The party's far from over

An employer has been found vicariously liable for the wrongful acts of its Managing Director at the end of a work Christmas party.

Bellman v Northampton Recruitment[2018] UKSC 50

Summary

An employer has been found vicariously liable for the wrongful acts of its Managing Director at the end of a work Christmas party.

Facts

Mr Bellman (“the appellant”) was employed by Northampton Recruitment Limited, a company which operated 24/7 on call facilities (“the respondent”). Mr Major was the Managing Director and was “the directing mind and will” of the business as far as the staff were concerned.   At the end of the formal Christmas party, Mr Major paid for a number of taxis to take some of the staff on for impromptu drinks back at their hotel. Later on during the evening, following comments made by staff questioning some of the business decisions made by him, Mr Major summoned the remaining staff together to “lecture them” on how he could do what he liked in running his own business. During a disagreement with the appellant, Mr Major twice knocked him to the floor, causing the appellant to suffer a traumatic brain injury.

At first instance the trial judge held that there was insufficient connection between the wrongful act and Mr Major’s position of employment, given the work discussion arose out of an independent, voluntary drinking session which was distinct from the respondent’s business or Christmas party. The appellant brought an appeal.

Judgment

Giving the lead judgment in the Court of Appeal in favour of the appellant, Lady Justice Asplin followed the test for the imposition of vicarious liability expressed by Lord Toulson in the Supreme Court in Mohamud v WM Morrison Supermarkets PLC (2016 AC 677). In her opinion the question of the nature of Mr Major’s employment position had to be determined broadly. It is not a question of determining the role which the employee has express authority to carry out. Objectively, the position in which the employer has placed the wrongdoer has to be taken in to account. In this regard, as Managing Director, Mr Major’s remit and authority were wide in deciding when and where he could work.

Considering this and determining whether a sufficient connection existed between this wide remit and the wrongful act, Lady Justice Asplin considered that at the time of the assault, Mr Major was purporting to act as the Managing Director, as part of the wide remit entrusted to him by the respondent and “…he chose to wear his metaphorical managing director’s hat … looked at objectively, he was purporting to exercise his authority over his subordinates and was not merely one of a group of drunken revellers”. Whilst the impromptu drinks were not a seamless extension of the Christmas party, they had to be seen in that context. The Court held that Mr. Major was present in his capacity as Managing Director.

Even if he had at any time be deemed to have ‘taken off his managerial hat’ during the course of the night, he wore it again when he chose to summon his staff and re-assert his authority, on the back of a prolonged discussion on the subject. This would have been obvious to those staff in attendance. It was not a personal exchange. There was no temporal gap or change in discussion immediately prior to the assault, given the exchange back at the hotel had been going on for some time. Therefore there was a sufficient connection to render the respondent vicariously liable.

Comments

Readers of our updates on previous relevant cases will recall that we have advised for some time that the doctrine of vicarious liability was likely to continue to come under significant scrutiny and possible extension. This case stands as another example of how fluid the doctrine is becoming, with vicarious liability being imposed even where the act complained of occurs seemingly ‘out of hours’ or when those involved appear to be ‘off duty’. On the facts of this case, and when the chronology of the evening is examined in the way it has been by the Court of Appeal, the outcome is perhaps not surprising. However it does risk rendering employers liable for the actions of their staff in any given context. Reassuringly, Lord Justice Irwin in particular was keen to stress that similar circumstances would be rare, and that vicarious liability would be unlikely to be imposed had this been, for example, an impromptu, voluntary, after works drink session, or a social round of golf between colleagues, even if such a discussion turns to work issues. In particular, Lord Justice Irwin said “This case is emphatically not authority for the proposition that employers become insurers for violent or other tortious acts by their employees”. It does however make it increasingly challenging to predict when such liability will be imposed, requiring a forensic examination of any particular course of events, including the relevant context, detailed chronology, the precise comments or actions undertaken and the duration of such acts.

It is also increasingly difficult for employers and their insurers to protect themselves against ‘rogue employees’ in this way, although there are certain precautions that can be taken. One can only hope that the upper courts take a more restrictive view of the test in future to provide greater certainty and re-assurance to employers.

If you have any questions or would like to know more bout our legal update, please contact Peter Forshaw, Patner.

 

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