John Lee: Potential for truth and wide-ranging consequences

By JOHN LEE
Published on 23/07/2012 00:00

A recent judgment of the Court of Appeal in England concerning claims of sexual assault against a priest has given rise to unintended and potentially dramatic consequences in the commercial sector.

The doctrine of “vicarious liability” provides that employers will generally be liable for the actions and omissions of their employees in the course of carrying out their duties.

While the question of liability in such cases will often be clear, the same was not true, arguably until now, of similar situations involving the misdeeds of independent contractors in the course of business.

In JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust, the plaintiff complained of several sexual assaults allegedly committed by the late Father Baldwin, while she was resident at the Firs Children’s Home in Waterlooville over a two-year period from 1970.

In November 2011, the High Court held that the Catholic Church was liable for the alleged assaults.

The Church appealed to the Court of Appeal arguing that it could not be considered “vicariously liable” for the alleged actions of Father Baldwin as, amongst other things, priests are not considered employees of the Church, being “office holders”; that neither party considered the relationship one of employment; and that Father Baldwin was remunerated not by the Church itself but by the collection plate.

The question for the Court of Appeal then was whether, in a situation in which no contract at all is in place between the two allegedly liable parties, “vicarious liability” could arise on the part of one for the other’s wrongdoings.

The Court of Appeal 
held that the broad test is whether the relationship between the defendant 
and the alleged perpetrator of the actions complained 
of, is so close in character 
to one of employer and employee, that it is just and 
fair that the former be held liable for the perpetrator’s actions.

In order for liability to arise, the court said that there must 
be a sufficiently close connection between those parties, as well as between the acts or omissions complained of and the duties and responsibilities of the perpetrator.

The court further set out that four fundamental factors shall be taken into account. These include the control any organisation has over the perpetrator, whether that individual performed a core function of the organisation, the extent of integration of the individual within the organisation concerned 
and, finally, whether the individual could be said to be in business on his or her own account.

Lord Justice Davis presciently acknowledged the wide-ranging potential consequences of the court’s judgment, stressing that in dealing with the legal notion of vicarious liability “cases involving sexual harassment or sexual abuse do not fall into any special category” and that “there could also be implications for the wider commercial sphere…”.

The judgment now clarifies the extent of vicarious liability in situations where there is either no employment contract, or no contract at all, in place between the alleged perpetrator of wrongdoings and the organisation or entity on whose behalf certain duties and responsibilities are carried out.

The case will be of particular potential significance in industries and enterprises where there is a heavy reliance upon self-employed contractors. Businesses engaging labour on this basis would do well to heed the four areas of focus set out by the Court of Appeal.

The provision of tools, equipment and uniforms will be taken into account, as will the degree of control exercised over contractors, including the extent of their requirement to comply with corporate policies and procedures and the extent of any remit they have to represent those businesses who appoint them.

Leave to appeal to the Supreme Court has been suspended pending resolution by the High Court of further outstanding questions relating to the case.

• John Lee is an associate in the employment team of DWF Biggart Baillie LLP