TUPE: no transfer of liability for harm caused to third parties

Background

In ABC v Huntercombe and others, the claimant brought a personal injury claim alleging she had suffered harm while an inpatient at a hospital in Maidenhead. The hospital was operated by Huntercombe (the first defendant), but its business was later sold to a new provider. The case raised the question of whether legal responsibility for the alleged harm had transferred to the new provider along with the staff involved.

Although the claim was brought by a member of the public, the court had to consider the scope of TUPE, which is designed to safeguard employee rights following a transfer. The case therefore provides useful practical reminders for employers about what does (and does not) transfer when a business changes hands.

The court’s decision

The court ruled that the liability for the alleged wrongdoing did not transfer. TUPE is intended to protect the rights of employees in a transfer situation. As such, only liabilities that arise directly from the employment relationship, such as obligations owed by an employer to its own staff, are transferred. Where harm is caused to a third party, even if the alleged wrongdoing was carried out by a transferring employee, the liability does not transfer with the employee.

The court made clear that vicarious liability for acts committed against third parties is not sufficiently connected to the employment relationship to fall within the scope of TUPE. The protections are aimed at preserving rights for transferring staff, not at widening liability for events involving non-employees.

Why this matters for employers

This decision reinforces a clear boundary around TUPE’s reach. It confirms that employers taking over a business will not automatically inherit liability for harm caused by employees to people outside the organisation. TUPE focuses on ensuring continuity of employment rights and protections for staff, not on transferring broader legal responsibilities to external claimants.

Learning points

This case helps clarify TUPE’s core purpose. It confirms that when a business or service transfers to a new provider, the protections are limited to rights and liabilities connected to employees. Claims brought by patients, customers, or other third parties are unlikely to transfer, even where they relate to the actions of staff who move to the new employer. For organisations involved in business acquisitions or service transitions, this provides welcome reassurance that TUPE does not expose them to the risk of inheriting unrelated third-party claims.

For more information or advice, please contact Matt Verrier in our Employment team on 07386 697 005.