The Supreme Court was unanimous in its decision that Barclays was not liable for the actions of Dr Bates, who was a true independent contractor.
The test for vicarious liability requires:
- A relationship between the two parties that makes it right that one should pay for the fault of the other. This was examined in this case.
- A sufficient connection between that relationship and the wrongdoing. This was considered in the Morrisons data protection case.
Although relationships that give rise to vicarious liability have historically been limited to employer-employee relationships, the Claimants unsuccessfully argued that this has been broadened recently to include a wider range of relationships.
The Court disagreed. Whilst an employer can be vicariously liable for the acts of someone who is in a relationship that is akin to employment, but is not an employee, the distinction between these relationships and that of an independent contractor remained.
The Court found that Dr Bates was ‘clearly’ not an employee, or anything close. He had a broad portfolio of clients and patients, including local hospitals and mining companies, and his work for Barclays was a relatively minor part of his practice. Although Barclays arranged the examinations, Dr Bates was not paid a retainer and charged a fee for each report. He was also able to refuse to carry out an examination and was likely to have had his own medical liability insurance. The Court compared him to others providing work for Barclays, such as window cleaners or auditors, who were also not in a relationship akin to employment. Barclays was therefore not liable for Dr Bates’ actions.
Interestingly, the Court suggested that assessing whether an individual has the intermediate status of a worker may help to assess whether they are a true independent contractor for the purposes of vicarious liability. However, Lady Hale stated that it would be ‘going too far down the road to tidiness’ for vicarious liability and worker status to be aligned.
This case is a useful restatement on the law of vicarious liability that has provided welcome clarification to employers that they will not be vicariously liable for wrongs committed by independent contractors. It further demonstrates the importance of ensuring that the status of all staff and contractors is clearly established at the outset of the relationship.
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