Restoring the litigation balance

The Supreme Court recognised that employers should be free to act as they think fit litigation and do not owe a duty of care to employees/officers.

James-Bowen and others v The Commissioner of Police of the Metropolis
[2018] UKSC 40 (Lady Hale, Lords Mance, Kerr, Wilson and Lloyd-Jones)
25 July 2018

Executive summary

In a case of general importance to all employers and raising fundamental questions about the nature and extent of the duties owed by employers (in this case the Commissioner) to their employees in the conduct of litigation, the Supreme Court recognised that employers should be free to act as they think fit and do not owe a duty of care to employees/officers in that regard.

Background

The claimants, three of whom are still serving police officers, claimed damages for negligence, breach of contract and misfeasance in public office following the Commissioner’s settlement of civil proceedings for assault brought by BA. BA’s claim arose out of the entry and search of his family home in December 2003. The claim was settled in March 2009 when the Commissioner agreed to pay £60,000.00 in damages, together with payment of his solicitors’ costs. Liability was admitted and the Commissioner apologised for the officers’ “gratuitous violence”.

The claimants were subsequently prosecuted for assaulting BA. They were acquitted in May 2011.

The claimants alleged that the Commissioner owed them a duty of care in contract and in tort, as their quasi-employer, to take reasonable care in the litigation to safeguard their interests. They said they had been given assurances that their interests would be protected and alleged that the admission and settlement led them to suffer damage to their health and welfare. All claimed to have suffered psychiatric injury.

On 1 May 2015 Jay J struck out the various claims.

The officers appealed and on 30 November 2016 the Court of Appeal allowed the appeal in part, holding that it was arguable that the Commissioner owed the officers:

  • a duty to defend the litigation brought against her as effectively as possible.
  • a duty (when deciding whether to compromise the claim and if so on what terms) to take reasonable care not to sacrifice their professional reputations without good reason and without giving reasonable warning of what was intended.

The Supreme Court granted permission to appeal. The main issue for determination on the further appeal was whether employers sued for alleged misconduct on the part of their employees arguably owe a duty of care to those employees to conduct the litigation in a way which protects them from economic or reputational harm.

Decision

The Supreme Court unanimously upheld the Commissioner’s appeal and dismissed the case.

The Supreme Court found that the duty of care contended for by the officers was novel and accordingly would only be sanctioned duty if it was fair, just and reasonable to do so.

The court found that in the circumstances it was not fair, just and reasonable for the following reasons: 

  • It could lead to a potential conflict of interest between the Commissioner and her officers. The court recognised that the interests of employers are fundamentally different from the interests of their employees and that the Commissioner must be able to make her own decisions about the strategy for dealing with a claim, including consideration of the importance of successfully defending the claim and what financial and other resources should be devoted to its defence.
  • The Commissioner holds public office with responsibility for the Metropolitan Police Service and must be free to act in accordance with her public duty.
  • Parties to litigation should be able to avail themselves of the process of litigation in order to resolve their disputes without the fear of incurring liability to third parties, such as the claimants in this case, if they do so. 
  • The imposition of such a duty might deter an employer from settling a claim where it was otherwise appropriate to do so and could lead to delay or disruption to the litigation process where there was a dispute between the employer and employee/s as to the appropriate way the defence of a claim should be conducted.
  • If the instant claim were allowed to proceed it may involve the Commissioner having to waive legal privilege in order to provide evidence that there had been no breach of the duty of care contended for. The fear of having to disclose privileged documents in future civil claims may inhibit frank discussion between employers and their legal advisers.

Comment

The Court of Appeal decision had significant implications for any employers faced with claims that they were vicariously liable for their employees’ conduct, particularly where fraud or other serious wrongdoing was alleged. Whilst, as a matter of good practice, employers should always be mindful of their employees’ interests when conducting investigations and litigation, in this reasoned and practical judgment the Supreme Court recognised the very real challenges that would be faced by employers had the novel duty of care been upheld.

Weightmans LLP acted for the Commissioner of the Police of the Metropolis in this case.

The judgment can be viewed on The Supreme Court website.

To discuss any of the issues in this update please contact Martin Forshaw, Partner on 0151 242 7949 or email martin.forshaw@weightmans.com.   

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