Court of Appeal considers Vicarious Liability

26 Oct, 2018

As the season of the office party approaches the Court of Appeal has provided employers with a salient reminder of the unwanted consequences of too much festive cheer. In Bellman v Northampton Recruitment Ltd [2018] EWCA Civ 2214 the Court considered an appeal of a decision that the Defendant Employer was not vicariously liable for the actions of its Managing Director, a Mr John Major, who assaulted and caused significant injury to the Claimant employee, a sales manager, during an after hours drinking session at a hotel following the Company’s Christmas party.

The Court of Appeal overturned the decision of the Judge at first instance who had found that there was an insufficient connection between the director’s field of activities and the assault. This case does not seek to re-invent the wheel of vicarious liability and expressly confirms the approach set out fairly recently in Mohamud v WM Supermarkets Plc [2016] AC 667 recognising that “the preceding case law, although illustrative of different circumstances, must be seen through that prism”. It does, however, provide an interesting examination of some of the particular issues that may be relevant where a vicarious liability is asserted in an intra-employee context.

Following the approach set out by Lord Toulson in Mohamud, the Court considered the exercise to be undertaken. Firstly it had to consider what the functions or field of activity entrusted to Mr Major were, i.e nature of his job. Once this question had been addressed broadly the Court moved on to consider whether as a matter of law based on an evaluative judgment of the facts found, there was sufficient connection between Mr Major’s field of activities and the assault to render the defendant vicariously liable for the assault.

The particular features of Mr Major’s role and field of activities no doubt limit the scope direct application of this decision. The defendant company, an HGV driver’s agency, was a round the clock business with 3 directors and shareholders, two of whom were Mr Major and his wife. The company had 11 members of staff. The Judge at first instance found that Mr Major was “the directing mind and will” of the company and that he would have viewed maintenance of his managerial authority as a central part of his role.

Looking at the context, the place and the circumstances it was noted that the Christmas party was attended by employees and their partners, two guests and Mr Major’s two children. The Judge at first instance found that it had been part of Mr Major’s role to oversee the smooth running of the party and he had arranged for the Defendant Company to pay for food and drink and taxis and accommodation for most of the guests at a nearby hotel. A number of guests from the party migrated to the lobby of the hotel and continued drinking there. The majority of the drinks were paid for by Mr Major. It was found that this was not a pre-planned extension of the formal party. The Court of Appeal ultimately disagreed with the Judge at first instance as to the significance, in the context of sufficient connection between employment and the assault, of the fact that this that this was not a “seamless” extension of the Christmas party.

At some point when many of the guests had left, the conversation turned to business and in particular issues surrounding the recruitment and pay of a new employee. Mr Major became annoyed by being questioned on this issue. The group had moved outside but when they returned inside Mr Major “summoned” the remaining employees. He began to lecture them on how he owned the company. He was described by the Judge as both “probably significantly inebriated” and in the “process of losing his temper” at this point. The Claimant challenged Mr Major and Mr Major punched him to the ground. When he got up Mr Major punched him again knocking him out and causing a very significant head injury.

On the issue of sufficient connection Asplin LJ agreed with the Judge at first instance that this was an unscheduled drinking session not a seamless extension of the Christmas party noting, however, that neither was it just an impromptu drinks party between work colleagues that might happen in any might of the week after work. It was found that if Mr Major had “taken off his managerial hat”, he had chosen to “don it once more and to re-engage his wide remit as managingl director and to misuse his position when his managerial decisions were challenged”. Further it was found that “his position of seniority persisted and was a significant factor”. Reviewing authorities, Asplin LJ concluded that they illustrated the principle that “misuse of authority can occur out of hours or when the parties are off duty, particularly by someone in a senior position”.

However, the Court of Appeal disagreed with the Judge at first instance that a finding of vicarious liability on the facts rendered the Defendant company “an involuntary insurer”.

Irwin LJ in his concurring Judgment was very keen to emphasise that the combination of circumstances in this case would arise very rarely concluding “this case in emphatically not authority for the proposition that employers became insurers for violent or tortious acts by their employees”.

Practically speaking these circumstances may arise rarely but it is entirely foreseeable that, especially where there is a particularly strong nexus between the employee who commits the tortious act and the company itself, it may be more difficult to disentangle their behaviour from their role. That may particularly be the case in their interactions with more junior employees in situations where they have ostensibly been brought together through circumstances arising from their mutual employment.

 

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