Vicarious Liability: From the show to the after party to the hotel lobby?
Friday 26th October 2018
As we approach the Christmas party season Bellman v Northampton Recruitment Limited offers a reminder of the possible extent of an employer’s liability for its employees.
An employer is vicariously liable where an employee (or person in a relationship similar to employment) commits an act of wrongdoing and the act is sufficiently connected with the position in which the wrongdoer is employed so as to make it just and fair to hold the employer responsible.
Mr Bellman was a sales manager for the respondent recruitment firm. It was a small company, and Mr Major was the firm’s MD and ‘directing mind’. At the end of the company Christmas party Mr Major arranged and paid for taxis to transport staff to a hotel where the party continued, with drinks mainly paid for by the company.
After a couple of hours, there was a discussion regarding company politics between Mr Major and Mr Bellman. Feeling that he was being challenged, Mr Major summoned the remaining staff and began to lecture them on his authority. When this was questioned by Mr Bellman, Mr Major punched him causing significant brain damage.
Decision and comment
While finding for Mr Bellman, the Court of Appeal was quick to emphasise that it was heavily influenced by the unusual facts of the case. Therefore, this is not to say that employers will be liable for all wrongful acts done by their employees.
The Court pointed to the fact that Mr Major owned the company, was its most senior employee and directing mind, and had full control over how he conducted his role. Significantly, he was wearing his managerial hat and establishing his authority in that role at the time of the attack. Additionally, the party was not a purely social event happening to involve colleagues, but a follow-on from an organised work event attended by most of the company’s employees, where the company paid for taxis and drinks.
The case shows that vicarious liability will arise more readily for an MD – and probably other senior managers – than for junior employees. That said, the issue remained whether the wrongful act took place in the exercise of managerial authority (no matter how misguided). In this case it did. As such, there is limited risk of employers being exposed to liability, provided of course the cause of the seasonal scrap is not connected with work.