26 October 2018

By Paul Scholey and Tony Rippon, Morrish Solicitors

Bellman v Northampton Recruitment Ltd [2018] EWCA Civ 2214

Following a recruitment agency’s Christmas party, to which all employees and their partners were invited, a number of the guests including Mr Major, the Managing Director (“MD”) of the agency, and Mr Bellman, an employee of the agency and the Claimant, continued their celebrations at a hotel bar where some of the employees were staying at the agency’s expense. This was not a planned extension of the party but the agency did pay for the taxi fares to get there and the majority of drinks.

The group continued to drink alcohol and discuss a variety of topics. At around 2.00am the conversation turned to work. 45 minutes later, when challenged about his decision to appointment a new employee, the MD summoned all present employees and lectured them about the fact that he was the owner of the company; he was in charge and he made the decisions. The MD said this new employee was in the correct place. The Claimant, in a non-aggressive manner, verbally challenged this. The MD proceeded to punch the Claimant twice in response, causing him traumatic brain injury.

The High Court held that the agency was not vicariously liable for the MD’s actions. It considered the drinks at the hotel were impromptu. They were not a seamless extension of the Christmas party. Those present when the incident occurred were there in the context of “entirely voluntary and personal choices” – they were there to engage in a heavy drinking session. The fact that a work-related topic was raised was not enough.

The Court of Appeal has now disagreed. The CA has confirmed that the correct approach was set out by the Supreme Court in Mohamud v WM Morrison Supermarkets Plc [2016] UKSC 11 which is the following two stage test:

1. What “field of activities” has been entrusted by the employer to the employee? This question is to be addressed broadly.
2. Was there a sufficient connection between the “field of activities” and the wrongful conduct to make it right for the employer to be held vicariously liable under the principal of social justice?

The CA agreed that the MD’s role had been widely drawn. He was the “directing mind” of a relatively small “round the clock” company with no set hours and responsibility for all management decisions. He spent much of his time working on the agency’s business and was in overall charge of all aspects of it.

The CA took the view that there was a sufficient connection between the field of activities and the assault. Of significance was the manner in which the assault arose. After 45 minutes of discussions about business matters the MD believed his authority had been challenged. He then purported to exercise his managerial control by summoning his colleagues and lecturing them about his authority. When he felt his authority was challenged again he asserted the authority granted to him by the agency, by punching the Claimant. Even if the MD had removed his managerial hat at the beginning of the impromptu drinks, he chose to don it again and misuse his position when his managerial decisions were challenged.

Lord Justice Irwin was keen to emphasise that the facts of this case were unusual and it was not authority for the proposition that employers became insurers for violent acts by their employees.

Since this judgment the approach in Mohamud has once again been confirmed as correct and adopted in WM Morrison Supermarkets Plc v Various Claimants [2018] EWCA Civ 2339. In this latest case the CA has upheld the view of another High Court judge, in finding that Morrisons are liable for the unlawful actions of an employee who deliberately leaked employee personal data. Interestingly, that liability attached despite the fact that the employee’s motive was to damage the employer. The answer, says the CA, if employers are concerned about the costs associated with this sort of problem, is to insure against it.

The law on vicarious liability has moved on enormously in recent years. The focus on the connection with work and the principle of social justice – is it right to hold the employer liable for the employee’s act? – has now replaced the old tests and many of the old cases would now be decided differently. Whilst there will still be cases where an employer might escape liability because the employee is truly “on a frolic of their own” it seems that they will be fewer and further between.