ON APPEAL FROM THE COUNTY COURT AT CENTRAL LONDON
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE IRWIN
LORD JUSTICE SINGH
| NASSIR KAFAGI
|- v -
|JBW GROUP LTD
Mr David R White (instructed directly by the Defendant under the Public Access Rules) for the Respondent
Hearing date: 18 April 2018
Crown Copyright ©
Lord Justice Singh :
" Sean Boylan ('SB') and Craig Fenwick ('CF'), employees or agents duly appointed or engaged by D under contracts of service/for services and acting on the specific and direct authority and instructions of D, forcibly and unlawfully entered C's home assaulted and battered him and proceeded to execute an unlawful levy in the sum of £792-04 by way of fraudulent misrepresentations." (Para. 3 of the Particulars of Claim)
The judgment of the District Judge
"Is the Defendant vicariously liable for the actions of Mr Boylan and Mr Fenwick? This will depend on whether Mr Boylan and Mr Fenwick were employees of the Defendant, or merely subcontractors. If Mr Boylan and Mr Fenwick were subcontractors, the liability of the Defendant would have to be found in breach of a non-delegable duty. No such duty, or breach of it, has been pleaded."
"in my judgment the evidence quite clearly shows that the reality was that Mr Boylan was employed at the relevant time on a self-employed basis, and Mr Fenwick was not employed, or in any form of contractual relationship with the Defendant at the relevant time." (Emphasis added)
" It therefore follows inevitably that the claim brought by Mr Kafagi must be dismissed."
The first appeal
"This depended firstly on whether these men were employees of JBW or whether they were independent contractors who were self-employed."
" The distinction which matters in the present case is between an employee of JBW and a person who may carry out work for JBW under some other relationship. This is the important distinction to make, as JBW can only be vicariously liable for torts of their employees, although there are exceptions to this rule."
" In my judgment DJ Coonan applied the correct legal test to the evidence before her and the conclusion that she reached, that neither SB nor CF were employees of JBW at the material time and therefore D cannot be vicariously liable for the alleged torts they committed, cannot be faulted."
Permission to appeal to this Court
"In the light of the decision in E G Cox v Ministry of Justice  UKSC 10 the question of whether a tortfeasor was an employee or an independent contractor can no longer be regarded as dispositive of vicarious liability. Attention needs to be focussed on three questions identified in paragraph 24 of Lord Reed's judgment in that case. Although the judgment in Cox was delivered after the District Judge and Recorder gave their judgments in this case, it does not appear that their attention was drawn to earlier relevant Supreme Court authority, namely Various Claimants v The Catholic Child Welfare Society and others  UKSC 56. In consequence they appear to have adopted too narrow a focus.
Although the law on this topic must now be regarded as broadly settled, its application to the activities of bailiffs and others involved in enforcement is of potentially wider significance. I also take account of the strength of the argument identified above as it appears to me at the moment, and the fact that this was the sole basis on which the action was dismissed. I consider these to be sufficiently compelling reasons for granting permission to appeal."
Recent authorities on vicarious liability
"The relationship that gives rise to vicarious liability is in the vast majority of cases that of employer and employee under a contract of employment. The employer will be vicariously liable when the employee commits a tort in the course of his employment. There is no difficulty in identifying a number of policy reasons that usually make it fair, just and reasonable to impose vicarious liability on the employer when these criteria are satisfied: (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." (Emphasis added)
"At para. 35 above, I have identified those incidents of the relationship between the employer and employee that make it fair, just and reasonable to impose vicarious liability on a defendant. Where the defendant and the tortfeasor are not bound by a contract of employment, but their relationship has the same incidents, that relationship can properly give rise to vicarious liability on the ground that it is 'akin to that between an employer and employee'. That was the approach adopted by the Court of Appeal in E's case  QB 722."
"56. In the context of vicarious liability the relationship between the teaching brothers and the institute had many of the elements, and all the essential elements, of the relationship between employer and employees. (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.
57. The relationship between the teacher brothers and the institute differed from that of the relationship between employer and employee in that: (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."
"20. The five factors which Lord Phillips mentioned in para. 35 [of the Christian Brothers case] are not all equally significant. The first that the defendant is more likely than the tortfeasor to have the means to compensate the victim, and can be expected to have insured against vicarious liability did not feature in the remainder of the judgment, and is unlikely to be of independent significance in most cases. It is, of course, true that where an individual is employed under a contract of employment, his employer is likely to have a deeper pocket, and can in any event be expected to have insured against vicarious liability. Neither of these, however, is a principled justification for imposing vicarious liability. The mere possession of wealth is not in itself any ground for imposing liability. As for insurance, employers insure themselves because they are liable: they are not liable because they have insured themselves. On the other hand, given the infinite variety of circumstances in which the question of vicarious liability might arise, it cannot be ruled out that there might be circumstances in which the absence or unavailability of insurance, or other means of meeting a potential liability, might be a relevant consideration.
21. The fifth of the factors - that the tortfeasor will, to a greater or lesser degree, have been under the control of the defendant - no longer has the significance that it was sometimes considered to have in the past, as Lord Phillips immediately made clear. As he explained at para. 36, the ability to direct how an individual did his work was sometimes regarded as an important test of the existence of a relationship of master and servant, and came to be treated at times as the test for the imposition of vicarious liability. But it is not realistic in modern life to look for a right to direct how an employee should perform his duties as a necessary element in the relationship between employer and employee; nor indeed was it in times gone by, if one thinks for example of the degree of control which the owner of a ship could have exercised over the master while the ship was at sea. Accordingly, as Lord Phillips stated, the significance of control is that the defendant can direct what the tortfeasor does, not how he does it. So understood, it is a factor which is unlikely to be of independent significance in most cases. On the other hand, the absence of even that vestigial degree of control would be liable to negative the imposition of vicarious liability.
22. The remaining factors listed by Lord Phillips were that (1) the tort will have been committed as a result of activity being taken by the tortfeasor on behalf of the defendant, (2) the tortfeasor's activity is likely to be part of the business activity of the defendant, and (3) the defendant, by employing the tortfeasor to carry on the activity, will have created the risk of the tort committed by the tortfeasor."
"Lord Phillips's analysis in the Christian Brothers case  2 AC 1 wove together these related ideas so as to develop a modern theory of vicarious liability. The result of this approach is that a relationship other than one of employment is in principle capable of giving rise to vicarious liability where harm is wrongfully done by an individual who carries on activities as an integral part of the business activities carried on by a defendant and for its benefit (rather than his activities being entirely attributable to the conduct of a recognisably independent business of his own or of a third party), and where the commission of the wrongful act is a risk created by the defendant by assigning those activities to the individual in question."
" It is intended to provide a basis for identifying the circumstances in which vicarious liability may in principle be imposed outside relationships of employment. It results in an extension of the scope of vicarious liability beyond the responsibility of an employer for the acts and omissions of its employees in the course of their employment, but not to the extent of imposing such liability where a tortfeasor's activities are entirely attributable to the conduct of a recognisably independent business of his own or of a third party. " (Emphasis added)
" It is sufficient that there is a defendant which is carrying on activities in the furtherance of its own interests. The individual for whose conduct it may be vicariously liable must carry on activities assigned to him by the defendant as an integral part of its operation and for its benefit. The defendant must, by assigning those activities to him, have created a risk of his committing the tort. "
"Under the doctrine of vicarious liability, the law holds a defendant liable for a tort committed by another person. Plainly, the doctrine can only apply where the relationship between the defendant and the tortfeasor has particular characteristics justifying the imposition of such liability. The classic example of such a relationship is that between employer and employee. As was explained in Cox and in the earlier case of the Christian Brothers, however, the doctrine can also apply where the relationship has certain characteristics similar to those found in employment, subject to there being a sufficient connection between that relationship and the commission of the tort in question." (Emphasis added)
"Although the picture presented is not without complexity, nevertheless when considered as a whole it points towards the conclusion that the foster parents provided care to the child as an integral part of the local authority's organisation of its child care services. If one stands back from the minutiae of daily life and considers the local authority's statutory responsibilities and the manner in which they were discharged, it is impossible to draw a sharp line between the activity of the local authority, who were responsible for the care of the child and the promotion of her welfare, and that of the foster parents, whom they recruited and trained, and with whom they placed the child, in order for her to receive care in the setting which they considered would best promote her welfare. In these circumstances, it can properly be said that the torts committed against the claimant were committed by the foster parents in the course of an activity carried on for the benefit of the local authority."
" There are countless cases where vicarious liability has been imposed for torts committed by professional persons who carry out their work without close supervision. "
The Appellant's submissions
The Respondent's submissions
" The stabbing of Mr Mattis represented the unfortunate, and virtual culmination of the unpleasant incident which had started within the club, and could not fairly and justly be treated in isolation from earlier events, or as a separate and distinct incident. Even allowing that Cranston's behaviour included an important element of personal revenge, approaching the matter broadly, at the moment when Mr Mattis was stabbed, the responsibility of Mr Pollock for the actions of his aggressive doorman was not extinguished. Vicarious liability was therefore established. "
Analysis of the main issue
"Last, what to our mind is decisive is the fact that Pickfords supplied not the two welders contracted for by OT, but four. This is a factor that the judge did not address. We can see no basis on which it could be said that OT was vicariously liable for employees for whose work they did not contract. There was no evidence, and certainly no finding, that OT knew that four men were to be supplied. We ask, rhetorically, which of the four were OT entitled to control, and for which of the four were they liable? What basis is there for distinguishing between the vicarious liability for two of them and the vicarious liability for the other two? Our answer is: none."
Lord Justice Irwin :
Lord Justice Underhill :