Vicarious liability

Kari Hansen takes a look at dual vicarious liability in light of the Supreme Court’s ruling in the Catholic Child Welfare Society case

The Supreme Court handed down its unanimous judgment in the case of The Catholic Child Welfare Society (‘the Middlesbrough defendants’) and others v Various Claimants and The Institute of the Brothers of the Christian Schools (the Institute) and others last week (21 November 2012).

The issues under consideration were whether dual vicarious liability could apply in circumstances where an employer was vicariously liable by virtue of a contract of employment and, if so, whether an unincorporated association could be vicariously liable for the acts of its members.

The Supreme Court found for the first time that dual vicarious liability did arise and when looking at the relationship between a Brother and The Institute, that The Institute was vicariously liable for the acts of the Brothers.

The decision is significant as it not only clarifies the law as to the vicarious liability of unincorporated associations, but also reinforces the potential for arguments of dual vicarious liability in appropriate circumstances.

The claims arise out of alleged acts of sexual and physical abuse committed whilst the Claimants were at St William’s, an Approved School, and later Residential Care Home (the School) between 1958 and 1992.

Claims were brought against two groups of defendants – the Middlesbrough Defendants (essentially various bodies and other representatives of the Diocese of Middlesbrough) and the Institute.

The Middlesbrough Defendants took over responsibility for the school in 1973 and also inherited, under statute, the liabilities of the previous managers of the school. They entered into contracts of employment with the Brothers.

The Institute is an unincorporated association. The Institute had a community of Brothers at the School. The Brothers were, for the most part, teachers at the school and a Brother was almost always the headmaster.

At trial and in the Court of Appeal (CoA) the Middlesbrough defendants were found solely vicariously liable. The judges found that it was neither fair nor just to hold the Institute vicariously liable as the Brothers actions were neither authorised nor condoned by it.

The Supreme Court disagreed.

On the question of dual vicarious liability, the Supreme Court confirmed that it was possible for this to apply.

The issue had previously been considered by the CoA Viasystems (Tyneside) Ltd v. Thermal Transfer (Northern) Ltd & others [2005] .

In his judgment and applying that case, Lord Phillips held that where two defendants are potentially vicariously liable it is necessary to give independent consideration to the relationship of the ‘employee’ with each potential ‘employer’ to decide whether that ’employer’ is vicariously liable. He preferred the less stringent test applied by Rix LJ in Viasystems.

Thus, turning to whether the Institute is vicariously liable for the acts of its Brothers, the Supreme Court confirmed that the test for vicarious liability requires a synthesis of two stages: the relationship between the ‘employee’ and ‘employer’ and whether it is capable of giving rise to vicarious liability; and the connection that links the relationship between the ‘employee’ and ‘employer’ and the ‘employee’s’ act or omission.

The Supreme Court concluded that both of these stages were sufficiently made out.

For stage one, the relationship between the Brothers and the Institute was found to be closer than that of ‘employer’ and ‘employee’ for a number of reasons, including the financial link between the Brothers and the Institute.

Put simply, stage one was made out because the Brothers were acting for the common purpose of the Institute as an unincorporated association.

For stage two, the Supreme Court followed Lister v. Hesley Hall [2002] 1 AC 215. The relationship between the Brothers and the Institute enabled them to hold teaching positions at the school where they were placed to care for the educational and religious needs of vulnerable boys. This provided the necessary close connection between the abuse and the relationship between the Brothers and Institute.

The Brothers lived at the school and this enhanced the risk of abuse if they had a propensity for such misconduct.

Ever since Lister the courts have continually developed and widened the scope of vicarious liability, increasing the burden upon defendants at every turn.

Each situation will turn upon its individual facts, but the potential for such findings in the future is clear and investigation at the appropriate time as to the extent to which any organisation controls the activities of individuals, even where they are not employees, is crucial.

Kari Hansen is a partner at Hill Dickinson