Fixing the boundary

When is an employer vicariously liable for the actions of his employees? In most cases, this is a relatively straightforward question to answer, because the actions involved are part of the employees’ duties.

However, it is much more complicated when an employee acts in a totally unexpected way, for example by abusing the children he has been employed to care for; by leaving the club where he was a doorman, getting a knife from home and using it to stab customers; or by setting fire to a fellow worker. In none of these scenarios were the actions in any way authorised or encouraged by the employer, but the victims would be left with no effective remedy if unable to recover damages from the employer or his insurer.

The principles to be applied in determining this question have been firmly established by the House of Lords since Lister v Hesley Hall [2002] 1 AC 215. In addition to acts specifically authorised by the employer, there will also be liability where the employee’s conduct is ‘so connected with acts which the [employer] authorised that they may rightly be regarded as modes – though improper modes – of doing them’.

In Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366, Lord Nicholls explained that in determining this issue the court was required to make an evaluative judgment having regard to all the circumstances and with assistance from previous decisions. On this basis, Hesley Hall were held liable for their employee’s sexual abuse of children he was employed to look after, and Mr Pollock was held liable for their employee’s stabbing a customer (Mattis v Pollock [2003] EWCA Civ 887).

Deciding the issue of liability in such cases can be difficult, particularly where the circumstances are as horrific as those referred to above. The finely-balanced nature of the test to be applied can be seen in the third example, which is equally horrific – that of the employee who set fire to a fellow worker in the case of Graham v Commercial Bodyworks Ltd [2015] EWCA Civ 47. Graham worked in a bodywork repair shop. Wilkinson was his friend and fellow-worker. In what was described by the defendant as an incident of ‘horseplay’ (but which the trial judge categorised as ‘a serious assault’ and ‘clearly reckless’), Wilkinson sprayed highly inflammable thinning agent on to Graham’s overalls and then sparked his cigarette lighter. Graham suffered very serious injuries. Wilkinson subsequently disappeared without trace and Graham was left with a claim against their employers.

On behalf of Graham, it was submitted that the employer had created or materially enhanced the risk of injury by requiring its employees to work with thinners and had vested in them a discretion as to how to use the thinner. The risk of injury from misuse of thinner was inherent in the nature of the business. Therefore, Wilkinson’s conduct was so closely connected with what he was employed to do that the employer was vicariously liable.

The judge and the Court of Appeal disagreed. Lord Justice Longmore, with whom the other members of the court agreed, found assistance from the Canadian case of Bazley v Curry 174 DLR (4th) 45, which had been followed in Hesley Hall. There McLachlin J had held that, in deciding whether there was a significant connection between the creation or enhancement of a risk and the wrong which accrues from an intentional act by an employee, the following factors may be relevant:

• The opportunity for the employee to abuse his power;
• To what extent the wrongful act furthered the employer’s aims;
• The extent to which the wrongful act related to friction, confrontation or intimacy inherent in the employer’s enterprise;
• The extent of the power given to the employee over the victim; and
• The vulnerability of potential victims to wrongful exercise of power.

Longmore LJ noted that only the first of these factors applied to Wilkinson’s actions.

Overall, this decision confirms that merely giving an employee an opportunity to commit a wrong is not sufficient to impose vicarious liability. Nor will the creation or enhancement of a risk necessarily lead to that result.  In the absence of some other factor, the employee acting wrongfully will be treated as acting on ‘a frolic of his own’. One can see how the other factors led to different conclusions in the other examples given. In Hesley Hall, there was a level of intimacy in the enterprise in which the employee was engaged and the employee was given considerable power over the victims, who were very vulnerable to wrongful exercise of that power. In Mattis, there was a level of friction and confrontation inherent in employment as a doorman, together with considerable power – the employer had encouraged the employee to perform his duties in an aggressive manner.

Notwithstanding the horrific consequences of Wilkinson’s actions, those actions clearly fell on the wrong side of the line demarcating the boundary of vicarious liability. It seems that the boundary is now clearly fixed.

District Judge Graeme Smith became a circuit judge on 1 May