Lorna Ferguson: Employers must be more aware of ‘vicarious liability’

Lorna Ferguson is an Associate in the Glasgow office of insurance law firm BLM.
Lorna Ferguson is an Associate in the Glasgow office of insurance law firm BLM.
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Things rarely move quickly in the legal world. When a profession still dons wigs to appear in court and uses as much Latin as it can get away with, speed isn’t always a factor.

One area of the law that is undergoing rapid change though is the field of “vicarious liability”, which is when one person is held responsible for the action or inaction of another person. As Sheriff Reid recently observed in a judgment, lawyers are being left in the “dizzying wake of a sea change in the law relating to vicarious liability”.

Perhaps the most obvious example of vicarious liability is when an employer is held responsible for the actions of their employees. It’s in this area that employers – and their insurers, who may ultimately feel the impact – need to keep up-to-date so they can navigate the stormy seas that lie ahead.

The case of Grubb v Shannon, in which Sheriff Reid made his observation, is a prime example. The defender, Natalie Shannon, ran a salon called “Blush Hair and Beauty” in Glasgow and, while she was on maternity leave, paid Roseanne Higgins £20 for each day she chose to work in the salon, with Higgins keeping all the money she received from customers, with prices for treatments having been agreed between Shannon and Higgins in advance.

Lauren Grubb was a customer who dropped into the salon to have her eyebrows tinted, but had an allergic reaction to the dye, which resulted in her losing facial hair for up to eight weeks. Higgins was found to be negligent because she did not carry out a patch test or other pre-treatment inquiries.

Shannon argued she should not be held responsible because Higgins was self-employed. But Sheriff Reid decided that the relationship between the defender and Miss Higgins was sufficiently “akin to employment” for vicarious liability to arise.

Sheriff Reid also noted that “perhaps as little as five years ago, this claim would not have survived a debate on the relevancy of the pleadings”. “However, it is made in the dizzying wake of a sea change in the law relating to vicarious liability,” he added.

It’s not just in Scotland that the courts are developing the law surrounding vicarious liability. Two recent cases at the Court of Appeal in London illustrate the pace of change south of the Border.

In Bellman v Northampton Recruitment, the plaintiff appealed against a High Court decision from 2016 that prevented him pursuing Northampton Recruitment for compensation following an assault by one of its directors, John Major. In the original judgment, Judge Cotter QC concluded that “there was insufficient connection between the position in which Mr Major was employed and the assault to make it right for the Defendant to be held liable under the principle of social justice”.

In the second case, Various Claimants v Barclays Bank, the high street lender is appealing against last year’s [2017’s] High Court ruling in which 126 people claimed to have been sexually assaulted by Gordon Bates, a doctor carrying out medical examinations on behalf of the bank. Barclays is appealing based on whether or not it had a defined “relationship” or “connection” with Bates that would leave it liable.

However, despite a broadening of the range of circumstances in which “employers” are liable for their “employees’” actions, it is still possible to mount successful defences. In this year’s [2018’s] Rory Davis v West Yorkshire Security case at the High Court in London, BLM’s lawyers argued that West Yorkshire Security was not liable for the actions of George Fessey, a doorman who inflicted a significant brain injury on the claimant in 2012 after he had an altercation with another doorman which arose after the claimant had been refused entry to a nightclub in Mansfield multiple times. The subtleties of the individual case can often influence the outcome in this developing area.

Once, the lines between employment, self-employment and contract work were relatively clear-cut. Now, these and other cases demonstrate how areas that were once black and white are now shaded in tones of grey, meaning employers and their insurers need to be more aware than ever before about where their responsibility lies for their employees’ actions or inactions.

The so-called “gig economy” is perhaps one of the fast-moving social factors which seem to be influencing the law, both north and south of the Border, in the developing area of vicarious liability.

Lorna Ferguson is an Associate in the Glasgow office of BLM.