Vicarious liability can be a formidable challenge for employers, causing responsibility to extend beyond the individual and creating shared accountability for employers and employees alike. Below, Jonathan Edwards, Partner, Head of Insurance at Harrison Clark Rickerbys Solicitors delves into the key liability risks employers face, offering insights into mitigation strategies and a proactive approach to safeguard organisations from liability risk.

What is vicarious liability?
Vicarious liability is when an employer is found liable for harms caused by an employee in the course of work. In practice, this liability often occurs due to the unsanctioned actions of another employee, such as when a workplace injury is caused by the negligence of another employee.

Recent figures from the Health and Safety Executive showed there were more than 600,000 non-fatal workplace injuries reported in the year ending 2023. It is possible a significant number of these injuries could result in vicarious liability claims if an employee is found to have been negligent and there is a sufficiently close link between the employee’s conduct and their employment.

The principle of vicarious liability allows the aggrieved individual to claim against the employer for their harm, which is often an easier way of securing compensation than claiming against an individual, as organisations tend to have deeper pockets.

Who can be held vicariously liable and how?
An employer will not be liable for every wrongful act committed by its employees. Courts will have to consider whether there is a close link between the wrongful conduct of the employee in question and either the business of the employer or the nature of the employment.

Whilst the courts have been reluctant to provide a definitive list of factors when determining an employer’s vicarious liability, the court will take into account:

• The role of the employee in question – whether they were in a position of authority over the victim and had been placed there by the employer.
• The duties and responsibilities of the employee in relation to the nature of the act committed by the employee.
• Whether the employer was aware of the conduct or behaviour of the employee, or should have been aware.
• Whether the conduct was continuous or repetitive.
• The magnitude of the risk.
• The role, influence or authority of the person engaging in the conduct.
• Any other relevant circumstance.

How can employers defend a claim of vicarious liability?
For an employer to defend a claim of vicarious liability, they need to be able to show there is a reason the action should not be attributed to them. For example, that the act was so far outside the scope of the perpetrator’s employment or that the employer took all reasonable steps to prevent the conduct from occurring.

How can employers mitigate the risk of vicarious liability claims?
Whether an employer can be said to have taken all reasonable steps to avoid vicarious liability will depend on the nature of the wrongful conduct, the size of the employer and the nature of the work.

As vicarious liability claims often arise out of a workplace injury, a good starting point is for employers to ensure employees roles and responsibilities are clearly defined and that safe systems of work are in place.

Employers should:

• Clearly define employees’ roles and responsibilities.
• Provide training to employees about the nature of their role and duties in the workplace, including health and safety training where necessary.
• Implement policies which clearly set out the conduct expected from employees.
• Regularly review and update policies and procedures to ensure they are up to date.
• Keep records of training attendance and provide follow up training when required.
• Ensure complaints are dealt with in an open way and ensure parties are supported during a complaint investigation.

Whilst the above measures can mitigate the risk of vicarious liability claims, it is difficult to predict how the courts will interpret the law and determine a claim.

Two recent cases show the different approaches courts can take when deciding vicarious liability:

Bellman v. Northampton Recruitment Ltd
In this case, the managing director of the company punched an employee following an argument in a pub after the company Christmas party. The court considered various factors when determining whether the company was vicariously liable, including:

• The managing director’s role as a manager.
• That the incident happened after a work event.
• That the company was paying for the drinks at the pub.
• That the company had paid for the employee to stay overnight at a nearby pub.

Ultimately, the court considered the managing director was not merely there as another drinker but was present in his role as managing director when the incident happened and therefore found the company vicariously liable.

WM Morrisons Supermarket plc v. Various Claimants
Conversely, the courts took a different approach in a case where an internal auditor employed by Morrisons uploaded the personal pay data of other employees to a public website and sent the data to national newspapers.

When considering whether the supermarket was vicariously liable, the court had to decide whether the act was close enough to the employee’s authorised role that it could be considered to have been done in the “ordinary course of his employment”.

In this case, the employee was instructed to send employee pay data to an external auditor. The employee bore a grudge against the supermarket as he had been disciplined for minor misconduct earlier that year and shared the data more broadly to further his personal vendetta against Morrisons.

The Supreme Court determined the employee was not engaged in pursuing the supermarket’s interests, he was engaged on “frolic of his own” in pursuing a personal vendetta against Morrisons, and ultimately determined the supermarket was not vicariously liable.