Vicarious liability – the Supreme Court brings employers some comfort
The Supreme Court has recently handed down two judgments on an employer’s vicarious liability for the actions of an employee in one case and a self-employed doctor in the other.
No vicarious liability for data breach
Employers will be relieved at the Supreme Court’s decision in Morrisons v various claimants that Morrisons was not vicariously liable for a major data breach by a rogue employee whose express intention was to cause the company financial and reputational harm. Mr Skelton, an internal auditor, had disclosed payroll details of nearly 100,000 employees on the internet. There was no financial loss, but over 5,000 employees had brought damages claims for distress.
The Supreme Court clarified that, for vicarious liability to arise, the wrongful conduct had to be so closely connected to acts that the employee was authorised to do, it might be fairly and properly be regarded as done by the employee while acting in the ordinary course of their employment. In this case, the disclosure of data on the internet was not part of the employee’s functions or field of activities. The Court also confirmed that it was also not enough that the employee’s role gave them the opportunity to commit the wrongful act and the fact that there was a close temporal link and an unbroken chain of causation did not of itself satisfy the close connection test. Also, it considered that the employee’s motive was highly relevant particularly in a case such as this where he was pursuing a personal vendetta.
Morrisons was helped by the fact that it was itself not in breach of any data protection obligations. This emphasises how important it is for employers to ensure they have robust procedures in place to ensure compliance particularly since GDPR came into effect otherwise they will be subject to significant fines and compensation. Going forwards, courts will look at what the data controller has done to prevent data security breaches and in this era of mandatory notification businesses will need to look carefully at the measures they take to mitigate against the risks including taking out insurance to protect themselves.
No vicarious liability for sexual assault
The Supreme Court also held that the employer was not vicariously liable in Various claimants v Barclays Bank for the actions of a rogue doctor who sexually assaulted over 100 female job applicants sent for a pre-employment medical check. This Court found that the doctor was genuinely self-employed on his own account as the examinations took place in his home, he was not paid a retainer and had his own portfolio of clients of which Barclays was one. His relationship with Barclays was not akin to an employment relationship but that of independent contractor.
This is a harsh decision for the victims as they have no remedy as the doctor had died in 2009 and the estate had been distributed. However, it confirms beyond doubt that vicarious liability does not apply to the relationship with a genuinely self-employed person.
For more information, please contact Emma Bartlett.
When can you set off claims against different elements of a project
The Court’s decision raises important drafting considerations for construction contracts involving multiple elements of a project.
Drafting terms and conditions or negotiating a contract? Be wary of "unusual" and "exorbitant" exclusion clauses
When drafting a set of terms and conditions, companies must adhere to the requirements contained in the Unfair Contract Terms Act 1977
Stop, collaborate and listen: Top 10 Tips with Collaboration Agreements
Providing you with the top ten tips on collaboration agreements - what should you know?
Phase out of temporary restrictions on use of winding up petitions
Hannah takes a look at the recent UK Government announcement on statutory demands and the presentation of winding up petitions
Preparing your company for sale
We set out here some initial steps to consider in anticipation of a sale.
ESG investment and the challenges for trustees
What challenges does the ESG revolution present for trustees of private family trusts?
The impact of COVID-19 on commercial and residential tenancies
What impact has COVID-19 had on commercial and residential tenancies? Read more here.
Charles Russell Speechlys advises discoverIE on its acquisition of Antenova
discoverIE is a leading international designer, manufacturer and supplier of customised electronics to industry.
Q&A: Separate blocks, common parts and enfranchisement
Miriam Seitler and Lauren Fraser answer queries relating to leaseholders seeking to acquire the freehold.
Coded messages for landlords and tenants
“What does the code of practice mean for landlords and tenants? Read more here”
The family court’s role in micro managing 'trivial' disputes
The recent decision has dealt with the family court’s role in micro managing “trivial” disputes in relation to children
Taxing horizons and fiscal black holes
A super-massive black hole at the centre of the nation’s finances means that tax reform and rates rises look increasingly likely.
Charles Russell Speechlys advises Acora on acquisition of Westgate IT
Westgate IT specialises in providing IT support to businesses in the South West.
Q&A: Wrestling with restrictive covenants
Camilla Lamont (barrister at Landmark Chambers) and Real Estate Disputes Partner Emma Humphreys answer a pair of covenant queries
Charles Russell Speechlys advises Grape Paradise on the acquisition of a fine wine business
Charles Russell Speechlys has advised Grape Paradise on the acquisition of the Sarment Group in the China Mainland territories.
Grab the tail by the horns - Why is tail spend so critical in today’s outsourced portfolio?
It’s usually invisible, but in all likelihood, you’ve got tail spend.
Nick Hurley quoted by the Society for HR Management on the UK government's proposals to prevent workplace sexual harassment
The U.K. government introduced legislation in July 2021 for employers to take proactive steps to prevent sexual harassment on the job.
The Business Magazine and The Surrey Chambers of Commerce report on the firm's involvement in the sale of Online Fuels Limited to DTN
The firm advised the shareholder management team on the sale of shares in Online Fuels to global data, analytics, and technology group, DTN.
The Business Magazine, Insider Media, Business South and The Surrey Chambers of Commerce report on the firm's involvement in Appital's £2.5m growth capital investment
The injection will accelerate the development of Appital’s technology infrastructure, integration with financial institutions.
eCommerce and the Post-Brexit State of Play
Key UK and EU legislation governing how online platforms deal with consumers and their business users.