Key takeaways
Independent contractors outside scope
Vicarious liability does not generally extend to true independent contractors.
Relationships ‘akin to employment’ limited
Supreme Court expansion does not cover independent contractor-client relationships.
Control is key to vicarious liability
Clients must directly employ, or have very substantial control over, the wrongdoer.
The common law principle of ‘vicarious liability’ imposes a strict, no-fault, liability in certain situations for wrongs committed by another person. When asked to impose vicarious liability, the courts impose a two-stage test:
Stage one: Is the relationship between the wrongdoer and the person against whom vicarious liability is claimed either one of employment, or one that is ‘akin to employment’ (but not of independent contractor and client)?
Stage two: Is the wrongful conduct so closely connected with acts that the wrongdoer was authorised to do that they can fairly and properly be regarded as being done in the course of that employment / relationship akin to employment?
The Court of Appeal recently held that earlier Supreme Court decisions on vicarious liability, which have expanded vicarious liability to include relationships that are ‘akin to employment’ within the first stage of the above two-stage analysis, did not extend to rendering an end-user client vicariously liable for the actions of ’true independent contractors’ who were carrying on their own business.
The background facts
The brief factual background to the claim was that, in August 2018, outside a pub operated by JDW, B was restrained by two door supervisors with such force that he suffered a dislocated hip which required emergency surgery and a three-night hospital stay. The door supervisors were employees of RS, an independent security contractor engaged by JDW to provide security services to the pub.
The initial decision
B brought proceedings against both RS and JDW arguing that they were vicariously liable for his injuries at the hands of the door supervisors. B obtained default judgment against RS after it failed to file a defence, but by that time it had gone into creditors' voluntary liquidation and was dissolved a few weeks later. As RS did not have valid insurance, B’s claim therefore proceeded as against JDW. The judge initially held that B had been assaulted by the door supervisors, that JDW was vicariously liable, and ordered JDW to pay B £69,775.50 in damages. However, JDW successfully appealed to the High Court, which held that JDW was not vicariously liable for the assault committed by the door supervisors. B appealed to the Court of Appeal.
The Court of Appeal decision
The Court of Appeal dismissed B’s appeal and held that there is no vicarious liability where the relationship between the wrongdoer and the person against whom vicarious liability is claimed is truly one of independent contractor and client. This traditional position had not been undermined by recent Supreme Court decisions which had expanded vicarious liability to include some relationships ‘akin to employment’.
The security contract between JDW and RS was entirely consistent with RS carrying on a business of its own as an independent contractor. The fact JDW paid for its services, and that those services were carried out for JDW's benefit, made no difference.
The Court reemphasised the basic principle that, where a legal wrong is committed by an independent contractor’s employee, unless they have become the temporary deemed employer of the wrongdoer by accepting an effective and substantial degree of control and responsibility over them, the end-user client which engaged the contractor will not normally be vicariously liable.
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