Company vicariously liable for managing director's drunken assault on an employee

Company vicariously liable for managing directors drunken assault on an employee

In the recent case of Bellman v Northampton Recruitment Limited, the Court of Appeal has found that an employer was vicariously liable for a drunken assault carried out by the managing director on an employee. The employer was liable despite the fact that the assault occurred outside the office environment and outside office hours at an informal drinking session after the work Christmas party.

Facts

Mr Major was the managing director of Northampton Recruitment Limited (the company). He hired one of his childhood friends, Mr Bellman, as a sales manager.

Following a company-financed Christmas party, about half the guests, (including Mr Major and Mr Bellman), went on to a hotel, in which some of them were staying overnight, and continued drinking. This was an impromptu event, although the company did pay for taxis to the hotel and was paying for the staff to stay overnight at the hotel. Around 2am, the talk turned to work matters. There was discussion about a new employee who it was understood was being paid more than everyone else. The discussion became heated and Mr Major became annoyed. He delivered a lecture to the staff members present about how he owned the company, was in charge and could do what he wanted. Mr Major was, according to the court, probably significantly inebriated at this point. Mr Bellman then challenged Mr Major and Mr Major punched him twice, knocking him out. The tragic result was that Mr Bellman hit his head on the floor and was left with permanent brain damage.

Mr Bellman brought a claim for damages against the company on the basis that it was vicariously liable for Mr Major’s conduct.

The High Court rejected the claim and held that the company was not liable as there was an insufficient connection between Mr Major’s role as managing director and his assault. The incident had occurred off work premises, out of work time and at a voluntary drinking session.

Mr Bellman appealed to the Court of Appeal (CA).

Decision

The CA upheld the appeal, finding that there was a close enough connection for vicarious liability to arise.

The CA considered two key questions for assessing vicarious liability:

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

The nature of the job

In relation to the first question, the CA made it clear that this should be looked at broadly. It should not be limited to what the employee is expressly authorised to do but should encompass the whole of the employee’s field of activities. In this case, Mr Bellman was the managing director of a small round-the-clock business. He was the directing will and mind of the company and was responsible for all management decisions. The CA concluded that Mr Major's remit and his authority were very wide.

Sufficient connection

The CA found that there was a sufficient connection between Mr Major’s field of activities and the assault. Despite the time and the place, Mr Major had been purporting to act as managing director of the Company when he lectured the employees about his authority and when he carried out the attack. He was exercising the very wide remit which had been granted to him by the company. The attack arose out of a misuse of the position entrusted to Mr Major as managing director. Although the work party and the drinking session was not a single seamless event and attendance was voluntary, the CA found that Mr Major was not merely a fellow reveller. He was present as managing director.

Comment

The High Court decision in this case was rather surprising. This CA decision restores a more orthodox approach to vicarious liability which allows for a broad application of the ‘sufficient connection’ test. Despite this return to a broader test, vicarious liability cases always turn on their facts and the outcomes are likely to remain unpredictable.

One of the judge’s written reasons in this case made it clear that this is an unusual case. It does not support the principle that any assault by a senior employee on a more junior employee will inevitably lead to vicarious liability for the relevant company. There must in each case be a close connection between the employee’s field of activities and the unlawful action.

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