Supermarkets, sexual assault, surrogacy and shipping

These were the settings for four Supreme Court judgments today, delivered by video link given the prevailing restrictions. Principles of vicarious liability were raised by two cases. Recovery of by way of damages of sums paid under a commercial contract for surrogacy was raised in a third and the fourth concerned recovery by an insurer of a settlement which it argued was vitiated by misrepresentation. This blog is necessarily short and serves only as a summary of today’s judgments.

In the two cases on vicarious liability – Various Claimants v Morrisons and Various Claimants v Barclays Bank – the court refused to stretch the principles of vicarious liability to apply to the facts at hand. Both were covered in brief in our newsflash today.

Barclays involved sexual assaults committed by a doctor engaged to screen potential employees of the bank. The judgment began, perhaps predictably enough, by citing Lord Philips’s dictum in the Catholic Child Welfare / Christian Brothers case from 2012 that “The law of vicarious liability is on the move.”  Lady Hale analysed the recent and well-known cases (such as Cox and Mohamud) before concluding that “There is nothing, therefore … to suggest that the classic distinction between employment and relationships akin or analogous to employment, on the one hand, and the relationship with an independent contractor, on the other hand, has been eroded.”

Although this is the end of the matter for the time being, Lady Hale’s conclusion is very difficult indeed to reconcile with what Irwin LJ held in this case in the Court of Appeal, ie “It is clearly understandable that a ‘bright line’ test, such as is said to be the status of independent contractor, would make easier the conduct of business for parties and their insurers. However, ease of business cannot displace or circumvent the principles now established by the Supreme Court.”

The Morrisons case arose from theft of co-workers’ personal data by an employee who then maliciously published it online. It touches on the other limb of vicarious liability, ie the connection of the tortious act with the principal’s activity. This angle was inevitable given the employment relationship is the classic setting for vicarious liability. Looking at the acts in question in this case, Lord Toulson found that they fell outside that relationship or close connection and therefore would not establish the liability of the employer. He reasoned that “a temporal or causal connection does not in itself satisfy the close connection test” but that what was required was to decide whether “the employee was engaged, however misguidedly, in furthering his employer’s business [or whether] the employee is engaged solely in pursuing his own interests.” (per Lord Nicholls in Dubai Aluminium [2003]).

It is probably too early to say if these two Supreme Court decisions are truly fact-specific and/or if they mark some kind of judicial line in the sand marking the limits of vicarious liability. The latter seems a little less likely – despite unanimous decisions in both cases – given that: (a) the doctrine has been continuously evolved by the Supreme Court itself during the last decade or so (b) it has yet to be fully tested in the context of torts arising in ‘gig economy’ working arrangements and (c) the very fine (and, it is suggested, somewhat academic) distinctions set out by Lady Hale and Lord Toulson could prove quite difficult to apply in practice.

Damages for surrogacy arrangements were raised in a third case, XX v Whittington Hospital. The claimant was rendered infertile as a result of medical negligence and the question was whether sums due to be paid to a commercial surrogate mother in California, where state law permitted such a contract, should be recoverable in damages in England despite such arrangements being illegal and unenforceable here.

Lady Hale led a majority decision in favour of recovery. To some extent she was reviewing her own homework because the key English authority was her decision in 2000 in Briody v St Helen’s & Knowsley Area Health Authority. She signalled the change of approach early in her judgment noting that “the persuasiveness of that ratio is inevitably affected by the developments in law and social attitudes which have taken place since”.

All aspects of surrogacy are very clearly complex issues and matters which may well be better suited to legislative as opposed to judicial norms. Possibly with that in mind Lady Hale noted the June 2019 Law Commission consultation “Building families through surrogacy: a new law” which is expected to produce a final report and draft Bill in 2022. Lady Hale was a member of the Law Commission before she became a judge.

The fourth case of note, Aspen Underwriting, is in an entirely different field: shipping law. We will cover this in a separate blog later this week.


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Alistair Kinley, Director of Policy & Government Affairs alistair.kinley@blmlaw.com

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