Case Alerts

WM Morrison Supermarkets plc v Various Claimants [2020] UKSC 12

Morrisons will not be held vicariously liable for the actions of a disgruntled employee who leaked the personal details and payroll data of almost 100,000 members of staff, the Supreme Court has confirmed.

The Judgment in WM Morrison Supermarkets plc v Various Claimants [2020] UKSC 12 (the Morrisons case) was handed down yesterday alongside a parallel decision in Barclays Bank v Various Claimants [2020] UKSC 13 – the latter case addressing the first stage of the test for vicarious liability: whether the relationship is capable of giving rise to vicarious liability.

The Morrisons case addressed the second stage of the test: whether there is a sufficiently close connection between the employment and the wrongdoing.

This ruling comes after both the High Court and Court of Appeal held that Morrisons was liable to face thousands of claims by its employees for distress caused by the data breach committed by its former employee, auditor Andrew Skelton, who had in January 2014, whilst he was still employed by the supermarket following disciplinary proceedings, posted online the personal details and payroll data of 98,998 Morrisons employees, as well as sending CDs containing this data to various newspapers.

The 2001 case of Lister v Hesley Hall [2001] UKHL 22 set the precedent for the close connection test. In order for vicarious liability to flow it has to be shown that there is a sufficiently close connection between the employee’s duties and the wrongful act. The case involved abuse claims brought by boys against the employers of the abusing warden of their school residence. The Court held that there was a sufficiently close connection between the legitimate intimacy with the boys which the warden’s duties comprised, and the illegitimate intimacy and abuse carried out by the warden.

The scope of the close connection test was widened by the decision in the 2003 case of Mattis v Pollock [2003] 1 WLR 2158 where a nightclub doorman stabbed a customer outside the nightclub following an incident in the club earlier that evening. The Court of Appeal found that even though the doorman’s conduct was motivated by revenge, the attack was sufficiently closely related to the doorman’s duties that the nightclub employer of the doorman was vicariously liable to the customer for the injuries caused by the doorman’s actions.

Wider still was the close connection test stretched in a 2016 case against Morrisons (Mohamud v WM Morrison Supermarkets [2016] UKSC 11) where a petrol pump assistant responded to a customer’s enquiry about printing some images from a USB stick with a violent attack against him. The Supreme Court held that Morrisons was vicariously liable for the employee’s actions on the basis that attending to customers and responding to their enquiries was within scope of the employment activities.

Welcome relief then for Morrisons, employers and liability insurers alike is the Supreme Court’s ruling yesterday that Mr Skelton’s actions were not sufficiently closely connected to his employment duties since at the time he committed the data breach he was pursuing a personal vendetta against Morrisons and seeking revenge for the disciplinary proceedings he had previously been subject to. The decision serves to check the limits of employers’ liability for the actions of vengeful employees and highlights an important consideration in the stage 2 test: the full picture of the employment at the time of the wrongdoing.

To view/download this Case Alert as a PDF please click here.

If you would like to know more about this matter, please speak to your contacts at Plexus Law:

Tim Francis, Partner

T: 020 7618 0840   |   M: 07889 355 517   |   E: timothy.francis@plexuslaw.co.uk

Rachel Auld, Solicitor

T: 020 7398 9843   |   M: 07790 282 903   |   E: rachel.auld@plexuslaw.co.uk

Whilst we take care to ensure that the material in this Case Update is correct, it is made available for information only, and no representation is given as to its quality, accuracy, fitness for purpose, or usefulness. In particular, the contents of this Case Update do not give specific legal advice, should not be relied on as doing so, are not a substitute for specific advice relevant to particular circumstances. Plexus Law accepts no responsibility for any loss which may arise from reliance on information or materials published in this Case Update.

 

 

 

Barclays Bank plc v Various Claimants [2020] UKSC 13

Introduction

With the majority of the world distracted by Covid-19 and the upheavals this has entailed, the Supreme Court  handed down judgment on 1 April 2020 in 2 important cases, which clarify the extent of an organisation’s vicarious liability for the actions of others.

In the first of these cases (Barclays Bank plc v Various Claimants [2020] UKSC 13) the Supreme Court held that Barclays should not be held vicariously liable for sexual assaults perpetrated by an independent doctor who carried out medical examinations on behalf of the bank. This decision is an important pause on the expansion of vicarious liability and decisively establishes that an organisation should not be responsible for the actions of independent contractors.

The second case (WM Morrison Supermarkets plc v Various Claimants [2020] UKSC 12) which places further limits on the doctrine of vicarious liability will be considered in more detail in a separate article later this week.

Background

The index claims arose out of a series of alleged sexual assaults by a self-employed medical practitioner, Dr Gordon Bates, who carried out pre-employment medical examinations for Barclays Bank in the North East of England between 1968 and 1984. In the course of these examinations, Dr Bates is alleged to have sexually assaulted as many as 126 women. The medical examinations usually took place in a consulting room at Dr Bates’ home.

Dr Bates died in 2009 before the alleged offences were investigated by police. It has been reported that a subsequent investigation in 2013 established that if Dr Bates had still been alive, police considered that there would have been sufficient evidence to pursue a charging decision/prosecution.

With Dr Bates deceased and his estate distributed, Dr Bates’ victims were left to pursue claims against Barclays on the basis that the assaults were committed during the pre-employment medical examinations arranged by the bank.

First Instance and Court of Appeal

At first instance and in the Court of Appeal, the courts found that Barclays was vicariously liable for the assaults committed by Dr Bates. The decision focussed on the 2 stage test for vicarious liability established in Various Claimants v Catholic Child Welfare Society [2012] UKSC 56 (AKA the Christian Brothers case) and the 5 policy reasons identified by Lord Phillips which dictate whether it is fair, just and reasonable to hold an organisation vicariously liable for the actions of someone else:

1. The employer is more likely to have the means to compensate the victim than the employee and can 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, by employing the employee to carry on the activity will have 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

On the facts, both the High Court and the Court of Appeal found that it was fair to impose vicarious liability. The medical examinations were part of Barclays’ business activities (i.e. part of their hiring process) and they had created the risk of the assaults occurring by requiring applicants to undergo a medical with a pre-selected doctor. Dr Bates was under the control of Barclays as he was required to answer prescribed questions using a standard form.

The Supreme Court

The lower instance decisions have now been overturned by the Supreme Court who unanimously held that Barclays should not be responsible for assaults by Dr Bates as he was an independent contractor.

In an authoritative judgment, Lady Hale reiterated the applicability of the 2 stage Christian Brothers test:

1. The relationship between the parties must be such that it is “proper for the law to make one pay for the fault of the other”
2. Where, Stage 1 is satisfied, there must be a close connection between the relationship and the wrongdoing of the third party

The Claimants’ cases fell down at stage 1 of the test as an independent contractor will not usually be in a relationship akin to employment and it is not fair, just or reasonable to hold an organisation responsible for the actions of an independent contractor. This was clearly and comprehensively set out  at paragraph 28 of the judgment:

28. Clearly, although Dr Bates was a part-time employee of the health service, he was not at any time an employee of the Bank. Nor, viewed objectively, was he anything close to an employee. He did, of course, do work for the Bank. The Bank made the arrangements for the examinations and sent him the forms to fill in. It therefore chose the questions to which it wanted answers. But the same would be true of many other people who did work for the Bank but were clearly independent contractors, ranging from the company hired to clean its windows to the auditors hired to audit its books. Dr Bates was not paid a retainer which might have obliged him to accept a certain number of referrals from the Bank. He was paid a fee for each report. He was free to refuse an offered examination should he wish to do so. He no doubt carried his own medical liability insurance, although this may not have covered him from liability for deliberate wrongdoing. He was in business on his own account as a medical practitioner with a portfolio of patients and clients. One of those clients was the Bank.

Conclusion

This case places a clear limit on the doctrine of vicarious liability which has expanded rapidly in recent years to cover a vast array of individuals who fall outside usual employee-employer relationships including prisoners who cause injury in the course of the work duties within a prison (Cox v Ministry of Justice [2016] UKSC 10) and foster parents who abused the children placed in their care (Armes v Nottinghamshire County Council [2017] UKSC 60) and to employees who commit wrongful acts by assaulting customers (Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11) or colleagues at a work party (Bellman v Northampton Recruitment Ltd [2018] EWCA Civ 2214).

The decision in Barclays shows that in many cases it is not necessary to go beyond Stage 1 of the Christian Brothers test (i.e. is there a relationship of employment or akin to employment?). It will only be necessary to consider Lord Phillips’ policy reasons in borderline or novel cases where the relationship is not clear cut. These cases frequently involve sexual abuse claims arising out of assaults by volunteers or members of the clergy/religious organisations.

For now, the law seems settled. Organisations will not be vicariously liable for the actions of independent contractors where it is  established that those contractors are carrying on business on their own account. Going forwards, expect the battleground of vicarious liability to shift towards the emerging gig economy (e.g. Uber, Deliveroo, DPD, etc.) where workers sit somewhere between the traditional roles of employee and independent contractor.

To view/download this Case Alert as a PDF please click here.

If you would like to know more about this matter, please speak to your contacts at Plexus Law:

Andrew Caplan, Partner

T: 01245 951 730   |   M: 07790 929 690   |   E: andrew.caplan@plexuslaw.co.uk

Kate Prestidge, Partner

T: 01245 951 726   |   M: 07790 341 706   |   E: kate.prestidge@plexuslaw.co.uk

Marlon Ellis, Solicitor

T: 01245 951 715   |   M: 07790 437 367   |   E: marlon.ellis@plexuslaw.co.uk

Whilst we take care to ensure that the material in this Legal Alert is correct, it is made available for information only, and no representation is given as to its quality, accuracy, fitness for purpose, or usefulness. In particular, the contents of this Legal Alert do not give specific legal advice, should not be relied on as doing so, are not a substitute for specific advice relevant to particular circumstances. Plexus Law accepts no responsibility for any loss which may arise from reliance on information or materials published in this Legal Alert.

The Court of Appeal in Carpenter v Swift have declined the Claimant’s application for a Protective Costs Order. The case is listed for hearing next month.

The Judge at first instance made a lump sum award of £4,098.051 for the Claimant who was a below knee amputee. The Judge found the additional capital cost of the required special accommodation would be £900,000 more than the value of the Claimant’s existing home. However, she concluded she was bound by the approach in Roberts v Johnstone to apply the discount rate to the additional cost. With a negative discount rate of -0.75% she was unable to make any award in respect of the additional capital cost.

The issue on Appeal is whether a Judge can make an award for the additional capital cost to fund the special accommodation arising from his or her disability. Although the issue is narrow it is of general importance and can make a difference of several hundred thousand pounds on an individual case. The Claimant’s Counsel described the issue as the “issue of the generation”.  The Defendant’s position was that it was an issue of particular and enduring financial importance to Insurers in respect of their continuing business, and, indeed, to the legal profession and Insurers generally who deal with the cases of seriously injured litigants.

The Appeal was originally listed for hearing in July 2019 but was adjourned to enable the parties to obtain further expert evidence. The Claimant applied for leave to introduce evidence of a mortgage package backed by a periodical payment order (PPO). The Defendant objected to the appeal, but the parties now have permission to adduce evidence from four experts in different disciplines.

The parties exchanged expert evidence in November 2019. It maybe of significance that following exchange the Claimant applied for a Protective Costs Order (PCO). The general purpose of a PCO is to enable a Claimant of limited means to advance a case without fear of an Order for substantial costs.

At the time of the original Appeal the Claimant’s cost exposure would have been £209,000 which represented the Defendant’s costs and her own minimal disbursements. By the time of the hearing of her application for a Protective Costs Order the Claimant was facing Defendant/own costs of £710,000 and if the case proceeded to a full hearing as much as £944,000. This sum is considerably higher than the Claimant’s life savings. Her own Counsel described her as:

“An unwilling participant in the litigation as she was compelled to bring the proceedings and fight them to trial in order to recover from the Respondent the amount that she was eventually awarded as compensation for the serious injuries she suffered as a result of a traffic accident for which the Defendant was entirely responsible; and she is now compelled to bring the Appeal in order to recover damages for the cost of suitably adapted accommodation, a long established head of recoverable loss”. 

Having reviewed the authorities the Court of Appeal concluded the policy in practice of the Court was that a Protective Costs Order (PCO) should not be made in private litigation and on this basis the Claimant’s application was dismissed.

The Claimant did not say whether she will proceed with her Appeal if her application for a PCO was refused.  However, the timing of the application does seem to indicate a lack of confidence on the Claimant’s side. It remains to be seen whether the appeal which is listed for March 2020 will proceed.

To view/download this Case Alert as a PDF please click here. For any further information regarding this matter please speak to your contact at Plexus Law:

Philip D’Netto, Partner

T: 01 61 245 7929   |   M: 07970 318 434   |   E: philip.dnetto@plexuslaw.co.uk

Whilst we take care to ensure that the material in this Accommodation Update is correct, it is made available for information only, and no representation is given as to its quality, accuracy, fitness for purpose, or usefulness. In particular, the contents of this Accommodation Update do not give specific legal advice, should not be relied on as doing so, are not a substitute for specific advice relevant to particular circumstances. Plexus Law accepts no responsibility for any loss which may arise from reliance on information or materials published in this Accommodation Update.

 

A Claimant who falsely accused a woman of reversing into her is facing a legal bill of over £7,000 after a judge found her to have been dishonest.

Karen Johnson had claimed that she sustained a back injury as a result of the “accident” and that her symptoms were ongoing. But at the trial in the Leicester County Court, her claim was dismissed with the judge, Recorder Afzal OBE, labelling her “dishonest and opportunistic”.

In addition, the Claimant was said to have misled the expert by failing to tell him of another road traffic accident she had been involved in, from which she had already received a pay-out. Recorder Afzal said that it was only thanks to the investigations made by Plexus Law on behalf of the Defendant and Co-op Insurance that this additional claim had come to light.

The claim arose from an incident which took place in April 2017 in which the Claimant had alleged that the Defendant had reversed her vehicle into the front of the Claimant’s vehicle. The Defendant had accepted that she had reversed slightly but denied that there had been an impact between the two cars. The Claimant had accepted that there was no damage caused to the vehicles but when medically examined said that she had been hit at moderate speed and had been thrown forwards and backwards in the vehicle.

She maintained that she had developed severe lower back pain and had been unable to do any housework or go to the gym for 4 months. However, she had failed to tell the expert that she had also been involved in the second accident, it was not mentioned in her witness statement and the medical report was not included as part of disclosure.

Whilst the Claimant’s witness statement made reference to a 2016 accident, it was silent as to the 2018 accident yet she professed to be still suffering from the back pain she says was caused in this accident.

The trial heard evidence from the Defendant and her 89-year-old passenger both of whom denied that there had been any collision. The Defendant’s case was run on the grounds that firstly, there was no collision; and secondly, if there was it was so minor that no injury could have been caused.

Recorder Afzal was satisfied that there was no collision and described the Claimant as dishonest and opportunistic adding that her credibility had been severely undermined. Her claim was dismissed and she was ordered to pay over £7,000 in legal costs.

To view/download as a PDF please click here.

If you would like to know more about this matter, please speak to your contact at Plexus Law:

Chris Dibb, Associate 

T: 01422 394 280   |   M: 07970 282 901   |   E: christopher.dibb@plexuslaw.co.uk

 

Whilst we take care to ensure that the material in this Case Alert is correct, it is made available for information only, and no representation is given as to its quality, accuracy, fitness for purpose, or usefulness. In particular, the contents of this Case alert do not give specific legal advice, should not be relied on as doing so, are not a substitute for specific advice relevant to particular circumstances. Plexus Law accepts no responsibility for any loss which may arise from reliance on information or materials published in this Case Alert.

Alexander Dobre v Mr Jon Wharnsby

Insurers are often faced with the difficult decision as to whether to make an interim payment for vehicle damage, particularly in credit hire cases when the value of the vehicle or the cost of repairs cannot be agreed.

As demonstrated in a recent Plexus Law case, providing a carefully worded covering letter when making an interim payment should give insurers confidence that they will be protected should the case proceed to trial.

The claimant initially presented claims for credit hire, vehicle damage, PSLA and treatment costs.

The claim for vehicle damage could not be agreed but, as the claimant remained in credit hire, a payment in the sum of £5,000 was released. In accordance with Plexus Law’s strategy in this area, this was sent with a carefully drafted letter which confirmed that the vehicle damage element was in dispute and that the payment was strictly on account of damages generally.  In addition, the claimant was put on notice that the defendant would seek a reimbursement, if appropriate, pursuant to CPR 25.8.

At the pre-litigation stage Plexus made a Part 36 offer for PSLA and the treatment claim, but as quantum could not be agreed the claimant issued proceedings.

When the case litigated, the claimant did not include the claim for vehicle damage in the proceedings.  It was the claimant’s case that as the payment released by the defendant was in the same amount as the vehicle damage, the claim had been agreed and to recover this sum the defendant needed to make a counter claim.

The Defendant maintained that the payment was an interim payment on account of damages generally and could be deducted from any final judgment.

The matter proceeded to trial where the Claimant’s claim for credit hire charges were dismissed in full; the judge agreeing that the claimant he had failed to establish need.

A final award for damages was ordered which was less than the defendant’s Part 36 offer.  The question of the status of the defendant’s interim payment and the costs implications were adjourned for a separate hearing.

At that second hearing the judge found that the payment was an interim payment on account of damages generally and should therefore be deducted from the amount awarded at trial.  As a result the claimant was ordered to reimburse the defendant the balance of the interim payment plus interest.  In addition, the defendants were awarded their costs occasioned by the claimant’s failure to beat the Part 36 offer, which had the net effect of reducing the claimant’s own costs to zero when off-set as against the award in the defendants’ favour.

Thirdly, the defendants were awarded costs of the second hearing on the standard basis with the judge finding that there were exceptional circumstances.

This strategic, joined up approach resulted in Plexus being able to present a coherent case a trial which has provided a significant saving for the client.

To view/download as a PDF please click here.

If you would like to know more about this matter, please speak to your contact at Plexus Law:

Chris Dibb, Associate 

T: 01422 394 280   |   M: 07970 282 901   |   E: christopher.dibb@plexuslaw.co.uk

 

Whilst we take care to ensure that the material in this Case Alert is correct, it is made available for information only, and no representation is given as to its quality, accuracy, fitness for purpose, or usefulness. In particular, the contents of this Case alert do not give specific legal advice, should not be relied on as doing so, are not a substitute for specific advice relevant to particular circumstances. Plexus Law accepts no responsibility for any loss which may arise from reliance on information or materials published in this Case Alert.

Mr Kevin Lynch v AIG UK Ltd. In the Birmingham County Court before Deputy District Judge O’Hagan.

Case Background

Plexus Law was instructed to defend a Small Claims Credit Hire claim. The incident occurred on the 9^th April 2019. Liability was admitted by the Defendant on the 28^th May 2019. The circumstances surrounding the incident were that the insured driver was driving in heeled shoes which unfortunately became stuck, and the Defendant collided with the rear of the Claimant’s vehicle.

Due to the facts of the case, the quantum aspect of the claim was unable to be settled at pre-litigation. The Claimant instructed True Solicitors to issue proceedings which occurred in September 2019.

The Claimant pursued a variety of losses which came to a grand total of £5,396.26. The Claimant did suffer a personal injury however, this was able to be settled at pre-litigation.

The Claimant obtained a hire vehicle from Accident Exchange for a period of 15 days. The hire period was from the 16^th April 2019 until the 30^th April 2019. The date in which hire started was also the same day in which the Claimant vehicle was sent to the garage to be inspected. Upon inspection, the vehicle was declared roadworthy. At which point, it was declared that it would take three days to repair subject to parts availability.

The Claimant’s engineering evidence confirmed new parts would be required. The Defendant’s best offer for period was three days, as per the engineering evidence. The Defendant advanced an argument that any reasonable man would continue using the roadworthy vehicle and wait for the repairing garage to receive the parts prior to handing over the keys, thus reducing the hire period.

The Claimant confirmed he was not impecunious and therefore the Defendant was prepared to offer basic hire rates in attempt to settle the claim.

A Calderbank offer was therefore proposed by the Defendant which was ultimately rejected by the Claimant. The Defendant considered it inappropriate to put forward any further offers, this was a case which was to proceed to a hearing.

Outcome

At the hearing, the Claimant was cross-examined regarding enforceability and period. During cross-examination, the answers provided to the Defendant were reasonable and therefore the enforceability argument was conceded. Therefore, rate and period were the main causes of dispute.

In terms of rate, the Defendant put forward a rate of £47.73 as the lowest basic hire rate and the cheapest way to achieve a NIL excess was a standalone product of £11.99. The opposing Counsel did provide rebuttal evidence however, conceded that the judge should award the offer of the basic hire rate put forward by the Defendant as the rebuttal evidence was too high.

In terms of period, the Claimant accepted during cross-examination that had he been responsible for the hire charges and been informed of the repair time, the Claimant would have acted reasonably and waited for all the parts to be received.

The Claimant was informed that the engineers had an issue with the reinforced steel bar beneath the bumper therefore was under instruction to drive his roadworthy vehicle to the garage and at this point was able to collect the hire vehicle. The Claimant was under the impression that from his point of view, his vehicle and the claim were now in the hands of the garage and his insurer. The judge accepted that the Claimant was not a man to dispute what he is told and accepted that the Claimant made two telephone calls to chase for updates.

The Defendant submitted that the problem with the reinforced steel bumper made no change to the time it would take to repair the vehicle and that when the Defendant requested an update, they were informed by Accident Exchange ‘nothing specific, just generally took this long. The engineer’s duration was just an estimate’.

The Defendant also submitted the case of Chatterton V AXA Corporate Solutions (2016) to rely upon as this case illustrates the approach taken in such cases like these.

Order

Following submissions, DDJ O’Hagan was satisfied that the correct period was three days as that was the length of time taken to repair the car. He expressed his discomfort and unhappiness with this decision as he could see that the Claimant was simply doing what he was told and that he did not act unreasonably and that it would be unfair of the Claimant to pay the remaining damages and stressed this to opposing Counsel to inform the Claimant insurer of this.

The Claimant was awarded damages of £2,027.65 with costs added.

Following the hearing, the judge made the following Order: ‘the Court expressing the view that the responsibility both for the nature of the agreement (a credit hire) and its duration lay with the Claimant’s insurers and/or the garage where the vehicle was repaired and not with the Claimant personally, and further expressing the hope that the insurers will cover the difference between the amount paid and the amount recovered’ . 

Learning points

This case acts as an example that when proceedings are issued in the name of the Claimant and liability is accepted, the true beneficiary is not just the Claimant, but is in fact the Claimant solicitors, the Credit Hire Organisation and even the repairing garage. They are all working in conjunction with each other to ensure the best possible outcome for the Claimant and working in their best interest to mitigate costs.

This case was a fair outcome for both parties as it shows that the Defendant should not be liable for roadworthy vehicles taking a significant period of time to repair without explanation and evidence. It is also a fair outcome for the Claimant, in that he should not be pursued for the lost damages.

To view/download this Case Alert as a PDF please click here. For any further information regarding this matter please speak to your contact at Plexus Law:

James Ormsby, Credit Hire Legal Assistant

T: 0113 4681 638   |   E: james.ormsby@plexuslaw.co.uk

Whilst we take care to ensure that the material in this Case Alert is correct, it is made available for information only, and no representation is given as to its quality, accuracy, fitness for purpose, or usefulness. In particular, the contents of this Case alert do not give specific legal advice, should not be relied on as doing so, are not a substitute for specific advice relevant to particular circumstances. Plexus Law accepts no responsibility for any loss which may arise from reliance on information or materials published in this Case Alert.