Is an Employer Liable for the Acts of Independent Contractors?

…with employers being held to be liable for the actions of those in positions 'akin to employment', as well as those who are directly employed.

In the case reported below, the Supreme Court was asked to determine whether a self-employed third party contractor could be said to be in a position 'akin to employment', making the employer liable for their actions.

Barclays Bank v Various Claimants

As part of its recruitment processes, between 1968 and 1984, Barclays Bank engaged a medical practitioner to carry out medical examinations on prospective employees. The bank scheduled the appointments and communicated the details to the respective applicants who attended unaccompanied.

Examinations were carried out in the doctor's home and he was paid a fee to prepare a pro-forma report on each applicant that underwent the examination. There was no retainer and the doctor was not under any obligation to accept bookings from the bank. The doctor also had a wider portfolio of clients and patients.

Sometime after the doctor had passed away, a group action was brought against the bank on the basis that it was vicariously liable for sexual assaults allegedly carried out by the doctor during the medical examinations.

In 2017, a judge ruled that the bank was vicariously liable for any proven assaults which took place. On the basis that the doctor's wrongdoing occurred as a result of activity undertaken by him on behalf of the bank, under its control and for its benefit, and as an integral part of its business activity, the judge concluded that the relationship between the parties was sufficiently akin to employment.

The Court of Appeal agreed that the bank was vicariously liable and the case moved to the Supreme Court.

Supreme Court Decision

The Supreme Court overturned the decision of the lower courts. They held that, whilst a person can be held vicariously liable for the acts of someone who is not their employee, the self-employed medical practitioner in this case was in business on his own account. As a result, the relationship with the bank was not 'akin to employment', so did not give rise to vicarious liability. Therefore, the bank was not liable for the alleged assaults committed by the doctor.

The Limits of Vicarious Liability

In this decision, the Supreme Court has identified the limits of vicarious liability. Employers will not be liable for the acts of the genuinely self-employed who are in business on their own account. Of course, the facts of each case will be different. If the doctor in this case had been paid a retainer, or had no other clients, the outcome might have been different.

Therefore, it is important to do all you reasonably can to ensure that written agreements exist with self-employed contractors and that those agreements, and the way the contractors carry out their work, are consistent with self-employed status.

For specialist legal support with claims against a third party contractor, please do not hesitate to contact Michael Halsey in our Employment Law team on 07554 432829, or complete the form below.