The death of the independent contractor defence? Not quite …

Photo by Hush Naidoo on Unsplash

Today, the UK Supreme Court has decided, in a unanimous judgement, that Barclays Bank PLC is not liable for the wrongful and criminal actions of an independent contractor (a medical doctor) that it engaged over a number of decades – see Barclays Bank PLC v Various Claimants [2020] UKSC 13. This judgement overturns the Court of Appeal’s judgement of 2018 (see Barclays Bank PLC v Various Claimants [2018] EWCA Civ 1670).

The facts of the case

Barclays Bank hired a doctor, Gordon Bates, to carry out medical examinations of members of its staff and applicants for employment at the Bank. These examinations were carried out by Bates at his consulting room located at his private address. The doctor was accused of sexually assaulting 126 people during examinations carried out between 1968 and 1984. These incidents did not come to light until much later.

By this time, the doctor had died and there was no question of his professional indemnity insurance or his estate paying out compensation to his victims. Barclays Bank stated that the doctor was not an employee – he was an independent medical practitioner paid by the Bank to carry out a service as and when required.

Barclays Bank argued that on these grounds they should not be held liable for the doctor’s wrongful actions. In fact, the victims themselves did not claim that Bates was an employee of Barclays, but significantly they did argue that its relationship with the doctor was “akin to employment” and that the delictual act was sufficiently closely connected to the employment or quasi-employment. Bates was under the control of Barclays Bank; by using the services of Bates, the Bank had created the risk of the victims being exposed to his wrongful acts; The medical examinations were carried out on behalf of the Bank; and the Bank had the resources to compensate the victims who now had no practical means of obtaining damages from Bates.

The Court of Appeal

The case was first heard in the English High Court. The High Court decided that Barclays should be held liable for the doctor’s actions. They were benefiting from the service that he was providing and they had the financial resources to compensate the victims (this for organisations using independent contractors will be the really controversial and worrying part of the judgement). 

Barclays appealed to the English Court of Appeal, but the decision of the High Court was upheld.

At paragraph 41 of the judgement, Lord Justice Irwin stated:

The law of vicarious liability has been developed – has been “on the move” – in recent times, most notably in the five critical decisions of: 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.

Significantly, Lord Justice Irwin went on to say (at paragraph 45):

“Moreover, it seems clear to me that, adopting the approach of the Supreme Court, there will indeed be cases of independent contractors where vicarious liability will be established. Changes in the structures of employment, and of contracts for the provisions of services, are widespread. Operations intrinsic to a business enterprise are routinely performed by independent contractors, over long periods, accompanied by precise obligations and high levels of control. Such patterns are evident in widely different fields of enterprise, from construction, to manufacture, to the services sector.”

The UK Supreme Court

Baroness Hale, who gave the unanimous decision of the Court, noted that the doctrine of vicarious liability is “on the move” and “how far that move can take it.”

Baroness Hale summarised the position of Barclays Bank in the following terms:

As Lord Bridge of Harwich stated in D & F Estates Ltd v Church Comrs [1989] AC 177, 208 (echoing the words of Widgery LJ in Salsbury v Woodland [1970] 1 QB 324, 336), “It is trite law that the employer of an independent contractor is, in general, not liable for the negligence or other torts committed by the contractor in the course of the execution of the work”. The Bank argues that, although recent decisions have expanded the categories of relationship which can give rise to vicarious liability beyond a contract of employment, they have not so expanded it as to destroy this trite proposition of law, which has been with us since at least the decision of Baron Parke in Quarman v Burnett (1840) 6 M & W 499, 151 ER 509.

Her ladyship went on to set out the legal argument of the victims of Doctor Bates’ wrongful actions:

The claimants, on the other hand, argue that the recent Supreme Court cases of Christian Brothers, Cox v Ministry of Justice [2016] UKSC 10; [2016] AC 660, and Armes v Nottinghamshire County Council [2017] UKSC 60; [2018] AC 355, have replaced that trite proposition with a more nuanced multi-factorial approach in which a range of incidents are considered in deciding whether it is “fair, just and reasonable” to impose vicarious liability upon this person for the torts of another person who is not his employee. That was the approach adopted both by the trial judge and the Court of Appeal in this case.’

In finding that Barclays Bank was not vicariously liable for Doctor Bates’ wrongful actions, Baroness Hale highlighted the following factors which had clearly influenced the Supreme Court:

  • Doctor Bates was never employed by Barclays
  • He was not paid a retainer by Barclays
  • He could refuse referrals from Barclays
  • He maintained his own medical practice and medical insurance (though whether his policy of indemnity would cover such wrongful acts was a moot point)
  • If he was an employee, he was employed by the local health authority on a part-time basis – and certainly not by Barclays
  • He was, therefore, an independent contractor in business on his own account as regards his relationship with Barclays
  • Barclays was just another client of Doctor Bates

Links to the judgement and the Court’s press release can be found below:

http://www.bailii.org/uk/cases/UKSC/2020/13.html

https://www.supremecourt.uk/cases/docs/uksc-2018-0164-press-summary.pdf

Related Blog article:

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Copyright Seán J Crossan, 3 April 2020