Judy Dawson; Sensible Limits Placed on Vicarious Liability

Judy Dawson discusses the recent case of Bellman v Northampton Recruitment Limited where the High Court has indicated some limits to the extent of the doctrine of vicarious liability further to the extensions heralded in the recent Supreme Court cases.

The brief (relevant) facts

Mr Bellman was a life-long friend of the Director of Northampton Recruitment Limited, a Mr Mason; they knew each other at primary school and later Mr Bellman became an employee in what was effectively Mr Mason’s company. It is difficult to ascertain why it was that the latter without warning launched a violent and very serious assault on him in the early hours of the morning at a hotel. What followed was doubly unfortunate; the injuries resulted in a brain injury sufficiently serious to render Mr Bellman a patient in proceedings, and the police/CPS reached the decision not to prosecute Mr Mason, based largely on evidence which was found by the High Court to be unlikely to be true from a fellow employee which supported an allegation of self-defence, and Mr Bellman’s seeming wish for his assailant not to be prosecuted which was regarded without reference to the fact that he had just sustained a serious brain injury. It is not clear from the High Court judgement whether the Criminal Injuries Compensation Board have refused to make any payment to Mr Bellman; my own instinct is that in circumstances where it could be contended that he had failed to support a prosecution and where there was some evidence of self-defence that may well have been their decision.

Mr Bellman issued proceedings, initially against Mr Mason personally although these were discontinued when it became evident he had no means to satisfy such judgement, and also against the company (presumably backed by an insurance company). The findings of the Judge that I believe are the most relevant are as follows;

• Mr Mason was one of three Directors of the company but realistically he was the person who had day-to-day operational charge. In fact his hours of work were almost constant; this was a 24 hour business with at least one employee on duty at any time.
• The evening before the assault in question (which had occurred in the early hours) it was the annual Christmas party which occurred at a local golf club. The Judge’s dicta in respect of this is important as it will be applicable to other “social” activities arranged by employers;

“I also have no doubt that, as with many managers in the modern world, [Mr Mason] viewed part of his job to be the motivation of employees. Part of motivation is reward and, apart from salary, many employees receive incidental benefits, such as a Christmas party at the company’s expense. Mr Major was able to take decisions as to company expenditure and no doubt at his direction the Christmas party was arranged and paid for by the Defendant, as were the drinks (subject to a financial limit behind the bar), the hotel accommodation and the taxis to and from the venue. In my judgement Mr Major would have seen it as part of his job to oversee the smooth running of the Christmas party. He was not just an attendee…

I accept that there was an expectation or obligation that employees would attend the Christmas party, unless there was a good excuse. Whilst not a contractual obligation, and refusal or failure to attend would not be a disciplinary matter, I think that in such a small enterprise it would have attracted adverse comment. In this regard I regard it as far more closely connected or incidental to their employment than ancillary activities such as playing for an employee based sports team”.

• The actual assault (and this proved to be one of the most important factors) had occurred not at the Xmas Party but at the Hilton Hotel to which some, but not all, of the party-goers had gone to in the early hours. There was no longer any expectation or obligation for employees to be there. The conversation had moved on to normal social chit-chat and although it had returned to work matters immediately preceding the assault (the perceived bone of contention appearing to be the position of a different employee and the level of trust/reward he had been receiving) the Judge found that the event was no longer the office Christmas Party. Whilst it could be shown that the firm had paid for the taxis to the Hilton, the Judge found that that was no different to the fact that it had paid for other taxis to take other employees home.

Judgement

In those circumstances, the Judge found as follows (the judgement is articulate and the reasoning so clear that I do not feel anything could be gained by summarising or paraphrasing;

“The extent to which the employment relationship put Mr Bellman and others at increased risk at the material time is a significant factor in considering the relationship between the Mr Major and the act in question. With excess alcohol, can come a range of problems including aggression; as the streets of any major town or city late on a Saturday night will bear testimony. The Defendant had paid for alcohol at the Christmas party at the Golf Club and no doubt Mr Major had consumed, at the least, his fair share. However alcohol is customarily provided at virtually all Christmas parties of this nature and taken in relative moderation it can be safely enjoyed; and here the party itself passed without event. Any increased risk of confrontation at the Christmas party, which included two young children amongst the guests did not materialise.

What followed later arose in the context of entirely voluntary and personal choices by those present to engage in a heavy early hours drinking session. Given Mr Hancock’s evidence it is likely that a large amount of alcohol had been consumed over some hours at the hotel by those who remained discussing matters. Even assuming that the company paid or was expected to pay for some or most of the eventual bill, I cannot see any increased risk of confrontation arising from the additional alcohol at the hotel as properly adding support to a finding of vicarious liability, as it was so far removed from employment.

Standing back and considering matters broadly, what was taking place at 3.00 a.m. at the hotel was a drunken discussion that rose after a personal choice to have yet further alcohol long after a works event had ended. Given the time and place, when the conversation was, as it was for a significant time, on social or sporting topics, no objective observer would have seen any connection at all with the jobs of those employees of the Defendant present. The fact that it then veered into a discussion about work cannot provide a sufficient connection to support a finding of vicarious liability against the company that employed them. It was, or without any doubt became, an entirely independent, voluntary, and discreet early hours drinking session of a very different nature to the Christmas party and unconnected with the Defendant’s business. To use a hackneyed expression akin to “a frolic” of their own.

In my judgement 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 which goes back to the time of Holt CJ. Indeed I think it is a world away from circumstances which he and Lord Millet would have considered proper for loss distribution based on social or economic policy. The rule must have proper boundaries; it is not endless. To use Fleming’s phrase to find its application here would be to foist the Defendant, in reality its insurer, with an undue burden and would effectively make it what McLachlin J described as “an involuntary insurer”.

The full judgement is at:

http://www.bailii.org/ew/cases/EWHC/QB/2016/3104.rtf

Discussion

The Supreme Court decision in Mohamud appeared to represent a considerable extension to the doctrine of vicarious liability causing significant concerns to the insurance industry in particular. This sensible interpretation of the doctrine should cause a sigh of relief. It again highlights however the difficulties faced by a Judge and a Civil Justice System when faced with a victim who clearly should be compensated for his serious injuries but who will not be. It is hoped that the Judge’s findings will be taken into account by the Criminal Injuries Compensation Board and Mr Bellman will receive at least some measure of compensation.