“When Employees Turn Bad” – an Employer’s Guide to Vicarious Liability

It is a well-known and well-publicised fact of life that an employer that treats its employees badly can be found liable for its unlawful actions. Many employers will also be aware that they can be held liable for the unlawful acts or omissions of an employee, even if the employer itself was unaware of what that employee was up to (so-called “vicarious liability”). However, a recent Court of Appeal decision has expanded the scope of this principle to the extent that employers can now be found responsible for things done by individuals other than their employees.

Vicarious Liability - the Basic Principle

In the 2002 House of Lords case of Lister v Hesley Hall Ltd, a school warden sexually abused children under his care. It was unclear as to whether the warden’s employer could be held liable for the abuse. The question to be asked was - could the warden’s actions be seen as part of the course of his employment? If so, the employer would be liable. If the warden was on a “frolic of his own”, the employer would not be liable.

The Lister case established the current approach to vicarious liability. The court concluded that the central question was whether the warden’s acts were “so closely connected with his employment that it would be fair and just to hold the employer vicariously liable”. On the facts of the case, the judges found the employer was liable, pointing out that the sexual abuse was “inextricably interwoven” with the carrying out by the warden of his duties.

This test of ‘close connection’ is potentially very easy to satisfy.

For example, in Mattis v Pollock (2003), a club doorman had a dispute with a customer. The doorman went home, only to return with a knife, which he then used to stab another customer, severing his spinal cord. Even though this attack was partly private retaliation, the Court of Appeal found the employer liable for the doorman’s actions. This was largely because the employer had encouraged the doorman to be aggressive and intimidating and the stabbing was the “culmination of an unpleasant incident which had started at the club and could not fairly and justly be treated in isolation from earlier events, or as a separate and distinct incident.”