25 Oct 2018

We cover the Court of Appeal's decision in Bellman v Northampton Recruitment Ltd [2018] EWCA Civ 2214, which looked at the concept of employers' vicarious liability. Here, a managing director caused traumatic brain injury to an employee after a fight broke out at impromptu drinks following the company's Christmas party. The Court of Appeal held that the company was vicariously liable. There was sufficient connection between the managing director's job and his wrongful conduct, despite the incident occurring outside the workplace and outside office hours.

Facts

In December 2011, Northampton Recruitment Limited (the Company) held a Christmas party for its 11 members of staff and their partners. Mr Bellman was employed by the Company and was present at the party with his partner. Also present – overseeing the party and paying for food, drink, transport and accommodation – was the Company's managing director, Mr Major.

After the party, a number of attendees moved to the nearby Hilton Hotel for further drinks. At around 2am, when the remaining guests were inebriated, conversation turned to work, and Mr Major began lecturing his employees about his authority and role within the Company.

Mr Bellman criticised a recent personnel decision made by Mr Major, who reacted by punching Mr Bellman multiple times, causing him to fall backwards and hit his head on the ground. Mr Bellman sustained significant injuries, which resulted in traumatic brain damage, and brought a claim against the Company in the High Court for damages. The High Court had to decide whether the Company was vicariously liable for Mr Major's actions.

High Court decision

The principle of vicarious liability dictates that in certain circumstances, an employer can be vicariously liable for negligent acts or omissions by employees in the course of their employment.

While the High Court judge recognised the expansive nature of Mr Major's role, and the wide-ranging duties connected with his employment, he held that it would not be right for Mr Major to be considered to be always "on duty", in any situation where he was in the company of other employees. Moreover, the High Court considered that because the drinks were completely separate from the prior work event, there was an insufficient connection between Mr Major's employment and his wrongful conduct. Mr Bellman appealed this decision, on the grounds that the High Court had failed to accurately apply the facts when carrying out its evaluative judgment.

Court of Appeal decision

The Court of Appeal referred to the Supreme Court judgment in Mohamud v WM Morrison Supermarkets Plc as the established authority on vicarious liability. According to Lord Toulson in the Mohamud case, the court must consider:

  1. What functions or 'field of activities' have been entrusted by the employer to the employee; and
  2. Whether there was sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable under the principle of social justice.

Field of activities

The High Court had recognised, and the Court of Appeal agreed, that Mr Major was the "directing mind" of the Company, and regularly acted on behalf of the Company on a wide range of matters. As managing director, Mr Major was in overall charge of all aspects of the Company, therefore the majority of his actions were in some way directly or indirectly connected to the Company. This was particularly true given the nature of the Company's business: as a 'round-the-clock' operation, it necessitated Mr Major being available for consultation or direction at all times.

The Court of Appeal disagreed with the High Court decision that it would be unreasonable to expect Mr Major's duties to continue through to the early hours of the morning. This interpretation of Mr Major's 'field of activities' was too narrow, as it focused primarily on what specific duties were assigned to him. Viewed broadly and objectively, Mr Major's remit and authority were wide-ranging, therefore, the Court of Appeal held that Mr Major was acting within the field of activities assigned to him as managing director when the assault took place.

Sufficient connection

The Court of Appeal recognised that the after-party was not a continuation of the Christmas party, that the venue had changed, and that significant time had passed since the Christmas party itself. Despite these circumstances, the Court held that there was a sufficient connection between Mr Major's employment and the incident at the after-party, and therefore that the Company was vicariously liable for the injuries caused to Mr Bellman. Viewed in the context of the evening as a whole, the drinks occurred after a work event that had been organised and paid for by Mr Major, in his capacity as the Company's managing director.

Mr Major's actions were further evidence of his purporting to act as managing director of the Company and exercise his authority over his employees. Immediately prior to the incident, Mr Major "chose to wear his metaphorical managing director's hat and to deliver a lecture to his subordinates". Then, once his managerial decision-making had been challenged, he reacted violently and assaulted Mr Bellman.

The Court of Appeal therefore decided that the Company was vicariously liable for Mr Major's actions.

Comment

With Christmas party season coming up, this case acts as a timely reminder to employers. Clearly, there is a possibility that employers can be held vicariously liable for the wrongful actions of an employee, regardless of how far removed those actions may initially appear to be from the offending individual's employment.

However, decisions on vicarious liability often turn on their facts, and the facts in this case were particularly unusual. To that end, Irwin LJ was quick to emphasise that this judgment "is emphatically not authority for the proposition that employers become insurers for violent or other tortious acts by their employees".