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The onward march of vicarious liability: the Barclays Bank group litigation [2018] Civ 1670

A group of 153 claimants have brought claims against Barclays as a result of alleged sexual assaults by the late Dr Gordon Bates between 1968 and 1984. The claimants had either applied for employment with the bank or were existing employees. In each case the bank required the claimants to attend a medical examination with Dr Bates in order to establish whether they were physically fit for employment and suitable for life assurance cover. The claimants attended Dr Bates at his home consulting room where they allege that the assaults took place.

Following a group litigation order there was a trial of the preliminary issue as to whether the bank could be vicariously liable for the alleged assaults. The bank contended that Dr Bates was an independent contractor. He was a schedule D taxpayer who submitted invoices to the bank for his work. He also provided similar services for other organisations. On that basis the bank’s argument was that the relationship between it and Dr Bates was not capable of giving rise to vicarious liability. By contrast, the claimants’ case was that they were obliged to attend an examination for the Bank’s benefit; that the bank organised and paid for the consultation; and that the bank’s logo appeared on the written report completed by Dr Bates.

The trial Judge considered the five criteria set out by Lord Reed in Cox v Ministry of Justice [2016] UKSC 10 and found for the claimants on the basis of the following findings: (1) the Bank was more likely to have means to compensate the claimants than Dr Bates (he had died, his estate had been distributed and there was no relevant insurer); (2) the examinations were an activity that the claimants were required to undertake for the bank’s benefit; (3) Dr Bates was acting for the benefit of the Bank and accordingly was an integral part of the Bank’s business activity; (4) the bank had created the risk of sexual assault by requiring the claimants to attend this particular doctor at his home for an examination in accordance with a proforma containing the Barclays’ logo; (5) the fact that the examinations were not conducted at the bank’s premises did not preclude a finding that it had control over Dr Bates’ work. The existence of the proforma suggested that the bank had given Dr Bates directions as to the nature of the examination to be conducted and the questions to be asked.

Barclays appealed on the basis that, on the authorities, it had a classic independent contractor defence. Perhaps surprisingly, the Court of Appeal rejected this argument. The judgment suggests that the independent contractor defence no longer exists because it has been displaced by the five Cox criteria considered by the trial Judge. The Court of Appeal was not sympathetic to the bank’s criticisms of the Judge’s findings. In summary it held that (1) the Bank’s submission that the means of compensation issue should be assessed on commission of the torts rather than the time of the litigation was impractical, would cause satellite litigation and could operate ‘to defeat rather than facilitate justice’; (2) although the medical examination also brought benefits to the claimant applicants, the principal benefit was to the bank as prospective employer; (3) there could hardly be a clearer example of an activity being part of a defendant’s business activity than its recruitment processes; (4) on the facts the creation of risk by the bank had been established; and (5) the bank had a greater degree of control than a party instructing an independent medico-legal expert and this analogy did not therefore assist it. Ultimately the Judge had been correct to conclude that it was fair, just and reasonable to impose vicarious liability upon the Bank because otherwise the claimants would lose their sole route to legal recourse.

The judgment of the Court of Appeal appears to have wide-ranging implications and could be thought problematic in a number of respects. Medical practitioners act as independent contractors for a range of commercial organisations and there is now a good chance that vicarious liability will be imposed in these scenarios. However it is unclear why the well established independent contractor defence has been swept away. The earlier cases, including Cox, did not feature a tortfeasor who was obviously an independent contractor. On that basis it is not immediately obvious why the Cox criteria for the imposition of vicarious liability should take precedence and necessarily preclude the running of an independent contractor defence.

The Court of Appeal’s approach to the Cox criteria is also likely to cause concern amongst employers. In particular the Court of Appeal regarded recruitment to be a core part of the bank’s business activity. The same would presumably apply to any employer using independent contractors to assist it with recruitment processes. If banking was not the limit of Barclays’ core business activities, then it might well be arguable that other ancillary services provided by third parties that enable a business to function should also lead to vicarious liability. Since most businesses need reliable power, plumbing and IT to function these days – and it is not uncommon for these services to be outsourced– it is possible that torts committed by these independent contractors could now be visited upon those who engage them.

Similarly, the Court of Appeal’s finding that the bank exercised any meaningful degree of control over Dr Bates appears open to question. Here was an independent medical practitioner working for a range of different clients at home and in control of his own diary. To base a finding of control on the presence of the bank’s logo on the paperwork that he completed is perhaps a little surprising. It is also unclear why the bank’s analogy with medico-legal experts did not find favour. After all, experience suggests such medico-legal experts are often subject to a greater degree of control than Dr Bates, including specific instructions from the parties as to the issues to be covered by any report. The Court of Appeal clearly thought that medico-legal experts would not be caught by its analysis but there must be some risk that they in fact would be.

It is to be hoped that the Supreme Court will be invited to reconsider these issues in a future case. However Defendants seeking to resist such claims can be under no illusions as to the direction of travel for this part of the law. This is clearly towards the imposition of vicarious liability in ever wider circumstances.

Written by Matthew Boyle



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