Editorial: Vicarious Liability for Assaults - Aidan Ellis, Temple Garden Chambers

24/03/16. In Mohamud v WM Morrisons Supermarkets Plc, the Claimant went into a petrol station, where he was verbally abused by the attendant who was employed by the Defendant. The employee followed him out of the shop and assaulted and battered him. There was some evidence that the employee’s behaviour was racially motivated.

Should an employer be vicariously liable for these kinds of intentional torts committed by employees? The current test requires the Court to consider whether the tort is so closely connected to the employment that it is fair and just to hold the employer liable. But the vagaries of this test are illustrated by the outcome of Mohamud. The Court of Appeal thought that imposing liability would be a step too far because the employment had merely created the opportunity for the tort. The Supreme Court disagreed, holding that the employee’s conduct was within the field of activities assigned to him by the Defendant, that there was no break in the chain of events when the employee followed the Claimant out of the shop and that the employee’s motivation was irrelevant. That application of the test leads to different results before different courts should not be surprising; to ask whether it is fair and just to hold the employer liable is to invite different answers depending on the Court’s perspective.

The Claimant unsuccessfully invited the Supreme Court to move away from the close connection test towards one of ‘representative capacity’. The argument is that a customer-facing employee is held out as a representative of the employer and so there is a sufficient nexus to impose vicarious liability. This would produce certainty in some cases, usually because it would make the employer liable. But it might be more difficult to apply the analysis to other situations (what about assaults by one employee on another employee?).

The alternative is to narrow the scope of vicarious liability rather than broadening it. Outside narrow categories of people employed in security or to keep order, intentional assaults, including sexual assaults, are far away from the duties that the employer pays its employees to carry out. Moreover, whilst negligence can sometimes be controlled or mitigated by proper procedures and risk assessments, it is more difficult to prevent deliberate wrongdoing. What could the employer in Mohamud actually have done to prevent the assault, other than not employ the individual assailant or not operate a petrol station at all? It is difficult to avoid the impression that, in earlier times, the employee’s behaviour would have been regarded as a ‘frolic of his own’ and vicarious liability would not have attached. A return to a stricter test might also be more consistent with the approach taken to employer’s liability generally, for instance the removal of strict liability for breach of statutory duty.

Whatever the merit of the opposing arguments, the decision in Mohamud makes it clear that the test will remain one of close connection. The uncertainty that creates is to some extent mitigated by the array of precedents which assist in deciding which side of the line any given conduct falls. But unless a more prescriptive test is adopted, Mohamud is unlikely to be the last vicarious liability case on which the higher courts disagree.

Aidan Ellis
Temple Gardens

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Multipliers and Fatal Accident Claims: A Wrong Remedied by the Supreme Court - Harry Trusted, Outer Temple Chambers

1. Knauer v Ministry of Justice is a landmark Supreme Court decision. The speech of Lord Neuberger and Lady Hale (with which five other law lords concurred) finally laid the ghost of the earlier House of Lords decision in Cookson v Knowles [1979] AC 556 which had dictated the basis of fatal accident calculations for nearly forty years.

2. In simple terms, the Cookson decision had meant that the multiplier for future loss following a death was calculated from the date of death and not from the date of trial. Hence if the trial was some years after the death, dependents would lose a significant part of their damages, especially if the ‘but for’ life expectancy was comparatively short. This approach was criticised by the Law Commission in their report entitled Claims for Wrongful Death [1999] Law Com 263. It was also criticised by the members of the Ogden Working Party (see comments by Robin de Wilde QC in paragraphs 19 -2 1 of the introduction to the 7^th Edition), reproduced at page 48 of ‘Facts and Figures 2015/16”.

3. It is instructive to ask why their lordships decided Cookson as they did. In paragraph 12 of their speech, Lord Neuberger and Lady Hale remind us that in 1979...

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UK Insurance Limited v Thomas Holden [2016] EWHC 264 (QB) - Matthew Channon, University of Exeter

18/03/16. This potentially significant case in Motor Insurance and the interpretation of EU Law was heard before Judge Waksman QC in the High Court. The case concerned substantial damage in excess of £2 million, after a car, which was being repaired at the time, caught fire which spread to an adjoining property. The property insurers attempted to subrogate the claim to the motor insurers, who denied liability. The motor insurers claimed that that the Policy only insured the driver in respect of third party claims resulting from an accident involving his car while being used on a public road or other public place. Here, however, it was on private premises and was not in any relevant sense being used; but rather it was being repaired. Alternatively the property insurers claimed that the policy covered such use of the vehicle on private land.

Judgement

Judge Waksman paid particular emphasis to the terms of the actual policy, which seemed, “not altogether happily worded¹”. The judge was forced to re-interpret the policy terms so as to fit its purpose. For example the term, "if you have an accident in your vehicle" was deemed too narrow, as the policy would have responded if an accident had occurred when the insured was outside his vehicle, such as, for example if the handbrake failed. This was, therefore, clearly not compliant with S 145 (3) of the Road Traffic Act 1988 which refers to damage, “caused by or arising out of the use of a vehicle".

The judge then goes onto examine the issue of as to whether the policy covers and should cover accidents that occur on private property. The judge rejected UK Insurance’s argument that the policy is impliedly limited to roads. The policy gave no express limitation in its terms to roads. The judge stated that although the RTA provides compulsory cover to at least “roads and other public places²”, it does not mean that the policy cannot be more generous.

The judge then went a step further and examined the EU case of Vnuk³. In Vnuk the European Court of Justice held that use of the vehicle extended to use which is consistent, “with the normal function of that vehicle⁴” and further held that the ambit of the first Motor Insurance Directive was not limited to public roads but could also include private property. Judge Waksman found difficulty in interpreting the RTA, which limits insurance coverage to “roads or other public places”, in light of the Vnuk judgement. To construe the Act in such a way, the Judge argued, would "cross the line⁵" between interpretation and amendment. The Judge stated “all I can do is to say that in my judgment s145 (3) (a) is incompatible with Article 3 (1) of the Third Directive as interpreted by the ECJ in Vnuk⁶”

Finally the judge had to decide whether repair would fall within “the normal function” of that vehicle, the judge looked elsewhere in the Commonwealth to decide this issue. The judge decided that the Canadian approach which is to find that repair does constitute use⁷ is too broad and seemingly preferred the Australian interpretation which is to treat use as more than simply locomotion⁸ but to “draw a line” at repair⁹. Accordingly, UK insurance’s policy did not cover the use of the vehicle in question and therefore the property insurers paid for the damage.

Comment

This is a very significant case especially in relation to the interpretation of EU Law and Vnuk. It has been more than a year since Vnuk was decided and this was the first time that a UK Court has expressly recognised that there are clear inconsistencies between the wording of the RTA and Vnuk, this could also extend to the Motor Insurers’ Bureau Uninsured Drivers Agreement which also does not compensate for accidents on private land. These inconsistencies could lead to Francovich action against the UK in the future as there is now clear evidence from the EU and UK that compulsory third party insurance must cover for private land. It is further evident that, despite the accidental extension to private land in this case due to unclear policy wording, Vnuk has been ignored by motor insurers due to the potential for vast increases in their premiums. It is unlikely that this will change in the near future due to the potential British exit from the EU.

A further point to note from this case, is the unclear and outdated policy wording from UK Insurance Limited. The policy wording was clearly not compliant with the RTA and was drafted in very narrow terms, whether this was purposeful or simply poor drafting is unclear. Insurers should be careful when drafting their policies so as to ensure that it is worded appropriately and complies with relevant legislation, including European Union law.

Finally the issue as to the meaning of “use” is still unclear and this case, if appealed, could aide in finding a definition of ‘use’ without going to the Commonwealth. Whether or not ‘use’ could cover repair is not an easy answer as can be seen from the interpretation given by different jurisdictions, it seems that the judge in this case was reluctant to expand the scope of compulsory insurance too far so as to incorporate a vast number of claims which could occur within repair garages.

Matthew Channon
PhD student at Exeter University
Editor of Legal Issues Journal