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Mohamud: The Plates of Vicarious Liability Shift Again

Mohamud: The Plates of Vicarious Liability Shift Again

By Catriona Stirling

Vicarious liability has been considered by our highest courts in a flood of cases in recent years and the law has taken another step forward with today’s judgments from the Supreme Court in the conjoined appeals of Mohamud v WM Morrison Supermarkets plc[2016] UKSC 11 (in which the appeal was successful) and Cox v Ministry of Justice [2016] UKSC 10 (in which it was not).  

In its separate, but complementary, judgments, the Court has given the latest word on:

  1. what relationship between the defendant and the wrongdoer (Cox); and
  2. what connection between that relationship and the tortious act (Mohamud),

will give rise to vicarious liability.

This blog post considers the Mohamud case only.

Background

The traditional formulation of the test for when vicarious liability arises was used throughout much of the 20th Century.

At that time, vicarious liability was confined to the employment relationship. In the context of that relationship, it was said that a wrongful act by a servant in the course of his employment was either (a) a wrongful act authorised by the master, or (b) a wrongful and unauthorised mode of doing some act authorised by the master. A master would be liable for acts which he had not authorised if they were so connected with acts that he had authorised that they may rightly be regarded as modes, although improper modes, of doing them.

This test was cited and applied in many cases, although it proved particularly difficult to apply in cases of injury to persons or property caused by an employee’s deliberate act of misconduct, it being particularly difficult (as the Supreme Court in Mohamud and many others have recognised) to characterise such actions as being improper modes of doing authorised acts without greatly stretching the natural meaning of those words.

In the well-known case of Lister v Hesley Hall Ltd [2001] UKHL 22, the House of Lords considered how the doctrine of vicarious liability applied to the warden of a school boarding house who sexually abused the children in his care.

The House of Lords modified the traditional test, holding that it was not necessary to ask whether the acts of sexual abuse were modes of doing authorised acts. The question was whether the warden’s torts were so closely connected with his employment that it would be just to hold the employers liable.

They held that the employers were vicariously liable because they undertook the care of the children through the warden and he abused them, such that there was a close connection between his employment and his tortious acts. 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.

In Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48, the House of Lords applied the Lister approach, noting that it 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, but that it is fair to allocate the risk of losses thus arising to the businesses, rather than leaving an injured individual with only an uncertain remedy against the individual wrongdoer. Whether the wrongdoer was acting under authority was not, therefore, the test.

Rather, the answer was 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….in the ordinary course of the firm’s business or the employee’s employment…”

The court noted that:

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…

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, wary 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.”

The Lister and Dubai Aluminium ‘close connection’ test was subsequently followed in a long line of cases, including at appellate level.

In some cases, most notably the Catholic Child Welfare Society v Various Claimants [2012] UKSC 56, and the decisions of the Court of Appeal and Supreme Court in Cox, the doctrine of vicarious liability has been extended beyond the employment relationship.

 

Mohamud v WM Morrison Supermarkets plc

The facts

Mr Mohamud, a customer of one of the defendant’s petrol stations, asked the defendant’s employee, Mr Khan, if he could print some documents at the kiosk inside. Mr Khan’s job was to see that the petrol pumps and the kiosk were kept in good running order and to serve customers. Without any provocation from Mr Mohamud, Mr Khan in response subjected him to abusive, racist language and asked him to leave. He then followed him outside to his car,  carried out a vicious and unprovoked physical assault, and told him never to come back to the petrol station.

The Judgments Below

Both at first instance and in the Court of Appeal, it was held that the defendant was not vicariously liable for Mr Khan’s actions.

At first instance, the judge held that there was not a sufficiently close connection between what Mr Khan was employed to do and his tortious conduct for his employer to be held vicariously liable, applying the ‘close connection’ test laid down in Lister v Hesley Hall Ltd [2001] UKHL 22.

The Court of Appeal upheld the trial judge’s decision that the claim failed the ‘close connection’ test. The main thrust of their reasoning was that Mr Khan’s duties were circumscribed. He was not given duties involving a clear possibility of confrontation or placed in a situation where an outbreak of violence was likely. Following a review of the case law, the fact that his employment involved interaction with customers was not enough, in their view, to make his employers liable for his use of violence towards the claimant.

The Court of Appeal did, however, add that if the question had been simply whether it would be fair and just for the company to be required to compensate the claimant for his injuries from the assault, there would be strong grounds for saying that it should. The assault arose out of an interchange which began when the claimant asked to be supplied with a service which he thought the company could provide. The customer was in no way at fault. In those circumstances, it would be said that the employer could fairly be expected to bear the cost of compensation. However, fairness and justice was not the legal test.

The Supreme Court decision

On appeal, the issue was whether there was sufficient connection between the wrongdoer’s employment and his conduct to make the defendant legally responsible.

The appellants argued that the test of when vicarious liability arises should be broadened from the ‘close connection’ test. 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. What mattered was not just the closeness of connection between a representative’s duties to his employer and his tortious conduct, but the setting which the employer had created. He had created the setting by putting the employee into contact and close physical proximity with the claimant.

The argument that there should be a broader test was rejected by the Supreme Court.

However, the Court took a different view of how the ‘close connection’ test should be applied on the facts of this case and allowed the appeal.

Lord Toulson (with whom the others agreed) noted past criticism of the Lister decision, including in the Catholic Welfare case, which complains that it is not easy to deduce from Lister the precise criteria that will give rise to vicarious liability for sexual or other abuse, and that the test of ‘close connection’ tells one nothing about the nature of the connection.

However, he said that in Lister, the court was mindful of the risk of overconcentration on a particular form of terminology, and that:

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.”

Going on to simplify the ‘essence’, he said that the court has to consider two matters:

1. 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 this job. This question must be addressed broadly, in particular by reference to the passage in Diplock LJ’s in Ilkiw v Samuels [1963] 1 WLR 991 which states that:

As each of these nouns implies [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.’

2. 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 [that ‘whoever employs another is answerable for him, and undertakes for his care to all that make use of him’] are cases in which the employee used or misused the position entrusted to him in a way which injured the third party.

Lord Toulson said that the following were all cases in which the employee misused his position in a way which injured the claimant, and that was the reason why it was just that the employer who selected him and put him in that position should be held responsible:

  1. Lloyd & Grace [1912] AC 716, in which a solicitor’s clerk entrusted with managing the defendant’s conveyancing department defrauded the plaintiff, who had come to the firm for advice about properties left to her by her husband.
  2. Petterson v Royal Oak Hotel Ltd [1948] NZLR 136, in which a barman, after having a glass thrown at him when he refused to serve a drunken customer, picked up a piece of the glass and threw it back at the customer, in the process injuring another customer.
  3. Lister (see above).

By contrast, he said, in the case of Warren v Henlys Ltd [1948] 2 All ER 935, any misbehaviour by the petrol pump attendant, acting in that capacity, was past history by the time 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.

Applying these principles to Mr Mohamud’s case, it was Mr Khan’s job to attend to customers and to respond to their inquiries. His conduct in answering the claimant’s request in a foul-mouthed way and ordering him to leave was inexcusable, but ‘within the “field of activities” assigned to him’. What happened thereafter was an unbroken sequence of events.

While it had been argued that there ceased to be any significant connection between Mr Khan’s employment and his behaviour towards the claimant when he came out from behind the counter and followed him onto the forecourt, Lord Toulson did not accept this, for two reasons:

1. He did not think it right to regard Mr Khan as having metaphorically taken off his uniform the moment he stepped from behind the counter. He was following up on what he had said to the claimant. It was a seamless episode.

2. Secondly, when Mr Khan followed the claimant back to his car, he again told him in threatening words that he was never to come back to the petrol station. This was not something personal between them; it was an order to keep away from his employer’s premises, which he reinforced by violence. In giving such an order, he was purporting to act about his employer’s business. It was a gross abuse of his position, but it was in connection with the business in which he was employed to serve customers. His employers entrusted him with that position and it was just that as between them and the claimant, they should be held responsible for their employee’s abuse of it.

Implications of Mohamud

The judgment of the Supreme Court will be of particular interest to claimant lawyers considering intentional torts such as sexual and other physical abuse, and other criminal acts. It is anticipated that it will significantly widen the range of factual circumstances in which defendants will be vicariously liable for such acts.  

While the Court was at pains to emphasise that it was not prepared to modify the Lister ‘close connection’ test in any way, it is plain that there has been a paradigm shift in the way that this test will be applied.

Until today’s judgment, it had been thought that it was not sufficient for vicarious liability to arise if the employment relationship had merely given the wrongdoer the time and opportunity to commit the wrongful act. The fact that employment involved interaction with customers was not enough; something more was required.

Examples of this ‘something more’ included where an employee was placed in a position of power over vulnerable individuals (as in Lister), or given duties involving a clear possibility of confrontation (such as where a nightclub bouncer had approval to use violence to keep order), or placed in a situation where an outbreak of violence might be likely (such as very high-pressured work environments where tempers are likely to flare).

While the Supreme Court did not explicitly say so, following today’s judgment, it appears that ‘something more’ is no longer required in order for vicarious liability to arise. It is merely necessary to look in broad terms at the whole nature of an employee’s job, then look at whether the employee used or misused the position entrusted to him in a way which injured the third party.

It is therefore likely to be sufficient to show only that an employee was given the opportunity to commit the wrong, by reason of being in a position to interact with others in a wrongful manner. No further factor appears to be present, so long as the wrong arises out of an interaction with a customer. The doctrine can even extend to a wrong done at a later time or in a location outside the workplace, if there is an unbroken sequence of events which leads there from the workplace.

Following this case, for any customer or client-facing employee, for example in a retail or service environment, it appears that any interaction with a member of the public or service user will almost inevitably fall within the scope of their duties and be in connection with the business in which they are employed. And going further, for any employee who works with others in any capacity, can it be assumed that interaction with those others will fall within the scope of their duties, looked at broadly? 

If this is correct, it is a welcome development, which it is to be hoped will lead to less stretching of language and a more principled approach in the future, with fewer fine distinctions being made on the basis of whether there is ‘something more’ present and fewer deserving victims left without an enforceable remedy.

In abuse cases in particular, this will extend the potential to argue for vicarious liability far beyond those cases in which the wrongdoer was placed in a position of trust over the victims to all cases in which the wrongdoer had an opportunity to abuse by reason of the position in which they were employed, whether or not this was a position of trust.

These are interesting times in the world of vicarious liability and it is unlikely that this will be the last consideration by the Supreme Court of this issue.

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