UKSC 56
On appeal from:  EWCA Civ 1106
The Catholic Child Welfare Society and others (Appellants) v Various Claimants (FC) and The Institute of the Brothers of the Christian Schools and others (Respondents)
JUDGMENT GIVEN ON
21 November 2012
Heard on 23 and 24 July 2012
George Leggatt QC
(Instructed by Hill Dickinson LLP)
(Instructed by Jordans Solicitors)
Lord Faulks QC
(Instructed by Wedlake Bell LLP)
LORD PHILLIPS (with whom Lady Hale, Lord Kerr, Lord Wilson and Lord Carnwath agree)
"they should make it their chief care to teach children, especially poor children, those things which pertain to a good and Christian life."
That has remained the mission of the Institute and the mission and "apostolate" of each brother. This appeal is concerned with the legal implications of acts of physical and sexual abuse committed, or alleged to have been committed, by brothers who were, or should have been, pursuing that mission at a residential institution at Market Weighton for boys in need of care called St William's ("the school")
"whether the Institute is responsible in law for the alleged acts of sexual and physical abuse of children at St William's committed by its members."
To a large extent this preliminary issue has been canvassed as if the Institute were a corporate body having separate legal identity. I shall refer to "the Institute" as if this were the case, although it will be necessary in due course to grapple with the nature of the Institute.
An overview of the issues
i) It is possible for an unincorporated association to be vicariously liable for the tortious acts of one or more of its members: Heaton's Transport (St Helens) Ltd v Transport and General Workers' Union  AC 15, 99; Thomas v National Union of Mineworkers (South Wales Area)  Ch 20, 66-7; Dubai Aluminium Co Ltd v Salaam  UKHL 48;  2 AC 366.
ii) D2 may be vicariously liable for the tortious act of D1 even though the act in question constitutes a violation of the duty owed to D2 by D1 and even if the act in question is a criminal offence: Morris v CW Martin & Sons Ltd  1 QB 716; Dubai Aluminium; Brink's Global Services v Igrox  EWCA Civ 1207;  IRLR 343.
iii) Vicarious liability can even extend to liability for a criminal act of sexual assault: Lister v Hesley Hall  UKHL 22;  1 AC 215.
iv) It is possible for two different defendants, D2 and D3, each to be vicariously liable for the single tortious act of D1: Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others  EWCA Civ 1151;  QB 510.
i) The first stage is to consider the relationship of D1 and D2 to see whether it is one that is capable of giving rise to vicarious liability.
ii) Hughes LJ identified the second stage as requiring examination of the connection between D2 and the act or omission of D1. This is not entirely correct. What is critical at the second stage is the connection that links the relationship between D1 and D2 and the act or omission of D1, hence the synthesis of the two stages.
A closer view of the issues
The nature of "the Institute"
i) members of the Order
ii) members of the English Province or the Great Britain Province
iii) responsible for the supervision management or direction of brothers carrying on the work of the England Province or the Great Britain Province, or
iv) Trustees of the 1947 trust before 14 July 1992."
Stage 1: the essential elements of the relationship
i) The employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liability;
ii) The tort will have been committed as a result of activity being taken by the employee on behalf of the employer;
iii) The employee's activity is likely to be part of the business activity of the employer;
iv) The employer, by employing the employee to carry on the activity will have created the risk of the tort committed by the employee;
v) The employee will, to a greater or lesser degree, have been under the control of the employer.
The significance of control
Control and the transfer of vicarious liability
"a situation where the employee in question, at any rate for relevant purposes, is so much a part of the work, business or organisation of both employers that it is just to make both employers answer for his negligence. "
i) The institute was subdivided into a hierarchical structure and conducted its activities as if it were a corporate body.
ii) The teaching activity of the brothers was undertaken because the Provincial directed the brothers to undertake it. True it is that the brothers entered into contracts of employment with the Middlesbrough Defendants, but they did so because the Provincial required them to do so.
iii) The teaching activity undertaken by the brothers was in furtherance of the objective, or mission, of the Institute.
iv) The manner in which the brother teachers were obliged to conduct themselves as teachers was dictated by the Institute's rules.
i) The brothers were bound to the Institute not by contract, but by their vows.
ii) Far from the Institute paying the brothers, the brothers entered into deeds under which they were obliged to transfer all their earnings to the Institute. The Institute catered for their needs from these funds.
Stage 2: The connection between the brothers' acts of abuse and the relationship between the brothers and the Institute.
Vicarious liability for sexual abuse
"…there must be a strong connection between what the employer was asking the employee to do (the risk created by the employer's enterprise) and the wrongful act. It must be possible to say that the employer significantly increased the risk of the harm by putting the employee in his or her position and requiring him to perform the assigned tasks."
"are not to be read as confining the doctrine to cases where the employer is carrying on business for profit. They are based on the more general idea that a person who employs another for his own ends inevitably creates a risk that the employee will commit a legal wrong. If the employer's objectives cannot be achieved without a serious risk of the employee committing the kind of wrong which he has in fact committed, the employer ought to be liable. The fact that his employment gave the employee the opportunity to commit the wrong is not enough to make the employer liable. He is liable only if the risk is one which experience shows is inherent in the nature of the business."
"Experience shows that in the case of boarding schools, prisons, nursing homes, old people's homes, geriatric wards, and other residential homes for the young or vulnerable, there is an inherent risk that indecent assaults on the residents will be committed by those placed in authority over them, particularly if they are in close proximity to them and occupying a position of trust. "
This suggests an endorsement of the Canadian Supreme Court's approach to treating the creation of risk as a basis for the imposition of vicarious liability in cases of abuse.
"is based on the recognition that carrying on a business enterprise necessarily involves risks to others. It involves the risk that others will be harmed by wrongful acts committed by the agents through whom the business is carried on. When those risks ripen into loss, it is just that the business should be responsible for compensating the person who has been wronged. "
This has strong echoes of the "enterprise risk" approach of the Canadian Supreme Court and, indeed, Lord Nicholls went on at para 23 to cite with approval from the judgment of McLachlin CJ in Bazley.