Whose liability is it anyway?

Posted on 05 December 2018

Whose liability is it anyway?

Last month in the case of Bellman v Northampton Recruitment Ltd [2018] EWCA Civ 2214, the Court of Appeal decided that an employer in the recruitment industry could be held vicariously liable for an assault committed by an inebriated employee in the early hours of the morning. The assault took place long after the work event had ended and once taxis had returned employees to their hotel. The decision has left some employers feeling exposed as the season of merriment commences.

The High Court had earlier decided that the self-funded, late night drinking session was entirely independent of the earlier work event and was not directly connected to the employer's recruitment business. As such, it concluded the employer could not be held liable for what happened next. However, the Court of Appeal overturned that decision, instead finding that the employer could be held vicariously liable for the assault which caused the victim to suffer a serious brain injury.

Why? As always, it is important to look at the facts:

  • The employee who committed the assault was the Managing Director and deemed to be "the directing mind" of the business;
  • The attack took place in the hours immediately after the party (organised and paid for by the Managing Director for his staff and their partners);
  • The scene of the incident was the bar of the hotel where "revellers" were staying (at the employer's expense);
  • The incident occurred after a disagreement broke out about work related issues; and
  • The Managing Director then subjected those present to an extended account of the nature and extent of his authority within the business, which then led to the assault.

The Court of Appeal held that the attack arose out of the Managing Director's misuse of the position entrusted to him as the head of that business. The Managing Director was not simply a fellow reveller; he was present by virtue of his position within the business and so the fact that the attack happened after the work party had finished was not enough to sever that connection.

The decision highlights a growing trend in such cases. In particular, it follows two previous decisions involving the supermarket chain WM Morrison's.

  • The first Supreme Court decision from 2016 involved an unprovoked assault on a customer by a kiosk assistant in a petrol station forecourt. In that case the Court looked at the field of activities of the Kiosk worker and the connection between those activities and his wrongdoing. The court found that the employee's job was to attend to customers and respond to their inquiries. The assault occurred in the course of those duties when responding to the customer on the forecourt.
  • The second case from earlier this year involved the much publicised data breach by the disgruntled ex IT worker. The worker in question stole employees' personal data using a USB stick and (at home) uploaded the information on the internet using another employee's ID. The ex-employer was given a custodial sentence in criminal proceedings. However, in separate civil proceedings, the employer was held to be vicariously liable on appeal for the employee's acts – even though the employee had deliberately sought to harm his employer. The Supreme Court found that those acts formed a sequence of planned events leading to the commission of the wrongdoing for which the employer could be liable. 

The good news for employers is that the Bellman decision is unlikely to open the floodgates. The Court of Appeal was keen to emphasise that its decision was not authority for the proposition that employers effectively underwrite the violent or other tortious acts of their employees. It suggested the facts of the case were unusual and that liability would not arise merely because of an argument about work matters between colleagues where one was more senior than the other.

However, these comments are unlikely to be particularly reassuring for employers conducting risk assessments or reviewing the adequacy of their insurance arrangements.

In both of the Morrison cases and the Bellman case, public policy considerations relating to the uninsured victims of these unfortunate events appear to be a significant factor in determining questions of legal liability. To an extent, the Court of Appeal's reference to social justice moves the debate away from pure legal analysis. Employers should consider:

  • reviewing insurance and looking carefully at any exclusions and limitations;
  • putting policies in place relating to behaviour on and offsite at work events;
  • training staff on conduct policies; and
  • operating fair, swift and effective disciplinary processes in respect of any breach.

As we head into the Christmas party season, it would be wise to act sooner rather than later.

Other Decisions

Facts Liable/Not Liable

Reasons

Independent medical professional appointed by the employer to conduct pre-employment health screenings sexually assaulted group of female employees.

Employer Liable Medical professional acting for employer's benefit and the procedure was as an integral part of the employer's on-boarding procedure
Prisoner working in the kitchen for a nominal wage injured a civilian employee. MOJ Liable Liable despite prisoner not being an employee.
Bouncer supplied to a nightclub by a third party contractor seriously injured customer of nightclub. Nightclub Liable

The club effectively controlled the bouncer's actions and took the benefit of his services. Therefore it also had to accept the burden of his actions.

Employee of contractor's sub-contractor causes damage when installing ventilation system. Both contractor and sub-contractor were equally liable. As both exercised control over the employee and could give him directions, both were liable for his actions.

 

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