Legal

Should employers get the blame in vicarious liability cases?

6 Jan 2020 By Charlie Thompson

As the Supreme Court prepares to rule on whether organisations can be held responsible for the errant acts of the self-employed workers they hire, Charlie Thompson offers advice for businesses

The Supreme Court will soon determine whether Barclays should be held responsible for the acts of a doctor hired by the bank to perform medical checks on incoming employees between 1968 and 1984. There are 126 employees and former employees who allege that Dr Gordon Bates sexually assaulted them during said checks in a consulting room at his home. Bates died in 2009, but in 2013 the police concluded that had he still been alive there would have been sufficient evidence to prosecute him. In 2015, the claimants brought a claim against Barclays for damages, seeking that the bank be held liable for the acts of the doctor.

At earlier stages in the dispute, Barclays unsuccessfully argued that it should not be liable, because the doctor was not its employee. The bank argued that because the doctor was self-employed, it could not be held liable for his acts – only he could be liable. 

The initial ruling and the appeal ruling were in favour of the claimants. The courts have decided that – for the purpose of deciding whether Barclays could be held vicariously liable for the doctor’s acts – the relationship between the two was sufficiently similar to employment. It also concluded that the acts of the doctor were sufficiently closely connected with that employment. 

If the Supreme Court upholds the decisions of the lower courts, it will mark a continuation of a trend of courts being increasingly willing to hold businesses liable for the acts of third parties. Numerous organisations – especially those that use independent contractors – might be concerned that they will be held liable for acts they did not know about, which were committed by people they did not employ and which, in corporate terms, are historic. 

Regardless of the decision the Supreme Court makes, it’s important for employers to take the following steps:

  • Ensure that recruitment and procurement processes are sufficiently robust. While no assailant is likely to tell a prospective employer or client of their intentions or their previous pattern of behaviour, an organisation leaves itself open to criticism for not performing sufficient checks on candidates, such as following up on references.
  • While medical checks at recruitment are increasingly rare, there are still circumstances in which an employer might request that an employee undergoes a medical. Ensure that these steps are only undertaken as necessary; for example, to establish what reasonable adjustments might need to be made for an employee with a disability.
  • Ensure that agreements with independent contractors contain sufficient indemnity protection for the company, and consider requiring the contractor to take out insurance to satisfy any liability under an indemnity.
  • Review policies and reporting frameworks to make it easier for individuals to raise concerns in the workplace, so that issues can be handled sensitively, confidentially and proactively.
  • Review insurance arrangements. For example, while public liability insurance is not compulsory, organisations might wish to consider whether it would be sensible to take it out.
  • Carefully assess whether an individual is genuinely self-employed or an employee. While there are different legal tests for employment status depending on whether the assessment is to answer the question of statutory employment rights, tax status or vicarious liability, a common denominator in all those tests is control. The courts have held so far that Barclays exerted sufficient control over the doctor to be held liable for his actions. A delicate balance needs to be struck – while organisations might be able to protect themselves from liability from third-party claimants by being more proactive in their supervision of independent contractors, the more control a company exerts over the people it engages, the more likely it is held to be liable for their acts.

Charlie Thompson is a senior associate in the employment team at Harbottle & Lewis

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