Will the expansion of vicarious liability ever stop?

The law relating to vicarious liability has been thrown into even further confusion by the Court of Appeal in the Barclays Bank plc (Dr Gordon Bates) Group Litigation, [2017] EWHC 1929.

The facts

A group of 153 claimants sought damages against Barclays Bank (the bank) for sexual assaults which they alleged were inflicted by Dr Gordon Bates between 1968 and 1984. Dr Bates was a GP in practice on his own account. He was asked by the bank to examine prospective employees and establish if they were medically fit to work for the bank and suitable candidates for life assurance at ordinary rates. Dr Bates examined them in the consulting room at his home. Dr Bates then completed a pro forma report, marked with the bank’s logo, and submitted it to the bank together with an invoice, which the bank paid.

The vicarious liability issue

At an early procedural stage the Trial Judge, Nicola Davies J, decided that whether the bank was vicariously liable for the actions of Dr Bates was an issue common to all claims and should be tried as a preliminary issue. The specific question for the court to answer was: “Whether the defendant is vicariously liable for any assaults that any claimant may prove to have been perpetrated by Dr Gordon Bates in the course of medical examinations carried out at the request of the defendant, either before or during their employment with the defendant.” In other words, as per stage one of the established two-stage test, was the relationship between the bank and Dr Bates one that was capable of giving rise to vicarious liability?

The trial and appeal

At the trial in July 2017 the judge applied the five-stage criteria set out by Lord Reed in Cox v MOJ [2016] UKSC 10 and concluded that the bank was vicariously liable for the actions of Dr Bates, notwithstanding that he was an independent contractor – a status which was previously thought to have been specifically excluded from vicarious liability.

In July 2018 the Court of Appeal unanimously dismissed the bank’s appeal against that decision. The bank’s central argument was that Dr Bates’ status as an independent contractor was a defence to the claim.

The Court of Appeal rejected this proposition. Their judgment suggests that the independent contractor defence no longer exists. This is despite the fact that in none of the previous cases before the Supreme Court (including Cox, Mohamud v WM Morrison Supermarkets Plc [2016] UKSC 11 and Armes v Nottinghamshire County Council [2017] UKSC 60) was there an alleged tortfeasor who was an obvious independent contractor.

Implications of the judgment

This judgment suggests that there is no longer an independent contractor defence. This will logically apply to any situation where independent medical practitioners carry out examinations for the benefit of an employer in any sector.

There are further problems arising from the court’s analysis. The definition of business activity has been interpreted very widely indeed. The bank contended that its business activity was banking; the court has decided that recruitment is part of the bank’s business activity.

It must follow that recruitment is part of the business activity of any employer and an employer is potentially vicariously liable for all and any independently contracted assistance in connection with its recruitment process. If recruitment is to be regarded as part of an employer’s business activity, will vicarious liability attach for torts by any independent service outside an organisation’s core business activity? For example, electrical or plumbing works that enable a business to continue functioning? Window cleaning that ensures a business has clean premises for its workforce and customers?

The court’s interpretation of what constitutes control also appears to have been extended beyond what the Supreme Court had previously stipulated. The unchallenged evidence was that Dr Bates practised on his own account.

• He worked from his home.
• He controlled his diary.
• He decided whether to accept or reject instructions for examinations. Requests for examinations from the bank constituted around 5% of his work.
• He submitted invoices and was paid fees.
• He was an independent contractor. But that is no longer a bar to vicarious liability.

An application for permission to appeal has been submitted to the Supreme Court. Keoghs act for the defendant appellant.