We keep you up-to-date on emerging market issues and their impact on the insurance sector, through a variety of publications, events and our leading market initiatives.
The Supreme Court last week handed down judgment in Armes v Nottinghamshire County Council, an Appeal considering whether vicarious liability might attach to a local authority in relation to intentional acts of abuse by a foster parent, towards a foster child.
The claimant was a child in the care of Nottinghamshire County Council, who had been placed within the care of foster parents by the authority. During the course of this placement, the claimant had suffered sexual and physical abuse. The fact of the abuse had been established at trial, however the claimant sought damages against the local authority, on the basis that they ought to be held liable for the acts of abuse committed by the foster parents.
It is important to emphasise that there was no suggestion that the local authority had been negligent or failed to take suitable care when placing the claimant with those particular foster parents. There was no evidence held by the local authority that either the foster parents were unsuitable or the claimant might suffer abuse. The claimant was instead seeking to argue that even in the absence of any fault or negligence on the part of a local authority, they should still be deemed liable for the abuse committed, as they had responsibility for the child.
The claimant was unsuccessful at the initial trial and subsequently at the Court of Appeal. In the Court of Appeal, it was unanimously found that the relationship between the local authority and a foster carer is insufficiently akin to that of employer and employee, for there to be an imposition of vicarious liability. The Court considered the nature of a family environment, which was the purpose of the foster care placement, and concluded that a local authority would lack control over the day to day care provided by a foster carer. It was this feature of foster care that was central to the Court’s conclusions.
The Court of Appeal also made reference to the burden that any finding of vicarious liability might place upon local authorities and how it might affect the interests of children within their care. Local authorities, as a result of the risks, might be less willing to consider foster placements, leaving children within group homes. It might also interfere with the intended purpose of a foster placement – integrating a child into family life.
However, last week the Supreme Court allowed the claimant’s appeal. The Supreme Court considered that it was just and reasonable to extend the doctrine of vicarious liability to the acts committed by foster parents towards a foster child, even in circumstances where no negligence or fault applied to the local authority.
When reversing the decision of the Court of Appeal, the Supreme Court considered that fostering was an integral part of a local authority’s organisation of its child care services. It was the local authority who recruited and trained any foster parents and they whom placed the child with that foster parent. The Supreme Court therefore considered that any torts committed against a foster child by their foster parents were in the course of an activity carried out for the benefit of the local authority.
L J Black, in the Court of Appeal, had expressed her concern about how the imposition of vicarious liability might affect decision making and how it might ultimately impact on the best interests of the child. The Supreme Court effectively dismissed those concerns – they were not sufficient to persuade the Court to reach a different decision. Local authorities will need to factor in this decision, and its impact on recruitment and monitoring of future foster parents, without disrupting the day to day care and ordinary family life of the child placed within foster care.
The Court of Appeal had also indicated some concern that there may not be a sharp enough distinction between placing children who are under a care order with foster parents, and placing the same children with extended family members, or even a parent. Would the existence of a care order impose vicarious liability in those circumstances? The Supreme Court did express the view that a court would likely be slow to find that intentional abuse perpetrated by another family member could be sufficient to found an action in vicarious liability. The Supreme Court made the distinction between approved and trained foster carers and the less formal arrangements with family members. It would be a matter for future argument and submission however.
The reasoning of the Supreme Court appears to support recent decisions by the lower courts, most notably in Various Claimants v Barclays Bank Plc  EWHC 1929, where the High Court considered Barclays Bank were vicariously liable for the actions of an independent contractor - a doctor - that it had engaged to undertake pre-employment examinations on their behalf. Similar to Armes, Barclays Bank were not the employer of the doctor and had no control over the method or location of the examinations. However, the court held that the relationship was akin to that of employer and employee and the bank had created the conditions that led to their staff being assaulted by Dr Bates.
Vicarious liability is now expanding and changing the nature of relationships between organisations and third party and/or independent contractor, creating new obligations and risks. The difficulty for any organisation is how to adequately consider and ameliorate any risk when outsourcing any kind of service or provision in circumstances where there is likely to be limited oversight or control. The control test, which was a central focus of earlier decisions in respect of vicarious liability, is becoming less relevant in the reasoning of the court and this presents a significant challenge in this ever developing area.