Vicarious Liability: An important decision from the Court of Appeal
The Court of Appeal (“CA”) has overturned the High Court’s earlier decision in Bellman v Northampton Recruitment Ltd holding that an employer can be vicariously liable for injury caused at a work afterparty.
Mr Bellman was employed as a sales manager and Mr Major was the company’s managing director. A Christmas party took place in December 2011 at which a significant amount of alcohol was consumed. Following the party, Mr Major arranged for taxis to take staff back to a hotel where more alcohol was consumed. Most of the drinks were paid for by the company.
An argument broke out about the terms and conditions of employment of another employee. Mr Major summoned staff and lectured them on his authority, that he owned the company and that he made the decisions. Mr Bellman questioned Mr Major’s decision making in a non-aggressive manner. Mr Major punched Mr Bellman twice causing him to fall over and hit his head on the ground. Mr Bellman suffered serious brain damage as a result.
The court had to decide whether the company was vicariously liable for Mr Major’s actions. The High Court held that it was not – it said that the drinks at the hotel were an independent, voluntary drinking session which was unconnected to the employer’s business. However, the CA disagreed.
The Court of Appeal’s decision was handed down on 11 October 2018.
The CA applied a two-stage test:
- What “functions” or “field of activities” were entrusted to Mr Major i.e. what was the nature of his job?
– This question should be addressed broadly.
– The CA found that Mr Major’s remit and authority were very wide. He was the directing mind of the company, was in overall charge of the business, he had authority to control his own methods of work and he did not have set working hours.
- Was there sufficient connection between Mr Major’s field of activities and the wrongful conduct such that it was right for the employer to be liable under the principle of social justice?
– The CA found that Mr Major “was exercising the very wide remit which had been granted to him”… “He chose to wear his metaphorical managing director’s hat and to deliver a lecture to his subordinates”.
– The attack arose out of a misuse of the position entrusted to Mr Major as managing director.
– This was not simply an impromptu drinks party – it followed on from an earlier work event which Mr Major had paid for and organised. He was present as a managing director and business matters were discussed for a significant period before his decision making was challenged.
This is a significant decision for employers and will no doubt receive much attention in the run up to the festive party season. Be aware that your employees’ actions, even those you would never condone, may be found to be carried out ‘in the course of their employment’, leaving the company liable for them.
Where the employee is very senior, and/or the acts are closely linked to work related activities, this risk increases.Back to Our Thinking →