UKSC 13 [2020] A.C. 973
Case Heard
- The Supreme Court of the United Kingdom
Jurisdiction of the court
- The Supreme Court: is the final court of appeal for all United Kingdom cases.
Counsel
- Appellant Lord Faulks QC, Nicholas Fewtrell, Katie Ayres
- Respondents Elizabeth -Anne Gumbel QC, Robert Kellar QC
Justices:
- Lady Hale
- Lord Reed
- Lord Kerr
- Lord Hodge
- Lord Lloyd-Jones
Type of Case:
- Appealed Civil Case: Tort Law (Private Nuisance)
FACTS
1) A group of 126 people are the claimants in this case and are alleging that Dr. Gordon Bates had sexually abused them while doing medical tests.
2) Barclays Bank plc is the defendant in this case.
3) The medical practitioner performed these exams from 1968 to 1984s.
4) As a condition of their job applications or employment process, the claimants were mandated by Barclays Bank to undergo medical examinations conducted by Dr. Bates.
5) The victims claimed that Dr. Bates had sexually assaulted them while doing these medical checks.
6) They argued that Barclays Bank needed to be held accountable for the damages brought about by Dr. Bates purportedly improper deeds.
ISSUES RAISED
7) The bank was found vicariously liable by the Court of Appeal, but an appeal was made to the Supreme Court. The appeal was to the supreme court was made on the following grounds:
a. Whether the relationship between Barclays Bank plc and Dr. Bates was sufficiently akin to an employment relationship to impose vicarious liability on the bank. The Appellants raise this point as this is influential in deciding liability and this was assessed by the Court of Appeal through the five criteria’s by Lord Phillips, which may not always be the most suitable way in deciding whether a relationship is “akin to employment”
b. Whether an employer was vicariously liable for the torts of an independent contractor? As recent cases have shown that akin to employment can be extended outside contracted relationships, it is important to decide whether independent contractors also fit within this definition.
c. What are the necessary conditions or criteria that must be satisfied to impose the principle of vicarious liability? The Appellants raise this point as the recent approach to the law on vicarious liability must be considered when applying vicarious liability as recent case law prevents independent contractors from being liable and therefore this must be looked at by the Supreme court.
CONTENTION
Appellant (Barclays Bank plc)
Independent Contractor Argument:
- Barclays claimed that Dr. Bates was not an employee or a person in a relationship similar to employment, but rather an independent contractor.
- The bank made it clear that it had no influence on Dr. Bates’s conduct of the medical exams; he was in charge of his own activities and served more than just Barclays.
- They stated that standard common law rules did not allow vicarious responsibility to include independent contractors’ actions, especially in situations when the contractor.
Absence of a Relationship “Akin to Employment”:
- Barclays argued that Dr. Bates’s relationship with the bank did not fit the definition of akin to employment.
- Dr. Bates was paid on an examination-by-examination basis, with no job-related security or duties. The bank had no daily supervision over him.
- They said that adding independent contractor instances to the scope of vicarious responsibility would be an unwarranted enlargement of the law and unjustly burden companies.
Respondent (Various Claimants)
Control and Integration Argument:
- The respondents argued that there was enough similarity between Dr.
Bates connection with Barclays and that of an employment relationship.
- They made note of the fact that Barclays required the reports as part of their hiring procedure, sent claimants to Dr. Bates for medical examinations, and set the objective of the tests.
- According to the claims, Barclays had substantial effective control over Dr. Bates’s work, which should qualify the partnership for vicarious culpability.
Fairness and Justice Argument:
1. The claimants also emphasised the values of justice and fairness, contending that since the exams were a necessary component of the bank’s business operations, Barclays had to be held accountable for the harm caused by Dr. Bates.
2. They claimed that since Barclays profited from the exams, it ought to be in charge of making sure they were carried out securely and without endangering the claimants.
3. The claimants argued that if vicarious responsibility was disregarded, victims would have no way to seek compensation and the bank would not be held responsible for its part in permitting Dr. Bates’s activities.
The arguments presented by the Respondent was on the basis of the five criteria set out by Lord Philip in Various Claimants v Institute of the Brothers of the Christian Schools,
which can make it fair, just and reasonable to find a relationship akin to employment and impose vicarious liability on the employer. The criteria’s are:
1) The employer is more likely to compensate the victim than the employee and would be expected to have insured against that liability.
2) The tort will have been committed as a result of activity being taken by the employee on behalf of the employer.
3) The employee’s activity is likely to be part of the business activity of the employer
4) The employer employing the employee has created the risk of the tort committed by the employee
5) The employee will to a greater or lesser degree, have been under the control of the employer.
RATIONALE
The Supreme Court after hearing the appeal of the bank decided to overturn the decision of the Court of Appeal and held that the bank was not vicariously liable for the wrongdoing of Dr Bates as the key questions to answer was whether Dr Bates was acting as an independent contractor, carrying on business off his own account or if he was in a relationship akin to employment. Additionally, what are the necessary conditions or criteria that must be satisfied to impose the principle of vicarious liability?
There are two stages to determining whether someone can be held vicariously liable for the torts committed by another:
Step One: Establish whether there is a link between the two that makes it appropriate to hold one of them accountable for the other’s behaviour. This was formerly restricted to connections between employers and employees. Cases such as Various Claimants v Institute of the Brothers of the Christian Schools and E v English Province of Our Lady of Charity, however, extended this to partnerships “sufficiently akin” to employment.
2. Step Two: Make a link between the relationship and the wrongdoing. This guarantees that holding the employer or someone in a comparable role accountable is reasonable and fair.
Lady Hale confirmed that, although the five relevant criteria in the Phillips test might be helpful in establishing whether workers who are technically self-employed (or agency workers) are part of the employer’s business, one must instead look at the underlying details of the relationship. If a contractor is, “carrying on his own independent business it is not necessary to consider the five incidents”.
The underlying facts of the connection must be examined, according to Lady Hale, even though the five pertinent criteria in the Phillips test may be useful in determining whether employees who are officially self-employed (or agency workers) are a part of the employer’s company. It is not required to take into account the five incidences if a contractor is “carrying out his own independent business.”
It was acknowledged that in some cases, where contractors get payment in advance and are required to accept referrals, the situation would be slightly different, but in this instance, Dr. Bates was free to decline exams and even “no doubt carried his own medical liability insurance.” Dr. Bates was operating on his own account since he had other customers and therefore is an independent contractor.
The Supreme court has now confirmed that there is an independent contractor defence within vicarious liability.
DEFECTS OF LAW
The main issue in the case, was whether Dr Bates was an independent contractor or an employee which would be influential in the decision to find the bank liable/not liable. Considerable legal doubt was brought about by the vagueness surrounding the standard for judging whether a connection is “akin to employment”. Although Dr. Bates was not in a position that resembled employment with the bank, the Supreme Court held that Barclays was not vicariously responsible did not fully resolve the complexities involved in such determinations as this decision seems very ambiguous.
The case revealed inconsistencies as the criteria set out by Lord Philips can be seen as important to classify a relationship “akin to employment”. The Supreme court suggesting that this does not need to be followed in certain cases brings a layer of uncertainty in the law.
The decision can even draw criticism for perhaps reducing the channels available to abuse victims to pursue financial recompense. The ruling may lessen victims’ capacity to hold companies accountable when people who are not regular workers cause them harm by limiting the definition of vicarious responsibility.
INFERENCE
The extent of vicarious responsibility is severely limited by the ruling in Barclays Bank plc v. Various Claimants, especially when it comes to situations involving independent contractors. The Supreme Court’s decision makes it clear that, even when independent contractors carry out tasks that benefit the business, they are not held vicariously accountable for the deeds of those contractors who are legitimately operating on their own behalf.
This ruling underscores how crucial the nature of the parties’ connection is, reiterating the usual restriction of vicarious responsibility to employer-employee relationships or arrangements that are “akin to employment.” Through the establishment of a distinct demarcation between independent contractors and employees, the Court has mitigated the possibility of vicarious liability exceeding its predetermined boundaries.
The decision also emphasises how important “control” and “integration” are in defining what constitutes a working partnership. It will be far more difficult to place vicarious liability on the employed party if the worker is fully independent, having their own clientele and autonomy over their work practices.
In the future, where the tortfeasor is an independent contractor, this judgement could discourage claimants from seeking claims based on vicarious liability since the courts would probably adhere to the case’s set precedent. Businesses may view this decision as a safeguard, enabling them to arrange their contracts with contractors more carefully in order to reduce risk. It could, however, also lead to legislative investigation or changes intended to strike a compromise between the need to shield companies from unjust responsibilities and the victims’ right to justice.
All things considered, the decision upholds the bounds of vicarious liability and provides a crucial point of reference for instances involving independent contractors and the potential scope of corporate liability in the future.
Name: Tanmeet Singh Sachdeva
University: University of Surrey