Vicarious Liability

Case background:

In December 2011, following the defendant’s staff Christmas party, some employees left the party venue and continued drinking in the lobby of a nearby hotel. The group of employees included the managing director, Mr John Major.

At some point in the night, the conversation turned to the matter of work. During such discussion, Mr Major punched Mr Bellman (the claimant) twice, causing the claimant to fall and hit his head on the floor, reportedly causing a serious brain injury.

The matter was first heard in the High Court on November 2016, which found in favour of the defendant employer. The court held that Mr Major’s actions occurred during an out of hours social event, which was not a ’seamless extension’ of the earlier work Christmas party. The claimant appealed the decision and won.

For a finding of vicarious liability, the court has to satisfy itself of a two-stage test:

1. The nature of the employee’s job
2. Whether there was sufficient connection between the role and his wrongful conduct to make it right for the employer to be held liable.

It was found that:

1. Mr Major was the sole controlling mind of the business; he operated a ‘round the clock’ business and saw managerial authority as a central part of his duties.
2. It occurred on the same evening as the work event which had been paid for and orchestrated by Mr Major on behalf of the defendant. Mr Major was therefore not merely a fellow reveller. He was present as the defendant’s managing director, a relatively small company, and misused that position

This decision will cause concern for employers. Employees of all levels of seniority socialise after work; will liability now arise as a result of an argument between work matters, which leads to an assault?

The Court of Appeal has reaffirmed that, in limited circumstances, an employer will be responsible for the actions of their employees outside of the workplace and after hours.

When receiving such a claim it will be important for a liability insurer to consider the terms of its policy, and in particular:

• Was the injury sustained in the course of, or did it arise out of, the claimant’s employment (if it is an EL claim)?
• Are there any relevant, valid exclusion clauses in the policy? Where indemnity must be provided due to compulsory insurance provisions (e.g. in employers’ liability cases), there may be a right to recover from an insured.

To read the full article visit Kennedys website.