The Supreme Court recently confirmed that Barclays Bank plc was not vicariously liable for the actions of a self-employed doctor who medically examined prospective employees on the bank’s behalf.
Vicarious liability is a strict, no-fault liability for wrongs committed by another person. It most frequently arises in employment relationships, where an employer is held liable for the wrongs committed by an employee. This occurs where there is a sufficient connection between those wrongs and the employee’s employment, such that it would be fair to hold the employer to be vicariously liable. It does not matter that the employer itself has committed no wrong.
Over recent years, case law has expanded the categories of relationship that could give rise to vicarious liability beyond a contract of employment, so that organisations have been held vicariously liable for persons who are not their employees, but are in a relationship akin to employment.
Dr Bates was a self-employed medical practitioner who carried out pre-employment medical examinations on behalf of a number of clients, including Barclays. Barclays arranged the appointments with the doctor, communicated the details to the job applicants and supplied the doctor with a pro-forma report for completion. The examinations were unchaperoned and took place at a consulting room in the doctor's home. He was paid a fee for each report. After Dr Bates’ death, a group of 126 claimants brought a group action against Barclays. They alleged that the doctor had sexually assaulted them while carrying out the pre-employment medical examinations for Barclays and sought damages from Barclays.
Both the High Court and the Court of Appeal held that Barclays was vicariously liable for the actions of Dr Bates because the sexual assaults had happened during medical examinations that Dr Bates had performed at the request of Barclays. Barclays appealed to the Supreme Court.
The Supreme Court held that Barclays was not vicariously liable for Dr Bates’ actions. The court considered recent case law on vicarious liability and found that an employer can be held vicariously liable for the acts of someone who is not their employee, provided the relationship between them is sufficiently analogous to employment. However, the court held that there is still a critical difference between employment (and relationships that are akin to employment) and the relationship with an independent contractor.
According to Lady Hale, the key question was therefore whether the doctor was carrying on business on his own account or whether he was in a relationship akin to employment with Barclays.
Dr Bates was not and never had been an employee of Barclays, nor was the relationship similar to that of employer-employee. Although Dr Bates did work at Barclays’ request, he set up his own appointments, was free to turn down work and carried his own medical liability insurance. He was also not paid according to a retainer but was paid an individual fee for each report. These factors led the Supreme Court to conclude that Dr Bates was an independent contractor, in business on his own account, with a portfolio of clients, one of whom was Barclays. Barclays was therefore not liable for his actions.
This decision is a welcome one for employers as it clarifies that employers will not be found to be vicariously liable for the actions of any self-employed person who is genuinely "in business on their own account". This case, together with the Supreme Court’s decision in the Morrisons case (see our case report here) handed down on the same day, seem to herald a slowing in the expansion in this area of law.