Various Claimants v Barclays Bank PLC in the Court of Appeal – confirmation of incursion of the defence of the Independent Contractor

The Court of Appeal has unanimously endorsed the approach taken at first instance in finding Barclays Bank (‘the Bank’) vicariously liable for the sexual assaults of a doctor retained to conduct pre-employment medical examinations of prospective employees.   The Bank’s defence that the doctor was an independent contractor was once again rejected.  

As we reported last year a group of 153 claimants are pursuing claims against the Bank for alleged sexual assaults perpetrated by a Dr Bates between 1968 and 1984.  The allegations emerged in 2013, when a police investigation took place but the doctor had died in 2009 and there had not been any criminal prosecution.

The Court of Appeal confirmed the application of the line of cases that runs from E v English Province of Our Lady of Charity; The Catholic Child Welfare Society; Cox v Ministry of Justice; Mohamud v WM Morrison Supermarkets; and Armes v Nottinghamshire County Council in the development of the law of vicarious liability.

Additionally, the judgment restated that the last three (all Supreme Court decisions) contain the appropriate tests for determining whether vicarious liability applies in situations where there is no contract of service (employment) as opposed to asking: was the alleged tortfeasor an independent contractor?   It was accepted that the three Supreme Court cases had been decided in relation to a  wide variety of factual situations and none where there had been an obvious situation of an independent contractor.  It was also accepted that there was no reported case on the particular facts of these claims – insofar as they have been established because this point is being heard as a preliminary issue in group litigation.

The court held Dr Bates relationship with the Bank was one which could satisfy the first limb of the test for vicarious liability for the following five reasons:

  • The only option open to the claimants was to sue the Bank. Dr Bates was dead and his estate had been distributed.  His professional indemnity insurers would not meet claims for intentional sexual assault.  The Bank and/or its insurers had the means to meet the claims.  However, the Court of Appeal did re-emphasise that deep pockets are not grounds alone for a finding of liability.
  • The medical examination, assessment of the claimant and subsequent report were made for the benefit of the Bank.   It was acknowledged that the claimants might derive benefits such as employment and consequent life insurance but on balance the principle benefit was for the Bank.   Any offer of employment was conditional on the outcome of the  examination. He was the Bank’s chosen doctor and the applicants’ had no choice in the matter.  The Bank made the arrangements in relation to the appointments, the reports were headed with their logo and they paid Dr Bates.
  • The medical examinations were a part of the business activity of the Bank.  They were to enable the Bank to satisfy itself that a present or future employee was physically suitable for the work for which they were, or were to be, employed for.  The workforce was an intrinsic part of the business activity of the Bank and it could not function as a business without it.   The court noted, “There could hardly be a clearer example of that than the selection of suitable employees for a responsible institution in the service sector”.
  • The Bank created the risk of the tort which was allegedly committed by Dr Bates.  It directed where the claimants had to go. Many were young girls being seen by a doctor they did not know, at the Bank’s direction, in his home.  Furthermore, they were required to remove their outer clothing and the Bank directed the doctor take a chest measurement.
  • Control which was held to be the most critical factor here.  When the control that existed as between the Bank and the doctor was reviewed in respect of the identified activity – medical assessments, examinations and reports – the Bank exerted sufficient control.  It was directional in identifying the questions to be asked and physical examinations to be carried out in order to complete a templated form.  Furthermore, the Bank directed which doctor the claimants should see and gave them no choice in the matter.

As regards the second limb of the test the court upheld the judge’s reasoning and found it difficult to see how it could sensibly be argued that the doctor’s acts could not be found to fall within the remit of the task set him and that the alleged abuse was inextricably interwoven with the doctor carrying out of his duties pursuant to his engagement by the Bank.

In relation to the final test of whether it was just and fair to impose liability, the court found the judge correct again.  These claims involve a balancing act between two innocent parties.  This was the only recourse available to the claimants now notwithstanding the fact that had they made their claims earlier, before the doctor’s death, he would have had the financial means to meet the claims personally.

The judgment clearly acknowledges the changing world of work and employment situations and from a claimant point of view looks at substance rather than form.  It recognises that for businesses and their insurers a ‘bright line’ test for the independent contractor would be helpful but states that the principles now established by the Supreme Court cannot be circumvented.   Furthermore, it confirms that there will be cases of independent contractors where vicarious liability will also be established.

It is understood that the Bank’s lawyers and insurers are considering their position because their arguments in relation to the independent contractor defence were not accepted and the broader implications that has.  Furthermore, there are disagreements with the way the court analysed the known facts of the claims in relation to the criteria for the first limb of vicarious liability.

The last has probably not been heard from this decision.


Firth_S-24_printAuthored by Sarah Firth, an associate with BLM

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s