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“The doctrine of vicarious liability has not grown from any very clear, logical or legal principle but from social convenience and rough justice. The master having (presumably for his own benefit) employed the servant, and being (presumably) better able to make good any damage which may occasionally result from the arrangement, is answerable to the world at large for all the torts committed by his servant within the scope of it.”

So claimed Lord Pearce in Imperial Chemical Industries Ltd v Shatwell [1965] AC 656. The Supreme Court hears the case of The Catholic Child Welfare Society & Ors v Various claimants & Ors on 23 July 2012, and will deal with a novel issue around who can be said to be the “master” and who the “servant”.

Case details can be seen here.

Proceedings in the Court of Appeal

A large number of claimants had brought proceedings alleging physical and sexual abuse by staff at a school, prior to its closure in the early 1990s. The management structure and staffing of the school was complex – reflecting the fact that the purpose of the “school” had changed over time (it had been both a place of detention for young offenders and a care home). Because of this, the organisations responsible for the management of the school had changed numerous times, although throughout the relevant period they had been emanations of the Catholic diocese of Middlesborough (referred to throughout as “the managers”).

The proceedings were brought against these organisations and their representatives, alleging vicarious liability for the actions of school staff in carrying out the abuse. This liability was ultimately accepted by the bodies. However, on the claimants’ appeal, the managers supported contentions that they were not the only defendants to bear vicarious liability.

A number of the staff and the headmaster were drawn from the Institute of the Brothers of Christian Schools, an unincorporated association. The Brothers are bound together by solemn lifelong vows of chastity, poverty and obedience, and their deployment to teaching functions was the responsibility of the Institute. Another consequence of this was that the Institute undertook inspections. After legislative changes in 1933 the employment of staff became the express statutory responsibility of the school’s managers. Whilst the managers could not prevent the Institute’s decisions on the deployment of the Brothers or the headmaster, they retained the clear power to decline to employ a Brother sent by the Institute, even if they chose not to exercise it. Both the claimants and the managers argued that the Institute was also vicariously liable for the alleged abuse.

There was also the question of alleged abuse occurring before 1 October 1973. The managers in the proceedings represent the school only as constituted post-1973, and those claimants who allege abuse occurring before this date rely on a transfer of liabilities provision in an Order made by the Secretary of State in that year, (the managers appealed the effect of the transfer of liabilities). The question of whether the Institute also bears vicarious liability is therefore of potential significance to the pre-1973 claimants; if the Institute is liable, it would be liable for allegations going back beyond October 1973 – which is not necessarily the case for the managers.

Lord Justice Hughes said there’s: “Not much doubt for the principal rationale for this non-fault liability, which is loss distribution”

“D2 being more able to bear the loss than D1, often (although not always) because he can and will in practice insure against it . . . Clearly, however, the ability to bear or insure against the loss is not by itself sufficient to create vicarious liability.”

Hughes LJ reviewed the authorities, drawing out the two stage enquiry in order to establish liability: the relationship between D1 (the alleged tortfeasor) and D2, and the connection between D2 and the act or omission of D1, explaining:

“Both are fact sensitive, and it is a judgment upon a synthesis of the two which is required.”

The authorities showed that employment was not the only relationship that could establish liability – it was clear that vicarious liability could exist between partners and between members of unincorporated associations for the actions of other partners or members respectively. However, that was not to say that the position in relation to an agent was simply the same as that in relation to an employee, as not all relationships created the same connection between D1’s tort and D2.

In determining the necessary “connection”, Lister v Hesley Hall Ltd [2001] UKHL 22 showed that D2 could be vicariously liable despite D1 committing the tort outside D2’s authority or directly against his orders – but it would not be sufficient that his employment by D2 afforded D1 the opportunity to commit the torts:

“It is whether D2 has put D1, for his own purposes, into a position, in which the risk of a tort of the kind committed is inherent.”

Dual concurrent vicarious liability also existed, where there was dual or shared control over D1.

In relation to this case, Hughes LJ was reluctant to challenge the lower court’s decision to reject arguments that the Institute was running the school, or that it exercised effective control over the doing of a Brother’s teaching job, as these were questions of fact.

He went on to find:

“ . . . The power to ordain the deployment of the brothers did not give the Institute the power to insist that any particular person should be accepted and employed by the managers.”

And:

“[The brothers] plainly retained their status as members of the Institute . . . That does not mean, however, that they were, when teaching, in any sense acting on behalf of the other members of the Institute, and more than any member of a professional organisation who accepts employment with that status is acting on behalf of the organisation when he does his job.”

Lastly:

“Applying the first stage of Lister, the Institute had not undertaken a duty of caring for the pupils at [the school] and then delegated or entrusted it to the brother-teachers”.

And on that basis, that the first step in Lister wasn’t met.

On the transfer of liability question, Hughes LJ rejected the managers’ argument that the in order to “subsist” for the purpose of the Secretary of State’s Order that the potential liability must have been “known” by the managers at the time of the Order.

Lord Justice Pill felt that whilst “the ‘social convenience’ and ‘rough justice’ involved in imposing vicarious liability is not confined to the employment relationship . . .”,

“[The claimants and managers] rely on the degree of control exercised by the Institute over the lives of Brothers to establish a vicarious liability for the action of Brothers while employed at an educational establishment, even if it is managed by an authority other than the Institute . . .

“The headmaster and the staff were supplied to the school by the Institute . . . but the Institute was not undertaking the task of managing the school”

Comment

In Lister the issue of the necessary “relationship” was not much at issue, and instead the judgment concentrated on the “connection” between D2 and the alleged tort arguing that some element of “fairness” was required. Discussing the necessary relationship, Lord Hobhouse explained in that case that:

“The liability of the employers derives from their voluntary assumption of the relationship towards the plaintiff and the duties that arise from that relationship and their choosing to entrust the performance of those duties to their servant.”

Is it not the case that in its chosen role to supply Brother-teachers and a headmaster to the school, the Institute has assumed more responsibility than a professional body does towards its members? Would it be rough justice to say so?

Update

In the recent case of JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust [2012] EWCA Civ 938, the Court of Appeal held that a bishop could be held vicariously liable for abuse carried out by a parish priest. Permission to appeal to the Supreme Court was refused – explaining in an Addendum that:

“We acknowledge that the Court’s judgment in this case has widened the scope of vicarious liability extending it from well established situations of employment to relationships that are “akin to employment”. This has ramifications in other areas of the law and to that extent this case does raise a matter of some public importance . . . Nonetheless, we have decided, after some hesitation, to refuse permission to appeal. Rather than deal with a case decided as a preliminary issue, the Supreme Court may prefer to wait till they have a case fought out on all factual issues with a judgment at the conclusion of a fully contested trial. Secondly we are aware that the Supreme Court are hearing the case of Various Claimants v The Catholic Child Welfare Society and the Institute of Brothers of the Christian Schools & Ors on 23rd July and although Stage 1 is not at issue in that case, the Supreme Court will be better able than we are to judge whether this case raises other issues they may wish to hear next.”