The issueme-individual

Does a person who is sued in civil litigation for the alleged misconduct of her employees (or others for whom she is vicariously liable) owe a duty of care to avoid causing those employees or “quasi-employees” financial loss arising from the conduct of the person’s defence?

The background

The Claimants were all police officers involved in the arrest and detention of Babar Ahmad in 2003.  That arrest was the starting point of an eight-year legal fight, via the European Court of Human Rights, by Mr Ahmad unsuccessfully to avoid extradition to the United States on terrorism charges. This gave him the dubious honour of being the longest-serving prisoner to have been detained without trial in UK history.

In July 2007, Mr Ahmad brought civil proceedings alleging that he had been assaulted in the course of his arrest and subsequent detention by the police. Those proceedings were issued against the Commissioner as the person vicariously liable for such allegations (Police Act 1996, s 88). Those proceedings were settled on terms which included the acceptance of all but one of 22 allegations of serious violence against the officers and a public apology which committed to investigating the officers’ refusal to give evidence.

In August 2010 the officers were charged with various criminal offences arising out of the arrest of Mr Ahmad, but after a five-week trial, they were acquitted on all charges. No professional misconduct proceedings were brought.

The Appellants’ claim and the judgment under appeal

In January 2014, the officers brought their own civil claims against the Commissioner challenging the decision to settle the claim and the terms on which the settlement was reached. They alleged that the Commissioner’s decision had caused them reputational, economic and psychiatric harm suffered as a result of errors made by both the Metropolitan Police Service and the Director of Legal Services at the Met, in the preparation and conduct of the defence to Mr Ahmad’s claim. They contended that the Commissioner’s admission of liability and her public apology unfairly branded them as abusive thugs, which resulted in their being required to undergo the stress of a criminal trial and damage to their prospects of promotion.

The officers’ claim was initially issued in respect of four grounds. However, in this appeal the only remaining issue is whether or not, as a quasi-employer, the Commissioner owed the officers a duty of care to protect their health, economic and reputational interests in: (i) the conduct of the Commissioner’s defence; (ii) the decision to settle those proceedings; and (iii) the terms on which the settlement was reached.

On the officers’ case, the breach of duty arises from the fact that the Commissioner found herself in a position where she had to settle the claim and on the terms she did because of a series of allegedly negligent failings in the conduct of the defence (paras [38]-[39]).

At first instance, Mr Justice Jay struck out all of the claims, on the Commissioner’s application, pursuant to CPR r 3.4. In the Court of Appeal, the Officers succeeded in establishing that arguably the Commissioner did owe them a duty of care, arising from the quasi-employment relationship, to protect them against economic and reputational harm, as alleged. However, the Court of Appeal upheld the decision to strike out the negligence claim relating to psychiatric harm (paras [44]-[45]. According to the Court of Appeal, the duty required the Commissioner to defend the claim as effectively as possible and a duty to take reasonable care not to sacrifice their interests and professional reputations without good reason and without giving them reasonable warning of what she intended to do (paras [33]-[36]).  There was evidence that the duty had been breached in light of defects in relation to evidence gathering, witness identification and expert evidence that the officers sought to rely upon. For the purposes of a strike out/summary judgment application it was assumed that these allegations were justified (para [40]).

However, on the facts, the Court of Appeal found that there was no real prospect of the officers succeeding in a claim based on a failure to give them notice of the Commissioner’s intention to settle the claim or its terms. The officers argued that had they been warned they would have applied to be joined as defendants. The Court of Appeal endorsed the view that this suggestion was “fanciful”, in circumstances where they were not prepared to give evidence without special measures, which had been refused (para [42]). Summary judgment was accordingly ordered on that part of the claim pursuant to CPR 24.

The Commissioner appeals against the finding of the arguable duty of care to protect against economic or reputational harm in the circumstances of this case. Those circumstances are novel indeed. None of the legal teams instructed in these proceedings could find a single reported case, in any common law jurisdiction, in which a court has found that such a duty exists.

The Commissioner relies on four arguments:

  1. First, the law does not generally recognise a duty of care to avoid financial loss, except in exceptional circumstances.
  2. Second, the law does not normally recognise conflicting duties of care. The duty relied on by the officers would conflict with her duty to conduct litigation in the best interests of the MPS and the public.
  3. Third, there would be an unjustified restriction on the freedom to conduct litigation however a litigant pleases, subject to the rules of the court.
  4. Fourth, the law does not recognise a duty of care on the Commissioner in respect of officers against whom misconduct proceedings are brought.

The Court of Appeal, in disagreement with Mr Justice Jay, considered that this was a case in which it was arguably fair just and reasonable to recognise a duty of care to the officers in respect of financial loss.  If the Supreme Court agrees, this would be a significant extension of tortious liability and one which would make the resolution of already hard-fought litigation even more difficult. The appeal was heard in the first week of March. The Court’s judgment is eagerly awaited.