This was a recent decision of the Sheriff Appeal Court in Scotland in a historical childhood abuse case which concerned the issue of incorrect parties being brought into proceedings.
The Pursuer claimed damages for alleged physical abuse experienced whilst resident at an approved school in the 1970’s. Proceedings were raised against DLSB as the order to which the perpetrator belonged. DLSB settled the claim but brought two individuals, L and B, into the proceedings on the basis that they were vicariously liable as managers of the school and employers of the perpetrator. However, L and B were not the managers of the school at the time of the abuse. Further, at the time that L and B held managerial positions the school had been acquired by a different entity.
The issue for the Court was whether or not L and B were the correct parties to the action. Their representatives had taken the matter to debate, seeking to have the claim against them dismissed, but the case had been allowed to proceed. That decision was appealed.
Counsel for L and B argued that the case against them was misconceived. They were not the managers in place at the time of the abuse. There was no basis in Scots law for them being held liable for the acts or omissions of previous managers. Examples of when an individual in a representative capacity might be held liable were advanced; for example where they had access to a fund, such as a Judicial Factor. That was not the situation in the case in question and therefore Counsel argued proceedings should be dismissed.
DLSB put forward a broad interpretation of the legislation underpinning the running of schools such as the one attended by the Pursuer – the Children and Young Persons (Scotland) Act 1937 (“the Act”). The Act defined managers as “the persons for the time being having the management or control” of the school.
DLSB argued that the Act had created a new class or body of representatives by referring to “the managers” of schools, something that had not existed prior to the legislation. It was proposed that each member of that class or body was just as representative of “the managers” as the other, no matter when they were in office. Therefore, there could be no earlier/later or previous/successor managers. They were all equally responsible. DLSB’s fall-back position was that the words “for the time being” in the Act ought to be read as meaning “at any given time”. On that basis they said liability could attach and the action ought to be allowed to continue.
The Appeal Sheriff considered the DLSB’s interpretation of “for the time being” did not stand up to scrutiny. In his opinion that wording meant “at the time of the abuse” rather than “at any given time”. The Sheriff also held that, as the managers were defined as “persons” in the Act, it followed that the Act was referring to those people who were in position at the time of the abuse. The appeal was upheld and the case against L and B was dismissed.
Identifying the correct parties in abuse cases, whether to bring them into ongoing proceedings or sue them at the outset, is often tricky. The majority of claims involve historic allegations relating to companies or entities that may have changed hands or been wound up long after the alleged events.
In England & Wales there is often the option of identifying a “nominal” defendant in the proceedings, particularly where historical liability insurance has been traced to meet any award for damages and costs. Such defendants are considered “nominal” in the sense that it is a defendant against whom any judgment can still be enforced, notwithstanding the fact the named defendant may not be an extant legal entity and/or the person(s) or company in existence at the time of the alleged abuse with whom any vicarious liability would have rested.
This is not an option available in Scotland. An attempt to appeal this decision has been refused. The Appeal Sheriff emphasises that care must be taken to ensure only those parties who might have a liability are included in proceedings. Judgment, when granted, can only be made and then enforced against the parties specified in the proceedings. This case highlights how fundamental it is, when making a claim, to identify the correct entity or otherwise face the prospect of dismissal and adverse expenses awards. This is a matter on which we are keen to ensure consistency across the litigation landscape in these non-recent cases so as to protect the interests of insurers and insureds alike.
For more information, please contact Calum Fife.
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