Vicarious liability can extend to acts of independent contractors

The Court of Appeal has confirmed that Barclays Bank was vicariously liable for sexual assaults committed by a self-employed GP it had engaged to undertake medical examinations of employees and prospective employees. The Court has dismissed the Bank’s argument that as a matter of principle it should not be liable for the acts of an independent contractor

This latest decision follows two important Supreme Court judgments from 2016, which between them set out the modern law of vicarious liability. One important principle these cases confirmed was that vicarious liability could attach not only to the actions of employees, but also to those of individuals in a relationship “akin” to that of employment. However this is the first appeal case in recent years where a business has been found liable for the actions of a person who followed a conventional model of self-employment.

The Court of Appeal has pointed out that while it might seem “attractive at first blush” to draw a firm line for these purposes between independent contractors and other individuals engaged by a business, in practice this line was not easy to draw, as recent employment and tax cases had demonstrated. It followed that the guidance on vicarious liability from the Supreme Court should be applied. This places particular emphasis on two factors when assessing whether a business should be liable for the actions of non-employees:

• whether the individual carried on “activities as an integral part of the business activities carried on by a defendant and for its benefit”; and
• whether the commission of the wrongful act was “a risk created by the defendant by assigning those activities to the individual in question”.

So in this case it was particularly significant that prospective employees had to attend the examination if they were to be considered for employment. All the necessary arrangements were made by the Bank, which also determined the medical questions to be addressed. The final reports were headed with the Bank’s logo. It was also clear that the arrangements for the medical examinations the Bank had made created the risk that sexual assaults could take place.

Bearing all this in mind, the trial judge had been correct to conclude that the relationship between the Bank and the doctor was “akin” to employment and that the Bank was therefore potentially vicariously liable for the sexual assaults he had committed. In this case there was no doubt that the wrongful acts had been sufficiently closely connected with the relationship between the Bank and the doctor. It followed that the Bank was vicariously liable for the sexual assaults committed by the doctor.

This latest decision is a reminder to employers and their insurers that they should be aware of the risk of vicarious liability when engaging individual self-employed contractors.  If it was ever safe to assume that vicarious liability could not arise in these circumstances, it is certainly no longer the case now.