate the victim. Such defendants can usually be expected to insure against the risk of such liability, so that this risk is more widely spread. It is for the court to identify the policy reasons why it is fair, just and reasonable to impose vicarious liability and to lay down the criteria that must be shown to be satisfied in order to establish vicarious liability. Where the criteria are satisfied the policy reasons for imposing the liability should apply. As Lord Hobhouse of Woodborough pointed out in [Lister v Hesley Hall [2002] 1 AC 2015], para 60, the policy reasons are not the same as the criteria. One cannot, however, consider the one without the other and the two sometimes overlap.

35.  The relationship that gives rise to vicarious liability is in the vast majority of cases that of employer and employee under a contract of employment. The employer will be vicariously liable when the employee commits a tort in the course of his employment. There is no difficulty in identifying a number of policy reasons that usually make it fair, just and reasonable to impose vicarious liability on the employer when these criteria are satisfied: (i) the employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liability; (ii) the tort will have been committed as a result of activity being taken by the employee on behalf of the employer; (iii) the employee's activity is likely to be part of the business activity of the employer; (iv) the employer, by employing the employee to carry on the activity will have created the risk of the tort committed by the employee; (v) the employee will, to a greater or lesser degree, have been under the control of the employer."

58. The five policy reasons listed in [35] were, at this stage, identified as being criteria that make it fair just and reasonable to impose vicarious liability upon D2 when there is a relationship of employer/employee with D1. However, developing the significance of "control", identified above as a constituent part of criterion (v), Lord Phillips said at [36] that:

"Today it is not realistic to look for a right to direct how an employee should perform his duties as a necessary element in the relationship between employer and employee. … Thus the significance of control today is that the employer can direct what the employee does, not how he does it."

59. This broadening of the notion of control led to a discussion of control and the transfer of vicarious liability from [37]-[46], with the endorsement of the approach of Rix LJ in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151, [2006] QB 510. Rix LJ's starting point had been that the basis of vicarious liability was, generally speaking, that those who set in motion and profit from the activities of their employees should compensate those who are injured by such activities, even when performed negligently. He considered that what one was looking for when considering whether there should be a transfer of, or possible dual vicarious liability, was:

"a situation where the employee in question, at any rate for relevant purposes is so much a part of the work, business or organisation of both employers that it is just to make both employers answer for his negligence."

It will be noted that Rix LJ's approach tended towards what others have called the creation of "enterprise risk"; but he explained the circumstances in which liability might be imposed using phrases such as "an integral part of [the employer's] business" or "embedded in [the employer's] organisation": see [80]. In the words of Professor Bell in his case note "The basis of vicarious liability" (2013) 72 CLJ 17, 18, in such circumstances "the employer took the burden of an organisational relationship which he had undertaken for his own benefit."

60. Referring back to [35] of his judgment, Lord Phillips then said at [47] that:

"Where the defendant and the tortfeasor are not bound by a contract of employment, but their relationship has the same incidents, that relationship can properly give rise to vicarious liability on the ground that it is "akin to that between an employer and an employee"."

61. Having reviewed the decision of the Court of Appeal in the English Province case, where Ward LJ had based his decision on the conclusion that the relationship between a Catholic Priest and his Bishop was "akin to employment", Lord Phillips concluded his section on Stage 1 as follows:

"56.  In the context of vicarious liability the relationship between the teaching brothers and the institute had many of the elements, and all the essential elements, of the relationship between employer and employees. (i) The institute was subdivided into a hierarchical structure and conducted its activities as if it were a corporate body. (ii) The teaching activity of the brothers was undertaken because the provincial directed the brothers to undertake it. True it is that the brothers entered into contracts of employment with the Middlesbrough defendants, but they did so because the provincial required them to do so. (iii) The teaching activity undertaken by the brothers was in furtherance of the objective, or mission, of the institute. (iv) The manner in which the brother teachers were obliged to conduct themselves as teachers was dictated by the institute's rules.

57.  The relationship between the teacher brothers and the institute differed from that of the relationship between employer and employee in that: (i) The brothers were bound to the institute not by contract, but by their vows. (ii) Far from the institute paying the brothers, the brothers entered into deeds under which they were obliged to transfer all their earnings to the institute. The institute catered for their needs from these funds.

58.  Neither of these differences is material. Indeed they rendered the relationship between the brothers and the institute closer than that of an employer and its employees."

62. As others have pointed out, the factors listed by Lord Phillips in [56] do not replicate the features he had listed at [35]. Rather, the elements he identified in [56] demonstrated the closeness of the analogy between the relationships of an employer and his employee on the one hand and of the institute and the individual brothers on the other. The factors listed in [56] include elements of control in elements (ii) and (iv); and a modified approach to enterprise risk in element (iii) with its reference to the individual brothers furthering the "objective, or mission, of the institute". The ultimate conclusion was that the relationship between the brothers and the institute was closer than that of an employer and its employees – not least in relation to the power to control and direct. On this basis the policy reasons for imposing vicarious liability on an employer that Lord Phillips had identified in [35] of his judgment were at least equally applicable to the institute. It was therefore a justifiable incremental step to conclude that stage 1 of the test was satisfied despite the absence of an employer/employee relationship.

63. It is also convenient to mention at this stage that, perhaps reflecting its chequered past in the law of tort, the existence of a deep pocket has since been relegated as not usually being a principled basis for imposing vicarious liability: see Cox's case at [20].

64. Moving on to stage 2 at [62], Lord Phillips dealt briefly with vicarious liability for negligent acts:

"Where an employee commits a tortious act the employer will be vicariously liable if the act was done "in the course of the employment" of the employee. This plainly covers the situation where the employee does something that he is employed to do in a manner that is negligent. In that situation the necessary connection between his relationship with his employer and his tortious act will be established. Stage 2 of the test will be satisfied. The same is true where the relationship between the defendant and the tortfeasor is akin to that of an employer and employee. Where the tortfeasor does something that he is required or requested to do pursuant to his relationship with the defendant in a manner that is negligent, stage 2 of the test is likely to be satisfied."

65. This, however, led to the central issue:

"… sexual abuse can never be a negligent way of performing such a requirement. In what circumstances, then can an act of sexual abuse give rise to vicarious liability?"

66. Lord Phillips started his review of authority by revisiting the Canadian cases of Bazley v Curry (1999) 174 DLR (4th) 45 and John Doe v Bennett [2004] 1 SCR 436. At [64] he identified two particular principles of policy underpinning Bazley, which was a case involving an employer/employee relationship, as (i) enterprise risk: "where an employer puts into the community an enterprise carrying with it certain risks and those risks materialise and cause injury it is fair that, having created the enterprise and the risk, the employer should bear the loss"; and (ii) deterrence; and he identified the test that emerged from Bazley as being:

"there must be a strong connection between what the employer was asking the employee to do (the risk created by the employer's enterprise) and the wrongful act. It must be possible to say that the employer significantly increased the risk of the harm by putting the employee in his or her position and requiring him to perform the assigned task." [emphasis in the original]

67. A similar theme emerged from Lord Phillips' review of Lister v Hesley Hall Ltd [2001] UKHL 22, [2002] 1 AC 215, in the course of which he cited from [65] of Lord Millett's judgment that:

"the more general idea that a person who employs another for his own ends inevitably creates a risk that the employee will commit a legal wrong. If the employer's objectives cannot be achieved without a serious risk of the employee committing the kind of wrong which he has in fact committed, the employer ought to be liable. The fact that his employment gave the employee the opportunity to commit the wrong is not enough to make the employer liable. He is liable only if the risk is one which experience shows is inherent in the nature of the business."

68. In Lister both Lord Hobhouse (at [62]) and Lord Millett (at [82]) drew the distinction between the position of an employee to whom the care of the children was entrusted, for whose sexual abuse the employer would be held vicariously liable, and an employee with other responsibilities, such as a groundsman, for whose sexual abuse the employer would not. At [82], as noted by Lord Phillips at [72] of his judgment in the Christian Brothers' case, Lord Millett "placed importance on the employee's act being an abnegation of a specific duty imposed upon him by his employment," in a passage that remains relevant:

"In the present case the warden's duties provided him with the opportunity to commit indecent assaults on the boys for his own sexual gratification, but that in itself is not enough to make the school liable. The same would be true of the groundsman or the school porter. But there was far more to it than that. The school was responsible for the care and welfare of the boys. It entrusted that responsibility to the warden. He was employed to discharge the school's responsibility to the boys. For this purpose the school entrusted them to his care. He did not merely take advantage of the opportunity which employment at a residential school gave him. He abused the special position in which the school had placed him to enable it to discharge its own responsibilities, with the result that the assaults were committed by the very employee to whom the school had entrusted the care of the boys."

69. This passage and the passage cited above from [65] of Lord Millett's judgment establish two important points. First, the fact that an employer's enterprise creates a foreseeable risk and gives the employee the opportunity to commit sexual abuse is not sufficient to justify the imposition of vicarious liability on the employer. Second, the additional feature that justifies the distinction between the groundsman and the warden of the residential home is that the warden has been employed to discharge the school's responsibilities to the children who have been entrusted by the employer to his care.

70. The reasoning in Lister, which was an abuse case where the tortfeasor was in an employer/employee relationship, was applied in a commercial context by Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48, [2003] 2 AC 366, which concerned the vicarious liability of a firm of solicitors for the allegedly dishonest conduct of a partner. Lord Phillips at [74] referred to Lord Nicholls' formulation of legal policy; but it is not necessary to set it out again here.

71. Having reviewed further authorities, Lord Phillips discussed them at [83]-[87], summarising his approach to stage 2 in cases not involving an employer/employee relationship as follows:

"84. What has weighed with the courts has been the fact that the relationship has facilitated the commission of the abuse by placing the abusers in a position where they enjoyed both physical proximity to their victims and the influence of authority over them both as teachers and as men of God.

85.  The precise criteria for imposing vicarious liability for sexual abuse are still in the course of refinement by judicial decision. Sexual abuse of children may be facilitated in a number of different circumstances. There is currently concern at the possibility that widespread sexual abuse of children may have occurred within the entertainment industry. This case is not concerned with that scenario. It is concerned with the liability of bodies that have, in pursuance of their own interests, caused their employees or persons in a relationship similar to that of employees, to have access to children in circumstances where abuse has been facilitated.

86.  Starting with the Canadian authorities a common theme can be traced through most of the cases to which I have referred. Vicarious liability is imposed where a defendant, whose relationship with the abuser put it in a position to use the abuser to carry on its business or to further its own interests, has done so in a manner which has created or significantly enhanced the risk that the victim or victims would suffer the relevant abuse. The essential closeness of connection between the relationship between the defendant and the tortfeasor and the acts of abuse thus involves a strong causative link.

87.  These are the criteria that establish the necessary "close connection" between relationship and abuse. I do not think that it is right to say that creation of risk is simply a policy consideration and not one of the criteria. Creation of risk is not enough, of itself, to give rise to vicarious liability for abuse but it is always likely to be an important element in the facts that give rise to such liability."

72. To my mind, the significant features of this formulation go beyond the simple requirement of a "strong" or "close" connection between the risk created by the employer's enterprise and the wrongful act. In addition, the formulation involves (a) "placing" the abuser in their position, (b) using them to carry on its business, and (c) thereby significantly increasing the risk created by the employer's enterprise. Both (a) and (b) imply a degree of control and direction of the abuser by the "employer".

73. Applying those principles to the facts of the case, Lord Phillips held at [88] that "both the necessary relationship between the brothers and the institute and the close connection between that relationship and the abuse committed at the school have been made out." In summarising the factors that supported that conclusion at [89] – [93], he included:

i) The relationship between the brothers and the institute was much closer to that of employment than the relationship between the priest and the bishop in the English Province case;

ii) The business and mission of the institute was the common business and mission of every brother who was a member of it;

iii) The business was the provision of a Christian education to boys. It was to achieve that mission that the brothers joined and remained members of the institute;

iv) The relationship between the institute and the brothers enabled the institute to place the brothers in teaching positions and, in particular, in the position of headmaster of the school. The running of the school was largely carried out by the headmaster. There was thus a very close connection between the relationship between the brothers and the institute and employment of the brothers as teachers in the school;

v) The boys who lived in the school were triply vulnerable because they were children in a school, were virtually prisoners in the school and their personal histories made it unlikely that they would be believed if they attempted to disclose what was happening to them;

vi) The brother teachers were placed in the school (by the institute) to care for the educational and religious needs of these pupils. Abusing the boys in their care provided the necessary close connection between the abuse and the relationship between the brothers and the institute that gives rise to vicarious liability on the part of the latter;

vii) There was a very close connection between the brother teachers' employment in the school and the sexual abuse that they committed;

viii) The risk of abuse was recognised in such circumstances. The placement of brother teachers in the residential school where they also resided greatly enhanced the risk of abuse by them if they had a propensity for such misconduct.

74. In the light of Lord Phillips' formidable analysis it is unsurprising that little attention was paid to the distinctions between an employer/employee relationship, where vicarious liability would typically be imposed, and the relationship of employer and independent contractor, where typically it would not. The only reference was at [36] where the right to direct the manner in which an employee should do his work was identified as one of the earlier indicia of a "master and servant" relationship, but put somewhat to one side as a necessary prerequisite to the relationship of employer and employee: see [58] above. However, as the summary that I have set out above shows, the element of control was central to Lord Phillips' analysis and conclusion. The institute's control of the individual brothers was complete: it directed the individual brothers to teach at the school (i.e. what they should do) and dictated their conduct when there (i.e. how they should do it): see [61] above.

75. Cox's case was concerned not with sexual abuse but with the vicarious liability of the prison service for personal injuries caused by negligence on the part of a prisoner working in the prison kitchen. It was primarily concerned with stage 1. Mohamud's case, judgment in which was handed down on the same day, primarily concerned stage 2.

76. The judgment of Lord Reed JSC in Cox's case, with whom the other members of the Supreme Court agreed, built upon Lord Phillips' reasoning in the Christian Brothers' case. In doing so it provided clarification and development. One such clarification was in relation to control; a related development was the significance to be attached to the assigning of work by D2 to D1, as appears from the references below.

77. Referring to the fifth of the factors mentioned by Lord Phillips at [35] of the Christian Brothers' case – that the tortfeasor will, to a greater or lesser degree, have been under the control of the defendant – Lord Reed said at [21]:

"the ability to direct how an individual did his work was sometimes regarded as an important test of the existence of a relationship of master and servant, and came to be treated at times as the test for the imposition of vicarious liability. But it is not realistic in modern life to look for a right to direct how an employee should perform his duties as a necessary element in the relationship between employer and employee; nor indeed was it in times gone by, if one thinks for example of the degree of control which the owner of a ship could have exercised over the master while the ship was at sea. Accordingly, as Lord Phillips PSC stated, the significance of control is that the defendant can direct what the tortfeasor does, not how he does it. So understood, it is a factor which is unlikely to be of independent significance in most cases. On the other hand, the absence of even that vestigial degree of control would be liable to negative the imposition of vicarious liability."

78. This observation was made in the dual context of (a) the development of the modern test of the existence of a relationship of master and servant and (b) the relationship in Cox's case not being one of master and servant or employer/employee but, as was being argued, a relationship "akin to employment." I understand Lord Reed in this passage to be saying that the presence or absence of an ability to direct how an individual did his work is unlikely to be of independent significance in most cases. The last sentence, to my mind, is a clear reminder that the presence or (particularly) absence of control is a material consideration for a court deciding whether or not to impose strict vicarious liability upon D2. It is, in my view, always to be borne in mind as a potentially material consideration when deciding whether to extend vicarious liability by incremental analogy from the safe confines of an employer/employee relationship. This is made clear by the last sentence of the passage.

79. Having identified that the second, third and fourth of Lord Phillips' five factors are interrelated, Lord Reed provided his own summation of "stage 1" principle at [24] as follows:

"The result of this approach is that a relationship other than one of employment is in principle capable of giving rise to vicarious liability where harm is wrongfully done by an individual who carries on activities as an integral part of the business activities carried on by a defendant and for its benefit (rather than his activities being entirely attributable to the conduct of a recognisably independent business of his own or of a third party), and where the commission of the wrongful act is a risk created by the defendant by assigning those activities to the individual in question."

80. Lord Reed developed this statement of principle at [29]-[30] as follows:

"29.  It is important, however, to understand that the general approach which Lord Phillips PSC described is not confined to some special category of cases, such as the sexual abuse of children. It is intended to provide a basis for identifying the circumstances in which vicarious liability may in principle be imposed outside relationships of employment. By focusing upon the business activities carried on by the defendant and their attendant risks, it directs attention to the issues which are likely to be relevant in the context of modern workplaces, where workers may in reality be part of the workforce of an organisation without having a contract of employment with it, and also reflects prevailing ideas about the responsibility of businesses for the risks which are created by their activities. It results in an extension of the scope of vicarious liability beyond the responsibility of an employer for the acts and omissions of its employees in the course of their employment, but not to the extent of imposing such liability where a tortfeasor's activities are entirely attributable to the conduct of a recognisably independent business of his own or of a third party. An important consequence of that extension is to enable the law to maintain previous levels of protection for the victims of torts, notwithstanding changes in the legal relationships between enterprises and members of their workforces which may be motivated by factors which have nothing to do with the nature of the enterprises' activities or the attendant risks.

30.  It is also important not to be misled by a narrow focus on semantics: for example, by words such as "business", "benefit", and "enterprise". The defendant need not be carrying on activities of a commercial nature: that is apparent not only from [the English Province case] and the "Christian Brothers" case …, but also from the long-established application of vicarious liability to public authorities and hospitals. It need not therefore be a business or enterprise in any ordinary sense. Nor need the benefit which it derives from the tortfeasor's activities take the form of a profit. It is sufficient that there is a defendant which is carrying on activities in the furtherance of its own interests. The individual for whose conduct it may be vicariously liable must carry on activities assigned to him by the defendant as an integral part of its operation and for its benefit. The defendant must, by assigning those activities to him, have created a risk of his committing the tort. As [Viasystems, the English Province case and the Christian Brothers' case] show, a wide range of circumstances can satisfy those requirements."

81. Although Cox's case was primarily concerned with stage 1, the synthesis of the two stages, to which Lord Phillips had referred at [21] of the Christian Brothers' case is also apparent in this passage. The influence of Rix LJ's approach in Viasystems is clear in the references to an individual carrying on activities "as an integral part of the business activities carried on by a defendant" and to the realities of modern workplaces "where workers may in reality be part of the workforce of an organisation without having a contract of employment with it", while maintaining the distinction between such circumstances and those where "a tortfeasor's activities are entirely attributable to the conduct of a recognisably independent business of his own or of a third party."

82. The concept of assignment reappeared in [31] where Lord Reed said that what had weighed with the court in the Christian Brothers' case was that

"the abusers were placed by the organisations in question, as part of their mission, in a position in which they committed a tort whose commission was a risk inherent in the activities assigned to them."

This observation incorporates both the notion of enterprise risk and also the notion of control inherent in the power to "assign" activities, which are also to be found in [24] of the Lord Reed's judgment: see above at [79]. It combines elements of "using" the abuser by "placing" them in a position which gives them physical proximity to and influence over their victims: see [71]-[72] above.

83. Mohamud's case was primarily concerned with stage 2. It is sufficient to note two points. First, the Supreme Court was invited to depart from the "close connection" test established by Lister and to adopt a broader test of "representative capacity". It was submitted that, in the case of a tort committed by an employee, the decisive question should be "whether a reasonable observer would consider the employee to be acting in the capacity of a representative of the employer at the time of committing the tort." This submission was rejected: see [46] of the judgment of Lord Toulson.

84. Second, Lord Toulson provided his own summary of the established principles where there was a relationship of employer and employee as follows:

"44.  In the simplest terms, the court has to consider two matters. The first question is what functions or "field of activities" have been entrusted by the employer to the employee, or, in everyday language, what was the nature of his job. As has been emphasised in several cases, this question must be addressed broadly; ….

45.  Secondly, the court must decide 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. To try to measure the closeness of connection, as it were, on a scale of 1 to 10, would be a forlorn exercise and, what is more, it would miss the point. The cases in which the necessary connection has been found for Holt CJ's principle to be applied are cases in which the employee used or misused the position entrusted to him in a way which injured the third party. Lloyd v Grace, Smith & Co [1912] AC 716, Pettersson v Royal Oak Hotel Ltd [1948] NZLR and Lister v Hesley Hall Ltd were all cases in which the employee misused his position in a way which injured the claimant, and that is the reason why it was just that the employer who selected him and put him in that position should be held responsible. By contrast, in Warren v Henlys Ltd [1948] 2 All ER 935 any misbehaviour by the petrol pump attendant, qua petrol pump attendant, was past history by the time that he assaulted the claimant. The claimant had in the meantime left the scene, and the context in which the assault occurred was that he had returned with the police officer to pursue a complaint against the attendant."

85. Three points should be noted arising from this passage. First, the substitution of a "sufficient" for a "strong" or "close connection" was seen by some as a relaxation of the previous test, which was subsequently reversed by Morrison 2: see below. Second, I am not alone in finding the distinguishing of the facts in Warren v Henlys from the facts of Mohamud's case less than fully convincing; but that does not affect the principle that, in an employer/employee case, there must be a sufficient (i.e. strong/close) connection between the position in which he was employed and the employee's wrongful conduct. The decided cases show that this second question is highly fact-sensitive and requiring of detailed scrutiny. Where it is proposed to extend the imposition of vicarious liability beyond its traditional bounds, the rigour to be attached to the second question (as well as to the first) must, in my judgment be even greater because notions of entrusting functions, assigning work, and the extent of the "employer's" control are likely to be more fluid than in a conventional employer/employee relationship. Third, and quite apart from the distinction between those relationships that are akin to employment on the one hand and akin to independent contracting on the other, it is always to be remembered that it is not sufficient simply to provide the "employee" with the opportunity to commit the tort.

86. We were not referred by counsel to Armes v Nottinghamshire County Council [2017] UKSC 60, [2018] AC 355, but it cannot be ignored. The Defendant local authority, having taken the claimant into care, was held to be vicariously liable to the claimant for physical and sexual abuse inflicted on her by foster parents to whose care the local authority had entrusted her. Giving the judgment of the majority (Lord Hughes dissenting), at [59]-[63] Lord Reed considered that the five policy reasons from [35] of the Christian Brothers' case pointed towards the imposition of vicarious liability. In summary:

i) The relevant activity of the local authority was the care of children who had been committed to their care. They were under a statutory duty to care for such children and, in order to discharge that duty, they recruited, selected and trained persons who were willing to accommodate and look after the children. The foster parents were provided with expenses and necessary equipment as well as in-service training. The foster parents were expected to carry out their duties in co-operation with the local authority's social workers; they were involved in the local authority's decision making concerning the children; and they were expected to co-operate with arrangements about contact with the children's families. They could therefore not be regarded as carrying on an independent business of their own: see [59];

ii) Though the picture was complex, "as a whole it points towards the conclusion that the foster parents provided care to the child as an integral part of the local authority's organisation of its childcare services." It was "impossible to draw a sharp line between the activity of the local authority, who were responsible for the care of the child and the promotion of her welfare, and that of the foster parents, whom they recruited and trained, and with whom they placed the child, in order for her to receive care in the setting which they considered would best promote her welfare." In those circumstances it could properly be said that the torts committed against the claimant were committed by the foster parents "in the course of an activity carried on for the benefit of the local authority": see [60];

iii) Considering the issue of risk creation, "the local authority's placement of children in their care with foster parents and the children, in circumstances where close control cannot be exercised by the local authority, and so renders the children particularly vulnerable to abuse. … [I]t is relevant to the imposition of vicarious liability that a particular risk of abuse is inherent in [that placement]": see [61];

iv) There were features of control, monitoring, supervision and approval such that "although the foster parents controlled the organisation and management of their household to the extent permitted by the relevant law and practice, and dealt with most aspects of the daily care of the children without immediate supervision, it would be mistaken to regard them as being in much the same position as ordinary parents. … [T]he local authority exercised a significant degree of control over both what the foster parents did and how they did it, in order to ensure that the children's needs were met.": see [62];

v) The principal tortfeasor was not worth suing and the local authority was able to compensate the victim of the tort: see [63].

87. The decision in Armes has subsequently been described as "difficult". However, it can be seen from the summary I have just set out that the most important considerations leading to the imposition of vicarious liability included (a) the specific nature of the local authority's relevant activity, namely discharging its statutory duty to care for the claimant, (b) the measure of control exercised by the local authority over the foster carers, (c) the fact that the local authority chose to place the claimant with the foster carers, (d) the decision to place the claimant with the foster carers represented the local authority's decision about how to discharge its relevant activity and its duty to the claimant, and (e) that decision gave rise to the recognised enterprise risk of physical and sexual abuse. Standing back, these features can justify the conclusion that the foster parents were integral to the local authority's relevant activity and (perhaps less obviously) that the relationship between the local authority and the foster carers could be treated as "akin to employment" and as capable of giving rise to the imposition of vicarious liability.

88. The decisions in Barclays' case and Morrison No 2 were handed down on the same day, which was after judgment had been given by the Judge in the present case. Barclays' case was a case of sexual abuse, this time committed by a doctor to whom potential employees of the bank were referred for medical examinations. It was primarily concerned with stage 1. Morrison No 2 was primarily concerned with stage 2. They followed widely expressed concerns, both by academic commentators and the High Court of Australia, about the potential for unprincipled expansion of the doctrine of vicarious liability in the light of Mohamud's case and Armes. As set out below, both Barclays' case and Morrison No 2 adopted a more restrictive approach than had been apparent from Mohamud and Armes.

89. At [27] of Barclays' case, Lady Hale, with whom the other members of the Court agreed, said:

"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 [the Christian Brothers' case, Cox's case] 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."

90. As a matter of principle, Lady Hale's last sentence in this passage is applicable both to stage 1 and to stage 2. Despite the fact that it has now been re-confirmed that Lord Phillips' five factors are concerned with stage 1 (see [94] below), it is entirely possible for there to be a relationship between D1 and D2 which would in principle be capable of giving rise to vicarious liability but for the tortious acts in question to fail to satisfy stage 2 because, when committing the acts, D2 is acting "on his own independent business" or, as used to be said, "on a frolic of his own": see Joel v Morison (1834) 6 C&P 501, 503 per Parke B, and Dubai Aluminium at [32]. Hence the need for stage 2.

91. On the facts of Barclays' case the doctor provided a vital service that was integral to the bank's recruitment process; but he was not "anything close to an employee" ([28]). Among the features of the case that led to that conclusion were that he was "not paid a retainer that might have obliged him to accept a certain number of referrals from the bank. He was paid a fee for each report. He was free to refuse an offered examination should he wish to do so. … He was in business on his own account as a medical practitioner with a portfolio of patients and clients. One of those clients was the bank." The imposition of strict vicarious liability was not appropriate.

92. In Morrison No 2 an employee was provided with confidential data by his employer for the sole purpose of passing it to the company's auditors, which he fulfilled. He then malevolently published it on the internet with the intention of damaging his employer. The Supreme Court took the opportunity to correct what were perceived to be misunderstandings of the judgment of Lord Toulson in Mohamud's case. In doing so it applied something of a brake on the more expansionist approaches to the imposition of vicarious liability.

93. When addressing the stage 2 application of the close connection test, Lord Reed, with whom the other members of the court agreed, said at [23]:

"As Lord Phillips noted in [the Christian Brothers case], paras 83 and 85, the close connection test has been applied differently in cases concerned with the sexual abuse of children, which cannot be regarded as something done by the employee while acting in the ordinary course of his employment. Instead, the courts have emphasised the importance of criteria that are particularly relevant to that form of wrongdoing, such as the employer's conferral of authority on the employee over the victims, which he has abused."

94. Lord Reed was at pains to emphasise that Lord Toulson in Mohamud's case had not intended to effect a change in the law of vicarious liability; and, specifically, that there had been no departure from the close connection test as laid down by the House of Lords at [22]-[26] of Dubai Aluminium, which he summarised authoritatively at [23] and [25] of his judgment:

"… in a case concerned with vicarious liability arising out of a relationship of employment, the court generally has to decide whether the wrongful conduct was so closely connected with acts the employee was authorised to do that, for the purposes of the liability of his employer, it may fairly and properly be regarded as done by the employee while acting in the ordinary course of his employment."

95. At [31] Lord Reed identified four short points of principle of particular importance:

"First, the disclosure of the data on the internet did not form part of Skelton's functions or field of activities, in the sense in which those words were used by Lord Toulson JSC: it was not an act which he was authorised to do, as Lord Nicholls put it. Secondly, the fact that the five factors listed by Lord Phillips in [the Christian Brothers case], para 35 were all present was nothing to the point. Those factors were not concerned with the question whether the wrongdoing in question was so connected with the employment that vicarious liability ought to be imposed, but with the distinct question whether, in the case of wrongdoing committed by someone who was not an employee, the relationship between the wrongdoer and the defendant was sufficiently akin to employment as to be one to which the doctrine of vicarious liability should apply. Thirdly, although there was a close temporal link and an unbroken chain of causation linking the provision of the data to Skelton for the purpose of transmitting it to KPMG and his disclosing it on the internet, a temporal or causal connection does not in itself satisfy the close connection test. Fourthly, the reason why Skelton acted wrongfully was not irrelevant: on the contrary, whether he was acting on his employer's business or for purely personal reasons was highly material."

The first and second of these points are directly relevant to stage 1. The third and fourth are relevant to stage 2, though the fourth may be said to be relevant to a synthesis of both stages 1 and 2.

96. In BXB's case the Court of Appeal affirmed the imposition of vicarious liability upon what may loosely be described as the unincorporated organisation of the Jehovah's Witnesses in respect of the rape of the claimant by one of the elders of the organisation. Nicola Davies LJ at [81] found the stage 1 question to be satisfied by close analogy with the facts of the Christian Brothers' case:

"The elders were the chief conduit of the guidance and teachings of Jehovah's Witnesses, they were not carrying on business on their own account. Elders were integral to the organisation, the nature of their role was directly controlled by it and by its structure. The Judge was entitled to conclude that the relationship between elders and the Jehovah's Witnesses was one that could be capable of giving rise to vicarious liability."

The other members of the Court, Bean LJ and Males LJ agreed in the result and with Nicola Davies LJ's reasons.

97. Turning to stage 2, at [89] Nicola Davies LJ found that three findings of the Judge below provided the basis for satisfying the test of close connection because of the tortfeasor's "position as an elder, his role and authority within the organisation and the power which it engendered so as to make it just and reasonable for the defendants to be held vicariously liable for his [tort]". Bean LJ agreed in the result and with Nicola Davies LJ's reasons. Males LJ gave a concurring judgment in which he identified four key factors which led him to agree that vicarious liability should be imposed. First, ordinary members of the congregation were required to be obedient and submissive to the elders and not to question their conduct or instructions. Second, the elders of the congregation knew of and permitted sexually inappropriate conduct on the part of the tortfeasor. Third, when the claimant had raised the question of that inappropriate conduct with a senior and highly respected elder (who happened to be the tortfeasor's father), his response was that the claimant and her husband should give the tortfeasor additional support as good Jehovah's Witnesses. This advice (which in practical terms amounted to an instruction) was given in the knowledge of the tortfeasor's sexually inappropriate conduct and capacity for violence. Fourth, had that advice not been given, the claimant and her husband would have cut off contact with the tortfeasor. He concluded that the rape occurred because of the tortfeasor's status as an elder and because the claimant had been put in a position where the risk of sexual abuse of some kind was apparent.

98. Before leaving these authorities, it is convenient to refer to the speech of Lord Steyn in giving the advice of the Board in Bernard v Attorney General for Jamaica [2004] UKPC 47, [2005] IRLR 398, to which reference was made at [77] to the Christian Brothers' case. At [21] Lord Steyn pointed to the fact that vicarious liability is a principle of strict liability, which "underlines the need to keep the doctrine within clear limits." At [23] he repeated that "the policy rationale on which vicarious liability is founded is not a vague notion of justice between man and man. It has clear limits. … The principle of vicarious liability is not infinitely extendable."

99. With Lord Steyn's words in mind, it is apposite to review the nature of the extension of principle that has been achieved by the authorities to which we have been referred. The employer/employee cases have concentrated upon the stage 2 requirement because the fact of the employer/employee relationship is of itself sufficient to satisfy the stage 1 requirement. Where an employer/employee relationship is lacking there is a broad spectrum from those which are, in reality, only technically different from a conventional employer/employee relationship to those which are readily identified as being either true independent contractor/employer relationships or relationships that have essentially the same characteristics.

100.                   The scope of the phrase "akin to employment" is not capable of precise definition, but was used by Lady Hale at [27] of Barclays' case in an apparently binary categorisation, asking "whether the tortfeasor is carrying on business on his own account or whether he is in a relationship akin to employment with the defendant." Lady Hale evidently recognised that the boundaries between these categories are indefinable; hence the need to resort to Lord Phillips' five "incidents" in doubtful cases, to help "in identifying a relationship which is sufficiently analogous to employment to make it fair, just and reasonable to impose vicarious liability."

101.                   Even Lord Phillips' five incidents cannot be taken as providing definitive outcomes, not least because they do not purport to be an exhaustive catalogue by reference to which hard-edged boundaries can be established. It is, however, material that the journey towards extending the scope of relationships where vicarious liability should be imposed beyond conventional employer/employee relationships is substantially based upon the approach of Rix LJ to dual vicarious liability in Viasystems and the approach of the Canadian courts, with particular reference to Bazley v Curry, which have as their hallmarks features of control, enterprise risk and integration of the tortfeasor into the business. Where the relationship is such that the "employer" is not even in a position to direct what the tortfeasor shall do, as Lord Reed held at [21] of Cox's case, "the absence of even that vestigial degree of control would be liable to negative the imposition of vicarious liability." The same idea is implicit in Lord Reed's reference (at [24] of Cox's case) to the defendant creating a risk by assigning particular business activities to the tortfeasor: see also [31] of Cox's case.

102.                   Questions of vicarious liability will generally not arise unless the tortfeasor can be described as doing something for, or for the benefit of, the "employer" or their enterprise. That will therefore seldom be a determinative characteristic. More is required, both at stage 1 and stage 2, than that the "employer" has engaged the tortfeasor to carry out work which gave them the opportunity to commit the tortious acts in question. To my mind, the authorities suggest that it is the combination of the creation of enterprise risk inherent in the employer's "business", combined with the measure of control (if only in assigning the tortfeasor to roles that significantly enhance that risk), that will frequently provide the touchstone for the synthesis of stage 1 and stage 2. That of itself necessitates a close examination of the relationship between the tortfeasor and the person upon whom vicarious liability may be imposed, both when addressing whether their relationship is one which is capable of giving rise to vicarious liability and when considering whether the connection that links the relationship between D1 and D2 and the tortious act or omission of D1 is sufficient to justify the imposition of vicarious liability on the facts of the particular case.

103.                   I would add that there is a risk that the phrase "integral to" may be used loosely in circumstances where it adds little or nothing to the observation that the primary tortfeasor has been performing one or more functions that are beneficial to the "employer's" enterprise. To my mind, there is a strand running through the cases from Viasystems onwards which suggests that what one should look for is not merely a beneficial involvement with (or for) the "employer's" enterprise but a real degree of integration of the primary tortfeasor into the employer's business or relevant activity. This is not capable of hard-edged definition in advance; but it may in appropriate cases provide an additional marker when seeking to distinguish between relationships that are properly to be regarded as "akin to employment" and those that are not. Integration in this sense may be seen to be present on the facts of the Christian Brothers' case, Cox's case, Armes and BXB but to be absent Barclays' case.

104.                   As has been recognised on numerous occasions, stages 1 and 2 are not susceptible to a "tick-box" approach; nor do the statements of principle to which I have referred provide a precise definition that can simply be applied so as to give a ready answer when the question of vicarious liability arises beyond the safe confines of an employer/employee relationship. It is for that reason that the Court is enjoined to adopt the common law approach of comparison with previous decided cases with a view to taking incremental steps where that may be appropriate: see Dubai Aluminium at [26] per Lord Nicholls, and Morrison 2 at [24] per Lord Reed. NOTES


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