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Vicarious liability – when is a business responsible for a rogue employee’s actions?

Mr Bellman, the Claimant, was employed by Northampton Recruitment Ltd, who had organised a Christmas party at a Golf Club to which employees and their partners were invited. As is the way with Christmas parties, drinks were flowing and after the party had come to an end a number of Northampton Recruitment Ltd’s staff continued drinking at a local hotel where many of them were staying, paid for by their employer.

In this group who continued to drink after the party, Mr Bellman talked with Mr Major, the Managing Director and shareholder of the company. The conversation eventually turned to work topics and the recruitment and deployment of staff. Mr Bellman, in a non-aggressive manner, challenged Mr Major on a comment relating to the deployment of a particular member of staff and in response, Mr Major, feeling that his authority had been challenged, lost his temper and punched Mr Bellman, who fell to the floor. When Mr Bellman stood back up, Mr Major then punched him again causing Mr Bellman to hit his head on a marble floor which sadly caused him to sustain a head injury resulting in brain damage with reduced cognitive function such that he lacked capacity and was a protected party for the purposes of the proceedings.

Mr Major was initially sued but as he was unlikely to be able to satisfy any judgment, the defendant company for which the claimant worked was sued instead under the principle of vicarious liability. It was not disputed that Mr Major had assaulted Mr Bellman. The question in dispute was whether the employer should be vicariously liable for the attack. The Court considered whether the actions of Mr Major were in the course of his employment, applying the established test of whether there was sufficient closeness between Mr Major’s duties as an employee of Northampton Recruitment Ltd and his wrongdoing to make it right for the company to be held liable for his actions.

At the High Court, the company was found not vicariously liable because it felt that Mr Major’s actions weren’t a seamless extension of the Christmas party. He went off on a frolic of his own. This decision was appealed to the Court of Appeal.

The Court of Appeal ruled otherwise. In deciding whether the company was vicariously liable, it had to consider the nature of the employee’s job and whether there was a sufficient connection between his job and the wrongful conduct. Mr Major was its most senior employee and the judgment found that the High Court had failed to take account of the power and authority entrusted to him and the fact that the act was triggered by a challenge to his managerial authority. The risk of the act was enhanced by Northampton Recruitment Ltd’s provision of alcohol. The fact that the incident happened in a hotel after the official party and was a ‘follow on’ rather than a separate event, where the company paid for taxis and drinks, was central to the decision to hold the company liable.

What does this mean for you or your business, and what do you need to be doing now?

Whilst this case may provide alarm bells during the planning of office Christmas parties, there is no need to cancel them. Nevertheless, it is important that senior managers are made aware that informal gatherings could well be seen by the courts to be organised work events and therefore they should conduct themselves in a manner befitting of staff. Grievances raised as a result of Christmas party actions being a prime example.

It should also be noted that in this case, a key reason for the finding of vicarious liability was due to Mr Major’s seniority. Whilst the company can still be held liable for any employee’s actions, more senior employee's actions are more likely to cause the company to become liable.

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The link to the case can be found HERE.

 

These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.