Barclays Bank was not vicariously liable for sexual assaults allegedly committed by Dr Bates during medical examinations of prospective employees. Dr Bates was an independent contractor running his own medical practice, not in a relationship akin to employment with the Bank. The Supreme Court allowed Barclays' appeal.
Background
Between 1968 and approximately 1984, Dr Gordon Bates, a medical practitioner in Newcastle-upon-Tyne, conducted medical examinations on prospective employees of Barclays Bank. Dr Bates had a portfolio practice encompassing hospital employment, emigration medicals, insurance company work, and assessments for various organisations, of which Barclays was a comparatively minor client. Applicants successful at interview were told their job offer was subject to passing a medical examination. The Bank arranged appointments with Dr Bates, provided a pro forma report headed “Barclays Confidential Medical Report”, and paid him a fee per report. He was not paid a retainer. Examinations took place in Dr Bates’ home consulting room.
Some 126 claimants in a group action alleged that Dr Bates sexually assaulted them during these examinations through inappropriate examination of breasts and/or digital contact with or penetration of their anus or vagina. Many claimants were teenagers at the time, some aged 16. Dr Bates died in 2009 and his estate had been distributed, rendering him unable to be sued directly. Litigation commenced in 2015, and a group litigation order was made in 2016. Nicola Davies J held at preliminary issue that Barclays was vicariously liable, and the Court of Appeal dismissed Barclays’ appeal. Barclays appealed to the Supreme Court.
The Issue(s)
The central question was whether Barclays Bank could be held vicariously liable for the alleged sexual assaults committed by Dr Bates, a person who was not an employee of the Bank. This engaged the first element of the vicarious liability enquiry: whether the relationship between the Bank and Dr Bates was one which made it proper for the law to hold the Bank liable for Dr Bates’ wrongdoing. Specifically, the court had to determine whether recent Supreme Court authorities had expanded the categories of relationships giving rise to vicarious liability so far as to encompass the relationship between the Bank and an independent medical practitioner.
The Parties’ Key Arguments
Barclays Bank (Appellant)
The Bank argued that although recent decisions had expanded the categories of relationship capable of giving rise to vicarious liability beyond a contract of employment, they had not expanded them so far as to destroy the well-established principle that an employer of an independent contractor is not liable for the contractor’s torts. The Bank relied on the classic statement of Lord Bridge in D & F Estates Ltd v Church Comrs [1989] AC 177, 208:
It is trite law that the employer of an independent contractor is, in general, not liable for the negligence or other torts committed by the contractor in the course of the execution of the work.
The Claimants (Respondents)
The claimants argued that the Supreme Court decisions in Christian Brothers, Cox v Ministry of Justice, and Armes v Nottinghamshire County Council had replaced the traditional distinction between employees and independent contractors with a more nuanced multi-factorial approach. Under this approach, a range of incidents should be considered in deciding whether it was “fair, just and reasonable” to impose vicarious liability. This was the approach adopted by both the trial judge and the Court of Appeal below.
The Court’s Reasoning
The development of the law
Lady Hale, delivering the unanimous judgment, undertook a detailed examination of the recent Supreme Court trilogy of cases and their precursors. She traced the expansion of vicarious liability from Lister v Hesley Hall Ltd [2001] through to E v English Province of Our Lady of Charity [2012], Christian Brothers [2012], Cox v Ministry of Justice [2016], and Armes v Nottinghamshire County Council [2017].
Lady Hale noted that in E’s case, Ward LJ had adopted a test of whether the relationship was “sufficiently akin to employment” by examining whether the relationship was closer to that of an employee or an independent contractor. He summed up the difference thus:
an employee is one who is paid a wage or salary to work under some, if only slight, control of his employer in his employer’s business for his employer’s business. The independent contractor works in and for his own business at his risk of profit or loss.
In Christian Brothers, Lord Phillips had identified five policy reasons usually making it fair, just and reasonable to impose vicarious liability: (i) the employer’s deeper pockets and insurance; (ii) the tort resulting from activity on behalf of the employer; (iii) the activity being part of the employer’s business; (iv) the employer creating the risk by employing the tortfeasor; and (v) control. However, Lady Hale was careful to distinguish these policy reasons from the operative principles:
There appears to have been a tendency to elide the policy reasons for the doctrine of the employer’s liability for the acts of his employee, set out in para 35 of Christian Brothers, with the principles which should guide the development of that liability into relationships which are not employment but which are sufficiently akin to employment to make it fair and just to impose such liability.
She emphasised that Lord Phillips in Christian Brothers had in fact applied the test by examining the detailed features of the relationship, not by mechanically applying the five policy factors. She quoted Lord Phillips’ detailed analysis at paragraphs 56-58 of that case, observing:
I have quoted these paragraphs at length to show that he was answering the questions by reference to the details of the relationship, and its closeness to employment, rather than by reference to the five “policy reasons” in para 35.
Turning to Cox, Lady Hale noted Lord Reed’s formulation that vicarious liability could arise where the tortfeasor carried on activities as an integral part of the defendant’s business activities, “rather than his activities being entirely attributable to the conduct of a recognisably independent business of his own or of a third party.” She held there was nothing in Cox to cast doubt on the classic distinction between employees and independent contractors.
Lady Hale also drew support from Lord Sumption’s statement in Woodland v Swimming Teachers Association [2013]:
But it has never extended to the negligence of those who are truly independent contractors, such as Mrs Stopford appears to have been in this case.
She further cited the Singapore Court of Appeal’s analysis in Ng Huat Seng v Mohammad [2017] with approval:
Indeed, we do not see how vicarious liability, the normative foundation of which rests on the theory that it is fair, just and reasonable to hold a defendant liable for the acts of the tortfeasor on the ground that the tortfeasor is in fact engaged in the defendant’s enterprise, could possibly be extended to tortious acts committed by an independent contractor, who, by definition, is engaged in his own enterprise. There is simply nothing fair, just and reasonable about imposing secondary liability on a defendant in such a situation.
The guiding principle
Lady Hale articulated the governing question clearly:
The question therefore is, as it has always been, whether the tortfeasor is carrying on business on his own account or whether he is in a relationship akin to employment with the defendant.
She held that where it is clear the tortfeasor is carrying on his own independent business, it is unnecessary to consider the five incidents identified by Lord Phillips.
Application to the facts
Applying this analysis, Lady Hale found that Dr Bates was clearly not an employee of the Bank and was not anything close to an employee. Although Dr Bates did work for the Bank, the same could be said of many independent contractors, “ranging from the company hired to clean its windows to the auditors hired to audit its books.” Key factors included: Dr Bates was not paid a retainer; he was paid a fee per report; he was free to refuse examinations; he carried his own medical liability insurance; and he was in business on his own account as a medical practitioner with a portfolio of patients and clients, of whom the Bank was merely one.
Practical Significance
This decision is of considerable importance in clarifying the boundaries of the expanding doctrine of vicarious liability. It confirms that the Supreme Court trilogy of Christian Brothers, Cox, and Armes did not abolish the fundamental distinction between employees (and those in relationships akin to employment) and independent contractors. The five policy factors identified in Christian Brothers are useful tools in doubtful cases but do not replace the core enquiry into the nature of the relationship. Where a tortfeasor is plainly carrying on an independent business of their own, vicarious liability will not attach to the party engaging their services, regardless of how sympathetic the claimants’ position may be.
Lady Hale also made an important observation about the temptation to align vicarious liability with the statutory concept of “worker” under the Employment Rights Act 1996, section 230(3), but cautioned against it:
But it would be going too far down the road to tidiness for this court to align the common law concept of vicarious liability, developed for one set of reasons, with the statutory concept of “worker”, developed for a quite different set of reasons.
The decision has significant implications for businesses that engage independent contractors, medical practitioners, and other professionals. It reaffirms that simply arranging work, providing forms, and paying fees does not transform an independent contractor relationship into one attracting vicarious liability.
Verdict: The Supreme Court unanimously allowed Barclays Bank’s appeal, holding that the Bank is not vicariously liable for any wrongdoing of Dr Bates committed in the course of the medical examinations he carried out for the Bank. Dr Bates was an independent contractor carrying on business on his own account, and his relationship with the Bank was not akin to employment.
Source: Barclays Bank plc v Various Claimants [2020] UKSC 13
