Are employers liable for abuse committed by their employees?

In general terms, the principle of vicarious liability is simple: an employer will be liable for the damage done by its employees committed in the course of their employment, irrespective of whether the employer has done any wrong itself. Vicarious liability will also arise in respect of relationships akin to employment.

In practice, however, things are rarely as simple as that, especially when it comes to the scope of when an employer will be liable. Over recent years, the boundaries of vicarious liability have been redrawn and expanded, with Lord Phillips in 2012 describing the law in this area as being “on the move”, following a raft of pro-claimant cases. Recently, however, the Courts appear to have been pulling back on the expansion of vicarious liability, a position now confirmed by the Supreme Court in its recent decision of Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB.

Proving vicarious liability

To prove vicarious liability a claimant must show:

1. The wrongdoer was in a relationship of employment or akin to employment with the defendant (the “Stage 1 test”).
   
   Note, an employer will not be liable for the actions of genuine independent contractors, but courts will assess the relationship against the factual background, considering features that are similar to or different from a contract of employment (such as whether the individual was being paid, how integral they were to the organisation, the defendant’s control, whether work was carried out for the defendant’s benefit, whether there was an appointment and termination process etc).
2. The wrongful act was so closely connected with the acts the wrongdoer was authorised to do it can fairly and properly be regarded as being done in the course of the wrongdoer’s employment (the “Stage 2” or “close connection test”).

Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB

In a distressing case, the Claimant was raped by Mark Swell, an elder from the Barry Congregation of Jehovah’s Witnesses (the Defendant) which the Claimant attended. He was subsequently sentenced to 14 years’ imprisonment. The Claimant sued the Defendant on the grounds that they were vicariously liable for the actions of their elder. The High Court and Court of Appeal found for the Claimant and the case was appealed to the Supreme Court to determine.

Judgment of the Supreme Court

The Supreme Court found that the Defendant was not liable for the acts of Mr Sewell when he was an elder.   

For the Stage 1 test, the Supreme Court agreed that Mr Sewell was in a relationship akin to employment with the Defendant. He was performing duties in furtherance of and integral to the Jehovah’s Witness organisation, there was an appointments and removal process and a hierarchical structure. The lack of renumeration did not stop there being a relationship akin to employment.

However, the Supreme Court was critical of the approach taken by the lower Courts for Stage 2. None of them had applied the close connection test correctly. The Supreme Court held that the “close connection” test was not made out as:

• The assault took place on Mr Sewell’s property and did not occur when he was carrying out activities for the Defendant.
• Mr Sewell was not exercising any control over the Claimant because of his position as an elder. Instead, he was abusing his position as a close friend to the Claimant.
• Although “but for” his position as an elder, the Claimant would have distanced herself from Mark Sewell, that was not sufficient to show a close connection.
• Although the Defendant had deeper pockets than Mark Sewell, the Court concluded “that is not a justification for extending vicarious liability beyond its principled boundaries”.

Practical takeaways

The Supreme Court decision follows a number of cases in recent years which have sought to reign in the expansion of vicarious liability, including Morrisons Supermarkets v Various Claimants (for more on which see Data breaches and vicarious liability) and Chell v Tarmac Cement and Lime (see our blog Can employers can be vicariously liable for a rogue employee?).

If vicarious liability was “on the move” a decade ago then it has now firmly stopped. Instead, the Courts have re-emphasised the need for a sufficiently close connection between the wrong committed and the employment of the wrongdoer, making it harder for Claimants to argue that an employer is liable for employees acting on a frolic of their own.

That being said, vicarious liability is an inherently fact-sensitive exercise, and it is important to remain alive to the risk of being found liable for the acts of employees in the workplace.  Here are some suggestions for how to reduce this risk:

1. Ensure the boundaries of different roles are clear

Seek to ensure the initial job description, contract and any relevant policies are as clear as possible as to what specific roles are expected to do. While perhaps not determinative in Court, this will be a useful starting point in establishing the scope of authorised activity if there is a dispute about whether there was a “close connection” between the wrongdoing and the wrongdoer’s job.

2. Maintain cultural standards

Culture is defined by the HSE as “the way we do things here”. Ensure that your organisation’s values are clearly encapsulated in relevant policies and codes of conduct to minimise instances of employee negligence or deliberate wrongdoing which may cause harm. Seek to uphold the highest standards at your organisation and make clear these apply to everyone regardless of seniority or whether they are volunteers or not. For more information, see our article on the Powerful effect of organisational culture.

3. Never do nothing

You should have clear processes for reporting and investigating any behaviour that falls shy of the expected standard, and ensure that all reported allegations are addressed appropriately and proportionately. This may not shield you from a claim for vicarious liability but may serve to discourage inappropriate behaviour in the workplace. It may also help support a "reasonable steps defence" in the context of allegations of discrimination.

4. Ensure you have robust insurance

Vicarious liability can apply to accidents as well as misconduct cases. While technically an employer can sue the wrongdoer individually to recover some of the costs incurred as a result of vicarious liability, this is unlikely to be a cost-effective exercise. As such, you should ensure your insurance covers for a broad spectrum of eventualities.

With special thanks to Alex Evans, a current legal assistant, for their help in preparing this blog.

© Farrer & Co LLP, July 2023