JGE v The Portsmouth Roman Catholic Diocesan Trust

I start with a problem that troubles me. Who is the real defendant? There was some understandable confusion about whom to sue and the claimant’s solicitors sought clarification from the second defendants’ solicitors. It was agreed that the Trustees of the Portsmouth Roman Catholic Diocesan Trust be named as nominal defendants for the Roman Catholic Bishop of Portsmouth who, at the material times between 1970 and 1972 was the late Derek Worlock, and/or the trustees in office at that time whose identity was unknown when the claim was brought. The case has proceeded effectively against the Bishop though it is the trustees who will be covered by the relevant insurance should liability be established. Intuitively one would think that, as a priest is always said to be “a servant of God”, the Roman Catholic Church itself would be the responsible defendant. But the Church has no legal personality and cannot be party. I shall therefore concentrate on the Bishop. The central question for decision is whether the bishop employed Father Baldwin and, if not, was the relationship between them akin to employment.

Although in his interesting article A Theory of Vicarious Liability (2005) Alberta L.R 1, p.2, J.W. Nevers introduces his paper saying, “Vicarious liability occupies a mysterious place in the common law”, it remains firmly entrenched in tort law despite speculation about the need for some rationalisation and reform. It imposes liability on D (the Defendant) to compensate C (the Claimant) for the damage suffered by C caused by the negligent or other tortious act of A (the Actor) even though D is not personally at fault at all. It is thus a form of strict liability. That may seem harsh on D. As O.W. Holmes observed (5 Harv. L. R 1, 14): “I assume that common sense is opposed to making one man pay for another man’s wrong, unless he actually has brought the wrong to pass according to the ordinary canons of legal responsibility.” That view may account for the alternative theory (for which there is some academic support and which may be gaining ground) for fixing D with personal liability by extending the range of non-delegable duties for which he is responsible. So how did this apparently unjust rule develop and, more importantly, what is the ambit of the rule today?

Although Pollock claims to have been the first to coin the phrase (see Pollock-Holmes Letters, vol i, p. 333), its origins are buried deep in the medieval law. It seems to have started in circumstances where the master had expressly commanded his servant to commit a wrong and it developed to encompass acts done by implied command. “Every act which is done by a servant in the course of his duty is regarded as done by his orders and consequently is the same as if it were the master’s own act”, Bartonshill Coal Co v McGuire (1858) 3 Macq 300, 306 per Lord Chelmsford . The traditional, but hard- worked, phrases respondeat superior and qui facit per alium facit per se may have been apposite then, though as Lord Reid acidly observed in Stavely Iron & Chemical Co Ltd v Jones [1956] AC 627, 643, “the former merely states the rule badly in two words, the latter merely gives a fictional explanation of it.” Salmond credits Sir John Holt (1642-1710) with the beginning of the adaptation of those ancient notions to the needs of a modern society. As the Chief Justice said, “Seeing somebody must be a loser by this deceit, it is more reasonable that he, that employs and puts his trust and confidence in the deceiver, should be the loser than the stranger”, Hern v Nichols (1700) 1 Salk 289. By the end of the eighteenth century there was a shift away from the notion of implied command arising from the relationship of master and servant. In its place grew an acceptance by the middle of the next century, aided by the great Victorian judges and the recognition of a changing and developing industrial society, that the existence of the master/servant relationship was itself enough to impose liability on the master if the servant was acting within the scope of his employment. Lord Brougham explained, “The reason I am liable is this, that by employing him I set the whole thing in motion; and what he does, being done for my benefit and under my direction, I am responsible for the consequences of doing it.” So it should be: the master has the “deeper pockets” per Willes J. in Limpus v L.G.O. Co (1862) 1 H. & C. 526, 539.

That was the established law on which we cut our teeth. We learnt that disputes about vicarious liability centred on two questions. First (the stage 1 with which we are concerned in this appeal), the issue was whether this was a true relationship of employer/employee (the notion of master/servant having become “obsolete” per Lord Steyn in Mahmud v B.C.C.I. [1998] A.C. 20, 45/46, though “servant” remains hard to eradicate from the language as in the time-honoured pleading “his servants or agents…”). Secondly, our stage 2, the enquiry was whether A was acting within the scope of his employment or whether he was on a frolic of his own. At the first stage the contrast has traditionally been made between the relationship the employer had with his employee and the one he had with an independent contractor. The analysis examined the difference between a contract of service and a contract for services. Control became the important factor. Was D instructing A how to do the work or contracting with him as to what work was to be done? But control has not survived as the crucial criterion for establishing vicarious liability and other tests for distinguishing the employee from the independent contractor developed as I must explain later in this judgment at [64] to [69] when considering whether vicarious liability can be extended to a quasi employee who is in a relationship with his “employer” which is only akin to employment. Although there is no dispute about it, I must, for the sake of painting the full picture, consider whether there was any contract of service between Father Baldwin and his bishop.

It is common ground that the answer to that question is ‘No’. MacDuff J. concluded that the relationship between Father Baldwin and his bishop differed from employer/employee in significant ways, but how significant the differences are must await further discussion. There are a string of cases involving the employment position of ministers of religion of many denominations and, in order to see the picture in the round, it is worth reviewing them, if only shortly.

Whether or not there is a contract of service between a minister of religion and his church was most recently authoritatively considered in Percy v Church of Scotland Board of National Mission [2005] UKHL 73[2006] AC 28. Mrs Percy was an ordained minister of the Church of Scotland and it was held that since the appointment offered to, and accepted by her entitled her, inter alia, to a salary, to reimbursement of her travelling expenses and to accommodation and other benefits in return for her performing the duties of an associate minister, the agreement between her and the Board displayed an intention to create legal relations between the parties enforceable in the event of breach and constituted a contract personally to execute work within the meaning of section 82(1) of the Sex Discrimination Act 1975. It should be noted, however, that “employment” is there defined to mean either “a contract of services … or a contract to perform any work or labour …”

Lord Nicholls of Birkenhead examined the earlier cases and said:

“7.

The existence of a contract of service between a minister of religion and his church is a question courts have considered on several occasions. In In Re National Insurance Act 1911: In Re Employment of Church of England Curates [1912] 2 Ch 563, 568, 569, Parker J held that a curate in the Church of England was not employed under a 'contract of service' within Part I (a) of the First Schedule to the National Insurance Act 1911: “the position of a curate is the position of a person who holds an ecclesiastical office, and not the position of a person whose rights and duties are defined by contract at all”. Thus Parker J contrasted the position of an office holder and a person whose functions are defined by contract.

8.

In Scottish Insurance Comrs v Church of Scotland (1914) SC 16 the Court of Session reached the same conclusion regarding assistants to ministers, not to be confused with associate ministers, of the Church of Scotland. Applying the “control” test used in identifying a contract of employment, an assistant to a minister was not subject to the control and direction of any particular master. An assistant holds an ecclesiastical office and performs his duties subject to the laws of the church: Lord Kinnear, at p 23. Lord Kinnear added that in any event there was difficulty in identifying exactly who was the assistant's employer. Lord Johnstone noted that employment must be under a contract of service. A contract of service assumes an employer and a servant. It assumes the power of appointment and dismissal in the employer, the right of control over the servant in the employer, and the duty of service to the employer in the servant. There was no one who occupied that position. The contract in which the assistant was engaged was more a contract for services than a contract of service: pp 26-27.

9.

The Court of Appeal decision in President of the Methodist Conference v Parfitt [1984] QB 368 concerned an unfair dismissal claim brought by a Methodist minister. The issue was whether the parties had entered into a contract of service. The court held that having regard to all the circumstances it was impossible to conclude that any contract, let alone a contract of service, came into being between a newly ordained minister and the Methodist Church when the minister was received into full connection.

10.

The same question arose for decision by your Lordships’ House in Davies v Presbyterian Church of Wales [1986] 1 WLR 323. The case concerned an unfair dismissal claim by a minister of the Presbyterian Church of Wales who had been inducted pastor of a united pastorate in Wales. Lord Templeman delivered the leading speech. He held that the claimant could not point to any contract between himself and the church. The book of rules did not contain terms of employment capable of being offered and accepted in the course of a religious ceremony.

11.

The same issue arose again in Diocese of Southwark v Coker [1998] ICR 140, this time in the context of an unfair dismissal claim by an assistant curate of the Church of England. Again the claimant failed. Mummery LJ analysed the reason underlying the absence of a contract between a church and a minister of religion in these cases as lack of intention to create a contractual relationship. He said, at p 147, that the special features surrounding the appointment and removal of a Church of England priest as an assistant curate, and surrounding the source and scope of his duties, preclude the creation of a contract “unless a clear intention to the contrary is expressed”. Mummery LJ noted that under the employment protection legislation the relevant right of an employee is not to be dismissed by his employer. He then considered and rejected one by one the possible candidates for the role of employer in that case. The Diocese of Southwark was not a legal person with whom a contract could be concluded. The Church Commissioners paid Dr Coker’s stipend and the Diocesan Board of Finance made the necessary arrangements for the payment. But neither of them appointed him, removed him or had power to control the performance of his services. It was not contended that either of Dr Coker’s vicars had a contract with him. That left only the bishop of the diocese. The bishop had legal responsibility for licensing the appointment of assistant curates and the termination of their appointments. But that relationship was “governed by the law of the established church, which is part of the public law of England, and not by a negotiated, contractual arrangement”: p. 148.”

To that list can be added Santokh Singh v Guru Nanak Gurdwara [1990] ICR 209 where the Court of Appeal upheld an industrial tribunal’s finding that a Granthi (priest) at a Sikh temple was not employed under a contract of service.

Percy was considered by this Court in The New Testament Church of God v Stewart [2007] EWCA Civ 1004. There the pastor was held to be employed by his church under a contract of service. His salary was paid by the national office and he was treated as an employee for income tax and national insurance purposes. Pill LJ considered paragraphs 23 and 24 of Lord Nicholls’ speech in Percy, where Lord Nicholls dealt with the question whether or not there was a presumption against the parties having an intention to create legal relations and he contrasted cases where “without more, the nature of the mutual obligations, their breadth and looseness, and the circumstances in which they were undertaken, point away from a legally-binding relationship” with arrangements “which on their face are to be expected to give rise to legally-binding obligations.” Pill LJ held:

“[35] Lord Nicholls’ reasoning at paragraph 23, is not that of overruling the earlier cases and Davies would not in any case be overruled unless expressly. What Percy does, however, establishes that the fact finding Tribunal is no longer required to approach its consideration of the nature of the relationship between a minister and his church with the presumption that there was no intention to create legal relations. The earlier cases, as explained, do not exclude that possibility; strong statements in Percy leave it open to employment tribunals to find, provided of course a careful and conscientious scrutiny of the evidence justifies such a finding, that there is an intention to create legal relations between a church and one of its ministers …”

Pill L.J. also went on to say:

“47.

The religious beliefs of a community may be such that their manifestation does not involve the creation of a relationship enforceable at law between members of the religious community and one of their number appointed to minister to the others, whether the appointment is by the local congregation or under an episcopal form of government. The law should not readily impose a legal relationship on members of a religious community which would be contrary to their religious beliefs. These beliefs and practices may be such, in the context of a particular church, that no intention to create legal relations is present. To take them into account does not involve any departure from ordinary contractual principles, especially in the light of Article 9 [of the European Convention on Human Rights].

48.

… The religious beliefs held in a church may throw light on the nature of the relationship between it and its ministers.”

Lord Nicholls’ speech in Percy was also illuminating for its discussion on “Office holders and employees”. He said:

“15.

The distinction between holding an office and being an employee is well established in English law. An important part of the background to this distinction is that in the past an employer could dismiss a servant without notice, leaving the servant with any claim he might have for damages for breach of contract. … By way of contrast, some office holders could be dismissed only for good cause. Thereby they were insulated against improper pressures. So the focus in master and servant cases was often on the question whether … there was an element of public employment or service, or anything in the nature of an office or status capable of protection: Malloch v Aberdeen Corporation [1971] 1 WLR 1578, 1595.

…

17.

… The distinction between holding an office and being an employee has long suffered from the major weakness that the concept of an “office” is of uncertain ambit. The criteria to be applied when distinguishing those who hold an office from those who do not are imprecise. In McMillan v Guest [1942] AC 561, 566, Lord Wright observed that the word “office” is of indefinite content. Lord Atkin suggested, at page 564, that “office” implies a subsisting, permanent, substantive position having an existence independent of the person who fills it, and which goes on and is filled in succession by successive holders. As Lord Atkin indicated, this is a generally sufficient statement of the meaning of the word. It is useful as a broad description of the ingredients normally present with any office.

18.

… Holding an office, even an ecclesiastical office, and the existence of a contract to provide services are not necessarily mutually exclusive.”

Although it is perhaps trite to say it, these cases appear to me to establish that the following approach should be followed:

Applying those principles to the facts in this case, I am completely satisfied that there is no contract of service in this case: indeed there is no contract at all. The appointment of Father Baldwin by Bishop Worlock was made without any intention to create any legal relationship between them. Pursuant to their religious beliefs, their relationship was governed by the canon law, not the civil law. The appointment to the office of parish priest was truly an appointment to an ecclesiastical office and no more. Father Baldwin was not the servant nor a true employee of his bishop.

Because there is no relationship of employer/employee between them, then, if one is judging the question on conventional lines, the bishop is not vicariously liable for the tortious acts of the priest. But now we get to the nub of this appeal. Can the bishop be vicariously liable if the relationship is akin to employment? Can the law be extended that far? To answer those questions, I must deal with the following topics raised in the course of the wide-ranging submissions advanced by counsel: (1) the important case in the Canadian Supreme Court John Doe v Bennett [2004] 1 SCR 436, [2004] SCC 17; (2) the only reasoned English case relevant at stage 1, Viasystems (Tyneside) v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151, [2006] QB 510; (3) the recent developments of the law at stage 2; (4) the policy considerations which inform the doctrine of vicarious liability; and, finally, drawing the threads together, (5) the search for principle.

The Canadian Supreme Court case of John Doe

The Canadian Supreme Court had considered the application of the doctrine of vicarious liability to the tort of sexually assaulting children in Bazley v Curry (1999) 174 (4^th) 45 and in Jacobi v Griffiths 174 DLR (4^th) 71, important cases on the developing law at our stage 2, the scope of employment. I shall deal with them later at [47]. In Doe McLachlin C.J. delivering the judgment of the court said at paragraph 20, the passage on which MacDuff J relied:

“In Bazley, the court suggested that the imposition of vicarious liability may usefully be approached in two steps. First, a court should determine whether there are precedents which unambiguously determine whether the case should attract vicarious liability. “If prior cases do not clearly suggest a solution, the next step is to determine whether vicarious liability should be imposed in light of the broader policy rationales behind strict liability”: Bazley, at para. 15 … Vicarious liability is based on the rationale that the person who puts a risky enterprise into the community may fairly be held responsible when those risks emerge and cause loss or injury to members of the public.  Effective compensation is a goal.  Deterrence is also a consideration.  The hope is that holding the employer or principal liable will encourage such persons to take steps to reduce the risk of harm in the future. Plaintiffs must show that the rationale behind the imposition of vicarious liability will be met on the facts in two respects. First, the relationship between the tortfeasor and the person against whom liability is sought must be sufficiently close. Second, the wrongful act must be sufficiently connected to the conduct authorised by the employer. This is necessary to ensure that the goals of fair and effective compensation and deterrence of future harm are met.”

At paragraph 27 she said:

“The relationship between the bishop and a priest in a diocese is not only spiritual, but temporal.  The priest takes a vow of obedience to the bishop.  The bishop exercises extensive control over the priest, including the power of assignment, the power to remove the priest from his post and the power to discipline him.  It is akin to an employment relationship. The incidents of control far exceed those characterising the relationship between foster parents and the government ... and the priest is reasonably perceived as an agent of the diocesan enterprise. The relationship between the bishop and the priest is sufficiently close. Applying the relevant test to the facts, it is also clear that the necessary connection between the employer-created or enhanced risk and the wrong complained of is established.” I have added the emphasis.

Over a period of almost two decades a Roman Catholic priest in Newfoundland sexually assaulted boys in his parishes. Two successive bishops and the archbishop failed to stop the abuse. The claimants, by then adults, sued the priest, the episcopal corporation of the diocese, the bishops and archbishop and even the Roman Catholic Church. The court treated the episcopal corporations as the secular arm of the bishop or archbishop for all purposes. The appeal centred on whether or not the corporation was vicariously liable for the priest’s assaults.

Lord Faulks points out that the facts of that case are very different from the facts before us. Indeed they are. This was a very isolated rural community where the priest:

“had enormous stature because of his position as parish priest, both to the boys and to their parents.  The plaintiffs perceived him as a “god” — quite logically given his centrality in the community and the disparity in lifestyles between himself and his parishioners.  As the school principal testified, “…people believed that the priest could turn you into a goat.”

Nevertheless, it is an authority from a powerful court which commands respect even if it is not binding upon us.

Viasystems (Tyneside) v Thermal Transfer (Northern) Ltd [2006] QB 510

This is the only recent English case to which our attention was drawn which has seen some development of the law of vicarious liability. The claimants engaged the first defendants to install air conditioning in their factory. The first defendants sub-contracted ducting work to the second defendants. The ducting work was being carried out by a fitter and his mate, supplied to the second defendants by the third defendants on a labour-only basis under the supervision of a fitter working for the second defendants, when the fitter’s mate negligently caused the fracture of the fire protection sprinkler system, resulting in severe flood damage to the factory. In the court below it was assumed that only one of the second or third defendants could in law be vicariously liable for the negligence of the fitter’s mate, not both. In the Court of Appeal counsel drew attention to the discussion in Atiyah Vicarious Liability in the Law of Torts (1967) in a chapter entitled “The Borrowed Servant” where it was suggested that both the general and the temporary employer could be vicariously liable for an employee’s negligence. That was the issue which engaged the Court of Appeal.

Dealing with the question of dual vicarious liability, May LJ said this:

“46.

In summary, therefore, there has been a long-standing assumption, technically unsupported by authority binding this court, that a finding of dual vicarious liability is not legally permissible. An assumption of such antiquity should not lightly be brushed aside, but the contrary has scarcely been argued and never considered in depth. This is not surprising, because in many, perhaps most, factual situations, a proper application of the Mersey Docks [Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947 AC 1] principles would not yield dual control, as it so plainly does in the present case. I am sceptical whether any of the cases from this jurisdiction which I have considered would, if they were re-examined, yield dual vicarious liability. …

48.

Academic commentary tends to favour the possibility of dual vicarious liability, but feels that authority constrains it. Other jurisdictions have reacted variously, giving no clear lead. Their decisions range from articulating the assumption to favouring or adopting dual liability.

49.

In my judgment, there is, in a modern context, little intrinsic sense in, or justification for, the assumption. …”

As for the test to apply, he held:

“16.

… To look for a transfer of a contract of employment is, in a case such as this, no more than a distracting device; in the present case a misleading one. [The fitter’s mate’s] employment was not transferred. The inquiry should concentrate on the relevant negligent act and then ask whose responsibility it was to prevent it. Who was entitled, and perhaps theoretically obliged, to give orders as to how the work should or should not be done? In my view, “entire and absolute control” is not, at least since the Mersey Docks case [Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Limited [1947] AC 1], a necessary precondition of vicarious liability.”

Rix LJ agreed but added his own gloss on the subject. He said:

“55.

The concept of vicarious liability does not depend on the employer's fault but on his role. Liability is imposed by a policy of the law upon an employer, even though he is not personally at fault, on the basis, generally speaking, that those who set in motion and profit from the activities of their employees should compensate those who are injured by such activities even when performed negligently. Liability is extended to the employer on the practical assumption that, inter alia, because he can spread the risk through pricing and insurance, he is better organised and able to bear that risk than the employee, even if the latter himself of course remains responsible; and at the same time the employer is encouraged to control that risk. For these purposes, issues have naturally arisen as to when the relationship of employer and employee, as distinct from that of employer and independent contractor, exists; or as to the doctrine of the course of employment, which seeks to set the scope and limits of the employer's liability. Over the years, the tests which have been adopted to answer these issues have developed in a way which has gradually given precedence to function over form.

…

77.

In my judgment, if consideration is given to the function and purposes of the doctrine of vicarious liability, then the possibility of dual responsibility provides a coherent solution to the problem of the borrowed employee. Both employers are using the employee for the purposes of their business. Both have a general responsibility to select their personnel with care and to encourage and control the careful execution of their employees’ duties, and both fall within the practical policy of the law which looks in general to the employer to organise his affairs in such a way as to make it fair, just and convenient for him to bear the risk of his employees’ negligence. I am here using the expression "employee" in the extended sense used in the authorities relating to the borrowed employee.

...

79.

However, I am a little sceptical that the doctrine of dual vicarious liability is to be wholly equated with the question of control. … Once, however, a doctrine of dual responsibility becomes possible, I am less clear that either the existence of sole right of control or the existence of something less than entire and absolute control necessarily either excludes or respectively invokes the doctrine. Even in the establishment of a formal employer/employee relationship, the right of control has not retained the critical significance it once did. I would prefer to say that I anticipate that subsequent cases may, in various factual circumstances, refine the circumstances in which dual vicarious liability may be imposed. I would hazard, however, the view that what one is looking for is 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. What has to be recalled is that the vicarious liability in question is one which involves no fault on the part of the employer. It is a doctrine designed for the sake of the claimant imposing a liability incurred without fault because the employer is treated by the law as picking up the burden of an organisational or business relationship which he has undertaken for his own benefit.”

As I read those judgments, two justifications for the extension of the employer/employee relationship are given: the first, per May L.J., who was entitled, and in theory, if they had the opportunity, obliged to control the workmen, and the second, per Rix L.J., was the employee in question so much part of the work, business or organisation of both employers that it was fair, just and convenient for both to bear the risk of the employee’s negligence.

Viasystems has, I have discovered, been considered by this court in Hawley v Luminar Leisure Ltd and ASE Security Services Ltd [2006] EWCA Civ 18. Luminar operated a nightclub in Southend. They contracted with ASE for the provision of security services and under that contract provided the supply of “door supervisors”, one of the doormen being Jeffrey Warren. He unlawfully assaulted the claimant, punching him so hard that he fell to the ground, fractured his skull and suffered permanent and serious brain damage. He alleged both Luminar and ASE were each responsible for Warren’s tortious and deliberate act. The trial judge, Wilkie J, who tried the claim before Viasystems had been decided in this Court, held that “the control that Luminar had over ASE’s employees was such as to make them temporary deemed employees of Luminar for the purposes of vicarious liability.” Giving the judgment of the Court, Hallett LJ, with contributions from Latham and Neuberger LJJ, held that was a decision he was fully entitled to reach and one with which the Court of Appeal should not interfere. The Court did however discuss Viasystems. They noted the different approaches taken by May and Rix LJJ but did not choose between them. Every case was fact specific and many factors might be relevant. The question of control may not be wholly determinative but remained at the heart of the test to be applied. “Whatever approach one adopts we are not persuaded that on the facts of this case it makes any difference.” There was no discussion about the correctness of accepting the possibility of dual responsibility: all the Court seems to have said is:

“86.

Thus, although the law now apparently entitles this court to make a finding of dual vicarious liability for the reasons given we decline to do so.”

Recent developments of the law at stage 2, the scope of employment

There have been a spate of recent cases where the courts have had to decide an employer’s liability for sexual abuse committed by school masters and priests. In all these cases an employment relationship, our stage 1, was conceded and the question was whether the innocent employer should be responsible for the criminal acts of his employee. The law is established by Lister v Hesley Hall Ltd [2001] UKHL 22, [2002] 1 AC 215. There the claimants were resident in a boarding house attached to a school owned and managed by the defendants. Without their knowledge, the warden of the boarding school employed by them systematically sexually abused the claimants. The Court of Appeal held that the warden’s acts could not be regarded as an unauthorised mode of carrying out his authorised duties. But that decision was reversed on appeal to the House of Lords. The ratio of the case is clear. Lord Steyn was of the opinion that the correct test was this:

“27.

My Lords, I have been greatly assisted by the luminous and illuminating judgments of the Canadian Supreme Court in Bazley v Curry 174 DLR (4th) 45 and Jacobi v Griffiths 174 DLR (4th) 71. Wherever such problems are considered in future in the common law these judgments will be the starting point. On the other hand, it is unnecessary to express views on the full range of policy considerations examined in those decisions.

28.

Employing the traditional methodology of English law, I am satisfied that in the case of the appeals under consideration the evidence showed that the employers entrusted the care of the children in Axeholme House to the warden. The question is whether the warden’s torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable. On the facts of the case the answer is yes.”

Lord Hutton agreed with Lord Steyn (see [52]). So did Lord Hobhouse of Woodborough (see [63]). Lord Clyde applied the same sort of test saying that:

“37.

… An act of deliberate wrongdoing may not sit easily as a wrongful mode of doing an authorised act. But recognition should be given to the critical element in the observation, namely the necessary connection between the act and the employment. … What has essentially to be considered is the connection, if any, between the act in question and the employment. If there is a connection, then the closeness of that connection has to be considered.”

So too Lord Millett:

“70.

… What is critical is that attention should be directed to the closeness of the connection between the employee's duties and his wrongdoing and not to verbal formulae. This is the principle on which the Supreme Court of Canada recently decided the important cases of Bazley v Curry … and Jacobi v Griffiths which provide many helpful insights into this branch of the law and from which I have derived much assistance.”

It is thus firmly established that the appropriate test is the closeness of the connection between the work the employee had been employed to do and the acts of abuse that he committed.

Lord Hobhouse, and even to some extent Lord Millett, added opinions which have given rise to some academic criticism. Lord Hobhouse said:

“55.

The classes of persons or institutions that are in this type of special relationship to another human being include schools, prisons, hospitals and even, in relation to their visitors, occupiers of land. They are liable if they themselves fail to perform the duty which they consequently owe. If they entrust the performance of that duty to an employee and that employee fails to perform the duty, they are still liable. The employee, because he has, through his obligations to his employers, adopted the same relationship towards and come under the same duties to the plaintiff, is also liable to the plaintiff for his own breach of duty. The liability of the employers is a vicarious liability because the actual breach of duty is that of the employee. The employee is a tortfeasor. The employers are liable for the employee’s tortious act or omission because it is to him that the employers have entrusted the performance of their duty. The employers’ liability to the plaintiff is also that of a tortfeasor. I use the word “entrusted” in preference to the word “delegated” which is commonly, but perhaps less accurately, used. Vicarious liability is sometimes described as a “strict” liability. The use of this term is misleading unless it is used just to explain that there has been no actual fault on the part of the employers. The liability of the employers derives from their voluntary assumption of the relationship towards the plaintiff and the duties that arise from that relationship and their choosing to entrust the performance of those duties to their servant. Where these conditions are satisfied, the motive of the employee and the fact that he is doing something expressly forbidden and is serving only his own ends does not negative the vicarious liability for his breach of the “delegated” duty.”

Lord Millett said:

“82.

In the present case the warden's duties provided him with the opportunity to commit indecent assaults on the boys for his own sexual gratification, but that in itself is not enough to make the school liable. The same would be true of the groundsman or the school porter. But there was far more to it than that. The school was responsible for the care and welfare of the boys. It entrusted that responsibility to the warden. He was employed to discharge the school's responsibility to the boys. For this purpose the school entrusted them to his care. He did not merely take advantage of the opportunity which employment at a residential school gave him. He abused the special position in which the school had placed him to enable it to discharge its own responsibilities, with the result that the assaults were committed by the very employee to whom the school had entrusted the care of the boys.”

The criticism is that the court did not take the opportunity to settle the guidelines between vicarious liability and personal liability, whether in negligence or for breach of non-delegable duties. For example in Tony Weir’s 2002 edition of Tort Law, at p. 103 he writes: “The distinct analyses [vicarious liability and non-delegable duty] were not kept properly apart.” McBride and Bagshaw, Tort Law 2nd edition, 2003 argue at p. 652:

“[Their Lordships] could easily have found the defendants in Lister were personally liable to compensate the claimants for the harm they suffered as a result of being sexually abused by Grain. Their Lordships could easily have reached this conclusion using the device of a non-delegable duty of care. They could have ruled that “the defendants owed the claimants a non-delegable duty of care to look after them; the defendants gave Grain the job of looking after the claimants; and Grain put the defendants in breach of the non-delegable duty of care that they owed the claimants when, by sexually abusing the claimants, he failed to look after the claimants properly. It is hard to understand why the House of Lords did not decide Lister in this way – particularly as these were the very reasons why the House of Lords found there was a “sufficiently close connection” between the torts committed by Grain in the Lister case and what he was employed to do so as to make the defendants vicariously liable in respect of those torts.”

I note that in the High Court of Australia in New South Wales v Lepore 195 ALR 412 Gummow and Hayne JJ say at para 208, “The analyses of Lord Hobhouse and Lord Millett have strong echoes of non-delegable duties.” Gaudron J explained the Australian view at paras 123-125 as follows:

“Ordinarily, if there is a material increase in a risk associated with an enterprise involving the care of children that is a foreseeable risk and, thus, it is the personal … duty of those who run that enterprise to take reasonable care to prevent that risk eventuating. …

And if abuse occurs in circumstances in which an employee has seized an opportunity which could have been obviated by the use of reasonable care, the employer should be held directly liable.

A residential institution or authority that does not take reasonable steps to institute a system such that its employees do not come into personal contact with a child or other vulnerable person unless supervised or accompanied by another adult should be held directly liable in negligence if abuse occurs in a situation in which there is neither supervision nor an accompanying adult. Further, it seems almost certain that, on that basis, there would be no different result in factually similar cases from those arrived at in Bazley and Lister. So, too, on that basis, it would be a breach of a personal … duty of care resulting in direct liability to allow an employee to share a bedroom with a child entrusted to his care, as was the case in Trotman [v North Yorkshire CC [1999] LGR 584, CA].”

I cannot but wonder whether May LJ’s test of asking in Viasystems who was entitled and perhaps theoretically obliged to give orders as to how the work should or should not be done, does not also engage questions of personal or non-delegable duty. According to Markesinis and Deakin’s Tort Law, 6th ed., p.700, Lord Hobhouse’s formulation is “certainly unorthodox” but, they add,

“there is much to be said for an analysis here which focuses on the defendant’s overall responsibility for the care of the claimant.”

These are all challenging observations beyond the scope of this judgment on this particular preliminary issue and we must await future developments. The bishop would undoubtedly be concerned to hear of a priest in his parish abusing little girls and may well have a duty to intervene and remove the priest from his parish to protect the victim but whether this concern for his parishioners, or even a general duty to be concerned about their welfare, can be transformed into a legal duty to take care when he has no reason to suspect harm is being or about to be suffered must remain a question for another day.

Be that as it may Lister is binding as to the test for stage 2 and has been applied in a number of cases: see for example Maga v Archbishop of Birmingham [2010] EWCA Civ 256, [2010] 1 WLR 1441 (sexual abuse by a priest) and Various Claimants v The Catholic Child Welfare Society and the Institute of Brothers of the Christian Schools & ors (sexual abuse by the brothers of the De La Salle Institute). There Hughes LJ, with a hint of the views of Rix LJ in Viasystems and Lord Hobhouse in Lister, said:

“57.

Nor do I think that vicarious liability on the part of the Institute can be derived on the basis that brother-teachers were carrying out its purposes and acting in the capacity of members of it. True, no doubt, that teaching was the mission of the Institute, and that the brothers were therefore, when teaching at St William’s or anywhere else, furthering that mission, having been sent there for that purpose. True, clearly, that they were identifiably present clothed with the status of members of the Institute and subject to its discipline. It does not, however, follow, that the Institute was engaged in the business of running the teaching at St William’s. Applying the first stage of the test proposed by Lister, the Institute had not undertaken a duty of caring for the pupils at St William’s and then delegated or entrusted it to the brother-teachers. Those brothers who taught at St William’s were not doing so on behalf of the other members of the Institute.”

For completeness I must refer to the Canadian authorities Bazley and Jacobi which on the same day established the close connection test though the court reached different conclusions when applied to the facts of the two cases. In Bazley the Children’s Foundation, a non-profit organisation, operated residential care facilities for the treatment of emotionally troubled children. The Foundation authorised its employees to act as parent figures for the children. Unfortunately the Foundation hired a paedophile who sexually abused one of the children in the home. The court saw its task as endeavouring to articulate a rule consistent with both the existing authority and the policy reasons for vicarious liability. The common theme in the existing authorities resided in the idea that where the employee’s conduct was closely tied to a risk that the employer’s enterprise had placed in the community, the employer would be justly held vicariously liable for the employee’s wrong. But the court devoted itself extensively to the policy considerations, holding that vicarious liability has always been concerned with policy. As Fleming The Law of Torts 9th edition, 1998 puts it at p. 410, “[V]icarious liability cannot parade as a deduction from legalistic premises, but should be frankly recognised as having its place in a combination of policy considerations.” Giving the judgment of the court McLachlin J found that the concern of the law was first and foremost to provide a just and practical remedy to people who suffer as a consequence of wrongs perpetrated by an employee. That, coupled with deterrence of future harm, usefully embraced the main policy considerations that had been advanced. “The idea that the person who introduces a risk incurs a duty to those who may be injured lies at the heart of tort law”: [30]. Fairness demanded that the employment enterprise employing others to advance its own economic interest should bear the burden of providing a just and practical remedy for wrongs perpetrated by their employees. That is fair to the injured person. It is also fair to the employer because it is right and just that the person who creates the risk should bear the loss when the risk ripens into harm. So the court concluded:

“[37] Underlying the cases holding employers vicariously liable for the unauthorised acts of employees is the idea that employers may justly be held liable where the act falls within the ambit of the risk that the employer’s enterprise creates or exacerbates. Similarly, the policy purposes underlying the imposition of vicarious liability on employers are served only where the wrong is so connected with the employment that it can be said that the employer has introduced the risk of the wrong (and is thereby fairly and usefully charged with its management and minimisation).  The question in each case is whether there is a connection or nexus between the employment enterprise and that wrong that justifies imposition of vicarious liability on the employer for the wrong, in terms of fair allocation of the consequences of the risk and/or deterrence.

…

[42] Applying these general considerations to sexual abuse by employees, 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. …”

Although this case has received high praise (see Lord Steyn at [27] of Lister cited at [43] above), it has not escaped its share of understandable criticism. Fridman, “The Course of Employment: Policy or Principle?” (2002) 6 Newcastle Rev. 61 at 66 suggests that the approach of the Supreme Court represented “the triumph of policy over principle”. In Lister Lord Steyn himself guardedly thought it “unnecessary to express views on the full range of the policy considerations” that dominated the Canadian cases. Lord Hobhouse was more forthright:

“60.

… The judgments contain a useful and impressive discussion of the social and economic reasons for having a principle of vicarious liability as part of the law of tort which extends to embrace acts of child abuse. But an exposition of the policy reasons for a rule (or even a description) is not the same as defining the criteria for its application. Legal rules have to have a greater degree of clarity and definition than is provided by simply explaining the reasons for the existence of the rule and the social need for it, instructive though that may be.”

So much for the recent developments at stage 2, the scope of the employment. Whatever its flaws, the rule remains that there must be a close connection between the employment and the tortious act. Whether this stage 2 test is of any relevance or help in ascertaining whether the case comes within stage 1 is a matter to which I must return.

The policy considerations which inform the doctrine of vicarious liability

The doctrine of vicarious liability does give rise to a clash of two broad policies upon which the law of torts is founded, one that there ought to be an effective remedy for the victim of another’s wrongful act, and the other that the defendant should not generally be held liable unless he was at fault. Only policy considerations can explain the triumph of the former over the latter. Identifying the relevant strands of policy and evaluating their importance is not straightforward.

Longmore LJ observed in Maga at [81]:

“Since this case is not covered by previous authority, it may be necessary to have in mind the policy behind the imposition of vicarious liability. That is difficult because there is by no means universal agreement as to what that policy is. Is it that the law should impose liability on someone who can pay rather than someone who cannot? Or is it to encourage employers to be even more vigilant than they would be pursuant to a duty of care? Or is it just a weapon of distributive justice? Academic writers disagree and the House of Lords in Lister’s case did not give any definitive guidance to lower courts.”

There is of course much instructive academic debate about the subject but it is, unfortunately, not possible fully to deal with it in this judgement. In A Theory of Vicarious Liability 2005 Alberta L.R. 1 referred to above J.W. Neyers conducts a perceptive analysis of the main rationales and examines the failures of the leading theories of control, compensation, deterrence, loss spreading and enterprise liability adequately to explain the doctrine of vicarious liability and its limits. It may be useful to summarise some of the main themes.

It seems, therefore, that no single rationale provides a complete answer for the imposition of vicarious liability. I have to agree with the view expressed by, among others, Fleming in Law of Torts, 10th edition (2011) p. 438 that: “… the modern doctrine of vicarious liability should be frankly recognised as having its basis in a combination of policy considerations.” If, as I accept, the court cannot ignore the role played by policy in shaping the decision at hand, the question still remains: what should the role of policy be?

The courts do not speak with one voice. At one extreme McLachlin J in Bazley believes:

“[27] A focus on policy is not to diminish the importance of legal principle.  It is vital that the courts attempt to articulate general legal principles to lend certainty to the law and guide future applications.  However, in areas of jurisprudence where changes have been occurring in response to policy considerations, the best route to enduring principle may well lie through policy.  The law of vicarious liability is just such a domain.”

At the other extreme is Lord Hobhouse of Woodborough whose view is expressed at [60] in Lister:

“I do not believe that it is appropriate to follow the lead given by the Supreme Court of Canada in Bazley … The judgments contain a useful and impressive discussion of the social and economic reasons for having a principle of vicarious liability as part of the law of tort which extends to embrace acts of child abuse. But an exposition of the policy reasons for a rule (or even a description) is not the same as defining the criteria for its application. Legal rules have to have a greater degree of clarity and definition than is provided by simply explaining the reasons for the existence of the rule and the social need for it, instructive though that may be.”

My own view is that one cannot understand how the law relating to vicarious liability has developed nor how, if at all, it should develop without being aware of the various strands of policy which have informed that development. On the other hand, a coherent development of the law should proceed incrementally in a principled way, not as an expedient reaction to the problem confronting the court. So I must see whether it is possible to articulate general legal principles which will allow the court to decide whether the bishop may be vicariously liable for the alleged torts of Father Baldwin.

The search for principle

Many seem to doubt that one can find a rule which covers every situation. In Kilboy v South Eastern Fire Area Joint Committee 1952 SC 280, 285, the Lord President (Cooper) said of the rule respondeat superior “What was once presented as a legal principle has degenerated into a rule of expediency, imperfectly defined, and changing its shape before our eyes under the impact of changing social and political conditions.” For Lord Pearce, “The doctrine of vicarious liability has not grown from any very clear, logical or legal principle but from social convenience and rough justice”: Imperial Chemical Industries v Shatwell [1965] AC 656, 685. Professor Glanville Williams’ rather scathing view in Vicarious Liability and the Master’s Indemnity, 1957 MLR 220, 231 was:

“Vicarious liability is the creation of many judges who have different ideas of its justification or social policy, or no idea at all. Some judges may have extended the rule more widely or confined it more narrowly than its true rationale would allow; yet the rationale, if we can discover it, will remain valid so far as it extends.”

I am relieved he is not marking this essay.

The search for principle to explain the development of the law must nevertheless go on. The answer should not be a mere expedient reaction to the particular problem confronting the court at the time; the outcome must serve as the desired solution for the matter in dispute but it must not also generate inappropriate outcomes in other situations. As Phillip Morgan points out in the article he sent us, Revising Vicarious Liability – a Commercial Perspective 2011 Lloyds Maritime and Commercial Law Quarterly 175, “In the field of vicarious liability, where cases concerning abuse litigation have led, cases involving commercial concerns have followed”, citing Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48, [2003] AC 366 where Lister was applied in a case of commercial fraud.

The academic writers have accordingly set us a daunting task. I would have wished to have had more time for research and reflection but these are luxuries we do not enjoy. Let me start with MacDuff J’s judgment and his adoption of the approach of the Canadian Supreme Court in Doe. Is the principled approach of universal application to ask whether the connection between the tortfeasor and the defendant is sufficiently close in its nature and purpose to amount to a relationship akin to employment and thus render it just and fair to make the defendant vicariously liable for the actions which he initiated by appointing the priest to his parish? That approach requires one to look for (1) a relationship akin to employment; (2) which is established by a connection between D (defendant) and A (actor) which is sufficiently close so that (3) it is fair and just to impose liability on D. That gives rise to these questions: (1) given the unchallenged finding that there is no relationship of employer/employee in this case, can the law be extended to relationships “akin to employment”? (2) Is the close connection test appropriate and (3) is it enough that the result is just and fair?

This question is closely linked to a matter which has excited and divided academic opinion: can one be an employee for one purpose (e.g. in employment law for unfair dismissal or for PAYE income tax) but not for another, namely vicarious liability and the law of tort? The traditional view that the question “who is a servant?” should receive the same answer regardless of the context in which the question is asked is exemplified by Atiyah, Vicarious Liability and the Law of Tort p. 32/33. The more modern view to the contrary, held, for example, by Ewan McKendrick, Tort Textbook 5th ed., 18, derives from the increase in atypical forms of employment. McKendrick poses the problem in his article Vicarious Liability and Independent Contractors – A Re-examination (1990) 53 MLR 777:

“The Labour market in Britain is presently undergoing significant structural change. The principal change is a rapid increase in new, flexible forms and patterns of work which depart radically from the standard employment relationship whereby an employee works regularly (that is, full-time) and consistently for his employer under a contract of employment. This new flexible, ‘atypical’ workforce consists largely of the self-employed, part-time workers, casual workers, ‘temps,’ homeworkers and those working on government training schemes. The rise of this workforce has been well documented by labour lawyers but so far it has largely escaped the attention of tort lawyers. Yet the emergence of a large ‘atypical’ workforce is an event of great importance for the law of tort.

The primary significance for tort lawyers lies in the fact that, owing to the flexibility, lack of continuity and irregularity of their work, many atypical workers are either unable or have great difficulty in establishing that they are employees employed under a contract of employment. If they are not employees then, presumably, they are outside the scope of the doctrine of vicarious liability. And if they are independent contractors then, as Lord Bridge recently stated, it is:

trite law that the employer of an independent contractor is, in general, not liable for the negligence or other torts committed by the contractor in the course of the execution of the work.

Yet will the courts actually hold that these atypical workers are independent contractors for whose torts the employer is not liable? If they do, will that not undermine the social purposes, such as loss distribution, which have hitherto been furthered by the doctrine of vicarious liability? On the other hand, if the courts are to conclude that employers are liable for the torts of such workers how can they achieve this goal? Can the doctrine of vicarious liability be adapted in order to encompass this new workforce or will the courts have to create new forms of primary liability?”

In my judgment the time has come to recognise that the context in which the question arises cannot be ignored. If the case is one where an employee seeks a remedy against his employer, for example for unfair dismissal, then the case does require that the true relationship of employer/employee be established in order to found the claim. It is after all a claim based on that relationship. Likewise liability for income tax ultimately depends upon the proper construction of the specific provisions in the relevant tax legislation. The statutory definition will demand a true relationship of employer/employee. If the case is brought under the sex discrimination legislation, then a different test applies: see Percy. On the other hand the remedy of an innocent victim against the employer of the wrongdoer has a different justification rooted, as we have seen, in public policy. The fluid concept of vicarious liability should not, therefore, be confined by the concrete demands of statutory construction arising in a wholly different context.

I have not overlooked Lord Steyn’s observation in the Privy Council in Bernard v The Attorney General of Jamaica [2004] UKPC 47 at [23]:

“ … the Board is firmly of the view that the policy on which vicarious liability is founded is not a vague notion of justice between man and man. It has clear limits. This perspective was well expressed in Bazley v Curry … The principle of vicarious liability is not infinitely extendable.”

On the other hand, it is not a static concept and has adjusted over the centuries to provide just solutions to the challenges of changing times. And times are still a-changing as McKendrick’s article demonstrates. We need to adapt to the current demands. Viasystems has gone a long way to acknowledge that, for the purposes of establishing vicarious liability, the tortfeasor does not have to be an old-fashioned employee. It will be recalled that the issue there was whether “employers” could be held vicariously liable for the torts of an “employee” bound in contract to one of them but “loaned” by him to the other for the purpose of carrying out a particular piece of work. The actual contract of employment was treated as no more than an irrelevant distraction. Function triumphed over form. Despite the tortfeasor not being an employee of the second defendant, the second defendant was vicariously liable for his negligence. For Street on Torts 12^th ed. p. 592, this was “a radical step” and he fears what will happen “in the wrong hands.” In my hands I am prepared to say that, even if the court did not address the exact question we have to resolve – is a relationship akin to employment enough? – this decision of the Court of Appeal, accepted as it has been in Hawley v Luminar, has extended the conventional boundaries and will, I believe, come to be seen as something of a William Ellis moment where, perhaps unwittingly, their Lordships picked up the ball and ran with it thereby creating a whole new ballgame – vicarious liability even if there is strictly no employer/employee relationship. This appeal now presents us with the problem of laying down the rules for this novel game – vicarious liability in cases akin to employment.

With all due respect to the Canadian Supreme Court I simply do not understand how their review of precedent and/or broader policy rationales led to the conclusion that “the relationship between the tortfeasor and the person against whom liability is sought must be sufficiently close.” If anything precedent is against that conclusion. Parent and child could not be closer yet the parent has never been vicariously liable for the tort of the child simply by reason of being a parent. Husband and wife may be thought to be closely connected but the ancient rule that the husband was always vicariously liable for his wife’s tort was abolished long ago. A wife is not vicariously liable for her husband’s (or his agent’s) use of the family car owned by the wife where the use was entirely for his purposes and not for hers: Launchbury v Morgans [1973] AC 127. The close connection test (the sufficient connection between the work that the employee had been employed to do and the acts of abuse that he committed) is established for stage 2 purposes (Lister et al) but even if liability depends on a synthesis of stage 1 and stage 2 (Various Claimants per Hughes LJ) I do not see why the close connection test for stage 2 purposes has to be transposed to stage 1 which is analysing the nature of the relationship. The employer may have as close a connection with his regularly used independent contractor as he has with an employee who is but an anonymous member of his workforce. I do not find closeness of that connection to be of any great assistance.

If there is a close connection test, it is that the relationship between the defendant and the tortfeasor should be so close to a relationship of employer/employee that, for vicarious liability purposes, it can fairly be said to be akin to employment. One may at least ask the very broad question whether the tortfeasor bears a sufficiently close resemblance and affinity in character to a true employee that justice and fairness to both victim and defendant drive the court to extend vicarious liability to cover his wrongdoing. For this purpose one is looking to identify the broad characteristics of the employer/employee relationship.

If it is necessary to see how close in character the tortfeasor is to being an employee of the defendant, it is necessary at least to bear in mind the characteristics and hallmarks of a true employee.

I indicated early on at [21] that vicarious liability tended to depend on the difference between employee and independent contractor. If, as I believe, it is necessary to attempt to capture the essence of what it is that makes a man an employee, I must examine those differences in more detail. Generally speaking, an employee works under the supervision and direction of his employer: an independent contractor is his own master bound by his contract but not by his employer’s orders. An employee works for his employer: an independent contractor is in business on his own account. In Ready Mix Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 (a case which I observe with envy occupied the court for six days whilst we were allowed one only), McKenna J said at p. 515 that a contract of service exists if these three conditions are fulfilled:

“(i)

The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master; (ii) he agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master; (iii) the other provisions of the contract are consistent with its being a contract of service.”

He elaborated:

“Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant.”

Later at p. 524 he commented on Lord Thankerton’s “four indicia” of a contract of service said in Short v J. and W. Henderson Ltd (1946) 62 TLR 427, 429 to be:

“(a)

The master's power of selection of his servant; (b) the payment of wages or other remuneration; (c) the master's right to control the method of doing the work; and (d) the master's right of suspension or dismissal.”

McKenna J said:

“It seems to me that (a) and (d) are chiefly relevant in determining whether there is a contract of any kind between the supposed master and servant, and that they are of little use in determining whether the contract is one of service. The same is true of (b) unless one distinguishes between different methods of payment, payment by results tending to prove independence and payment by time the relation of master and servant.”

That leaves control as an important distinguishing factor. The example is often given of the difference between the chauffeur and the taxi driver but it is not always as easy as that. As times have changed so control has become an unrealistic guide. It may have been more meaningful when work was done by labourers under the direction of employers who had the same or greater technical skills than their workmen. Now that one is frequently dealing with a professional person or a person of some particular skill and experience, for example a brain surgeon, there can be no question of the employer telling him how to do his work for in truth the skilled person is engaged for the very reason that he possesses skills which the employer lacks. The emphasis placed on control has thus been reduced. As Roskill J said in Argent v Minister of Social Security [1968] 1 WLR 1749, 1758-9:

“… in the earlier cases it seems to have been suggested that the most important test, if not the all-important test, was the extent of the control exercised by the employer over the servant. If one goes back to some of the cases in the first decade of this century, one sees that that was regarded almost as the conclusive test. But it is also clear that as one watches the development of the law in the first sixty years of this century and particularly the development of the law in the last fifteen or twenty years in this field, the emphasis has shifted and no longer rests so strongly upon the question of control. Control is obviously an important factor. In some cases it may still be the decisive factor, but it wrong to say that in every case it is the decisive factor. It is now, as I venture to think, no more than a factor albeit a very important one.”

Roskill J’s test was this at p. 1760:

“Finally it has been more recently suggested that the matter can be determined by reference to what in modern parlance was called economic reality. All these are matters which have to be borne in mind. To my mind, no single one is decisive. One has to look at the totality of the evidence, at the totality of the facts found and then apply them to the language of the statute. One cannot do better than echo the words of Somerville LJ in Cassidy v Ministry of Health [1951] 2 KB 343, 352:

“one perhaps cannot get much beyond this: ‘was his contract a contract of service within the meaning which an ordinary person would give to the words?’”

Roskill J also referred to Denning LJ’s views expressed in Stevenson Jordan & Harrison Ltd v MacDonald & Evans [1952] 1 TLR 101, 111 and Bank voor Handel en Scheepvaart NV v Slatford [1953] 1 QB 248, 295. In the former Denning LJ said:

“I find that the contract between the two parties was more consistent with a contract for service than a contract of service. From the totality of the evidence, Mr Evans-Hemming was not employed as part of the business of the plaintiffs but rather as a contract for service and his work, although done for the business, is not integrated into it but is only accessory to it.”

In the latter he said:

“… the test of being a servant does not rest nowadays on submission to orders. It depends on whether the person is part and parcel of the organisation.”

Those passages have been criticised, for example by Professor Atiyah and by the Privy Council in Lee Tin Sang v Chung Chi-Keung [1990] 2 AC 374. Nonetheless there are echoes of that test in the judgment of Rix L.J. in Viasystems.

The Privy Council in Lee Tin Sang did, however, give this help at p. 382:

“What then is the standard to apply? This has proved to be a most elusive question and despite a plethora of authorities the courts have not been able to devise a single test that will conclusively point to the distinction in all cases.

Their Lordships agree with the Court of Appeal when they said that the matter had never been better put than by Cooke J. in Market Investigations Ltd v Minister of Social Security [1969] 2 Q.B. 173, 184-185:

“The fundamental test to be applied is this: ‘is the person who has engaged himself to perform these services performing them as a person in business on his own account?’

If the answer to that question is ‘yes’, then the contract is a contract for services. If the answer is ‘no’, then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.”

To much the same effect is an earlier Privy Council case, Montreal v Montreal Locomotive Works Ltd [1947] 1 DLR 161 where Lord Wright said:

“In earlier cases a single test, such as the presence or absence of control, was often relied on to determine whether the case was one of master and servant, mostly in order to decide issues of tortious liability on the part of the master or superior. In the more complex conditions of modern industry, more complicated tests have to be applied. It has been suggested that a four-fold test would in some cases be more appropriate, a complex involving (1) control; (2) ownership of tools; (3) chance of profit; (4) risk of loss. Control is not always in itself conclusive.”

He went on to say that

“it is in some cases possible to decide the issue by raising as the crucial question whose business is it, or in other words by asking whether the party is carrying on the business, in the sense of carrying it on for himself or on his own behalf and not merely for a superior.”

There being no single test, what one has to do is marshal various tests which should cumulatively point either towards an employer/employee relationship or away from one. Adopting that approach confirms that which is accepted as the common ground, namely, that Father Baldwin is not a true employee. The test may yet be useful to see whether he can be said to be an independent contractor, for if he is, the law is clear: the employer is not vicariously liable for the torts of his independent contractor. I am satisfied that Father Baldwin is no more a true independent contractor than he is an employee. For a start, he has no contractual relationship with his bishop. He is hardly a person in business on his own account with a free hand to carry out the job, if it is a job, as and when he wishes.

Whilst it may be useful to carry out some sort of comparative exercise for the purpose of ascertaining how close the relationship of Father Baldwin and the bishop is to a relationship of employer/employee as opposed to that of employer/ independent contractor, my judgment is that one should concentrate on the extent to which, if at all, he is in a position akin to employment. The cases analysed in the immediately preceding paragraphs should be noted with a view to abstracting from them, if it is possible, the essence of being an employee. To distil it to a single sentence I would say that an employee is one who is paid a wage or salary to work under some, if only slight, control of his employer in his employer’s business for his employer’s business. The independent contractor works in and for his own business at his risk of profit or loss.

Whilst it is useful as part of an overall exercise to use the traditional distinctions between employer and employee to see whether vicarious liability may fairly and properly be extended to this particular relationship, it is also necessary to include a consideration of the policy factors which enable a judgment to be made as to the justice - or injustice - of extending liability.

I have found Professor Richard Kidner’s article Vicarious Liability: for whom should the ‘employer’ be liable? (1995) 15 LS 47 to be most illuminating and helpful. He suggests that the following in some mix or other are appropriate signposts which may point to vicarious liability:

“(1)

Control by the ‘employer’ of the ‘employee’. Traditionally this has meant asking whether the employer can control not only what is done but also how it is done. This makes little sense and the variant of asking whether the employer has the legal right to control is merely circular. Rather this factor should look at the degree of managerial control which is exercised over the activity and this may depend on how far a person is integrated into the organisation of the enterprise. At the one end of the spectrum a contractor will merely be asked to achieve an end result, or more ambiguously the specification of that end result may be so detailed as to amount to detailed control over how that result is to be achieved. At the other end of the spectrum, it is the person who is actually controlled in every detail of how things are to be done. Another way to look at the control test is to examine the degree to which the ‘employee’ is accountable to the employer; in other words to what extent is he subject to the managerial procedures of the employer in relation to such matters as quality of work, performance, productivity etc?

(2)

Control by the contractor of himself. This is not about Mr Newall who took no orders from anybody [the Mersey Docks case] but is rather an element of the entrepreneur test and involves looking at how the contractor arranges his work, his use of assets, his payment etc.

(3)

The organisation test (in the first sense of how central the activity is to the enterprise): This involves the question, how far the activity is a central part of the employer’s business from the point of view of the objectives of that business. This element flows from the need to establish who it is that is engaging in the activity and the more relevant the activity is to the fundamental objectives of the business the more appropriate it is to apply the risk to that business.

(4)

The integration test (i.e. the organisation test in the second sense of whether the activity is integrated into the organisational structure of the enterprise). This also looks at the traditional test of whether the function is being provided for the business or by the business and is also a part of the entrepreneur test for it asks whether the activity is part of the enterprise’s organisation or of some other organisation. A service may be absolutely essential to the business or wholly peripheral to it, but if it is being provided by what is in effect a separate business it would be appropriate to apply the risk to the enterprise. It is a factor of both who is engaging in the activity and also who stands to gain or lose from it.

(5)

Is the person in business on his own account (the entrepreneur test)? This is not really a separate test as it is intimately involved in the other four, but it needs to be highlighted so that the burden of proof is right. For the purpose of vicarious liability a person should not be regarded as an independent contractor simply because according to the technical requirements of employment law he is not an employee. Rather it needs to be established that he is actually behaving as an entrepreneur and is taking the appropriate risks and has the possibility of resulting profits. Thus even if a person’s activity is peripheral to the enterprise and even if he is not for managerial purposes regarded as part of the organisation, a person could still be regarded as an ‘employee’ if it is clear that in relation to that business he is not acting as an entrepreneur. Agency workers would be an example.”

I confess I have found this difficult to decide. I see the force of the arguments both ways. I can conclude that the time has come emphatically to announce that the law of vicarious liability has moved beyond the confines of a contract of service. The test I set myself is whether the relationship of the bishop and Father Baldwin is so close in character to one of employer/employee that it is just and fair to hold the employer vicariously liable.

Looking first at the control test, the priest is appointed to his office subject to the oversight of the bishop, and of any diocesan laws and regulations but in other respects, responsibility for running the parish rests with the parish priest. The priest exercises his ministry in co-operation and collaboration with his bishop rather than as one who is subject to the bishop’s control as would be the case in an ordinary employment relationship. Nevertheless, as Dr Costigane said (see [9] above):

“There is no direct control in the sense of the bishop checking what a priest does every single day, but there is a level of control in the sense that if certain things don’t happen then action could be taken …”

Moreover, as prescribed by the canon law, and as acknowledged by Monsignor Read, presbyters (priests) are bound by special obligation to show reverence and obedience to their own ordinary, with the emphasis added by me. Monsignor Read said in his cross-examination (see [11] above):

“… he (the bishop) would not give detailed instructions as how they were to exercise the role of parish priest to them as individuals but rather issue norms through the Ad Clerum to the clergy as a whole, as particular policy or things of that kind. If it came to the bishop’s attention that a priest was in breach of ecclesiastical law, he would have the right and duty to take action.”

Abusing a little girl is a most gross breach of ecclesiastical law and if it came to the bishop’s knowledge, he would be bound to dismiss the priest from his office as parish priest even if he could not deprive him of the sacrament of holy orders. Here May LJ’s test in Viasystems quoted at [38] above comes into play. He asked:

“Who was entitled, and perhaps theoretically obliged, to give orders as to how the work should or should not be done?”

Although it might never have crossed his mind to contemplate the unthinkable, I do not doubt that Bishop Worlock could have told Father Baldwin, “Go out and care for the souls of your parishioners but on no account are you ever to sexually abuse any one of them”.

Although the priest decides for himself how he runs his parish he operates within a pre-existing framework of rights and obligations set out in the Code of Canon Law as all such matters as duties, financial support and time away from the parish are left to the general provisions of Canon Law. Nevertheless he is ultimately subject to the sanctions and control of his bishop. The bishop does not control each and every facet of how the priest is to carry out his duties day by day for, as Monsignor Read explained in his written report,

“His [the bishop’s] role is not one of giving directions as to how that office is to be carried out. Those requirements are set out in the universal and particular canon law applying to the office concerned.”

Nevertheless residual control still vests in the bishop. Ultimately there is little difference between the bishop’s control over the priest and the health trust’s control over the surgeon: neither is told how to do the job but both can be told how not to do it.

In my judgment the question of control should be viewed in a wider sense than merely enquiring whether the employer has the legal power to control how the employee carries out his work. It should be viewed more in terms of whether the employee is accountable to his superior for the way he does the work so as to enable the employer to supervise and effect improvements in performance and eliminate risks of harm to others (the notions relied upon by McLachlin CJ in Bazley (see [47] above). In this sense the priest is accountable to his bishop.

As for the organisation test, the problem here is to identify the employer’s – the bishop’s – business. Or is it really the bishop’s business? In reality it is not. The Roman Catholic Church may not be a legal persona but it does exist. It is highly organised. As Canon 369 of the current 1983 Code of Canon Law describes it, “

“A diocese is a portion of the people of God, which is entrusted to a bishop to be nurtured by him, with the co-operation of the presbyterium, in such a way that, remaining close to its pastor and gathered by him through the Gospel and the Eucharist in the Holy Spirit, it constitutes a particular Church. In this Church, the one, holy, Catholic and Apostolic Church of Christ truly exists and functions.”

Translating that into secular language, there is an organisation called the Roman Catholic Church with the Pope in the head office, with its “regional offices” with their appointed bishops and with “local branches”, the parishes with their appointed priests. This looks like a business and operates like a business. Its objective is to spread the word of God. The priest has a central role in meeting that target. Ministering, as he does, to the souls of the faithful, can be seen to be the very life blood of the Church, vital to its existence. “The more relevant the activity is to the fundamental objectives of the business, the more appropriate it is to apply the risk to the business”, says Kidner and I agree.

Next the integration test: the role of the parish priest is wholly integrated into the organisational structure of the Church’s enterprise. He is, in Denning LJ’s terms (see [66] above), part and parcel of the organisation, not only accessory to it. This picks up on the test applied by Rix LJ at [79] of Viasystems (see [39] above):

“… what one is looking for is 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.”

Finally the entrepreneur test: is the priest more like an independent contractor than an employee? Is he actually behaving as an entrepreneur, running his own little business, taking the appropriate risks and enjoying the resulting profits? True it is that the priest is not directly paid a salary but is dependent on what he can take from the collections given at Mass. As I understand it, any surplus forms part of the parish funds and is hardly his to put in his pocket. More recently a Decree on the Ministry and Life of Priests n.20 (December 1965), implemented in part through the Apostolic Letter Ecclesiae Sanctae of 6th August 1966 provided that:

“They (the bishops) should also, either individually for their own diocese or better still by several acting in accord in common territory, see to it that rules are drawn up by which due provision is made for the decent support of those who hold or have held any office in the serving of God.”

That smacks a bit more like being paid a wage. But it certainly does not resonate with being an entrepreneur. The very fact that the priest is required by Canon Law to reside in the parochial house close to his church is rather like the employee making use of the employer’s tools of trade.

At [70] above I distilled the essence of being an employee to be that he is paid a wage or salary to work under some, even if only slight, control of his employer in his employer’s business for that business. Father Baldwin may not quite match every facet of being an employee but in my judgment he is very close to it indeed.

The result of each of the tests leads me to the conclusion that Father Baldwin is more like an employee than an independent contractor. He is in a relationship with his bishop which is close enough and so akin to employer/employee as to make it just and fair to impose vicarious liability. Justice and fairness is used here as a salutary check on the conclusion. It is not a stand alone test for a conclusion. It is just because it strikes a proper balance between the unfairness to the employer of imposing strict liability and the unfairness to the victim of leaving her without a full remedy for the harm caused by the employer’s managing his business in a way which gave rise to that harm even when the risk of harm is not reasonably foreseeable.

Can I test the conclusion in two ways? The first is admittedly loose: applying, or rather adapting, some of Somerville LJ’s test in Cassidy v Ministry of Health cited at [65] above, I ask was the relationship akin to employment within the meaning which an ordinary person would give the words? I believe that the passenger on the fictional Clapham omnibus would say of a parish priest that he is a servant of the parish and that the parish should be ultimately responsible for his actions. But that is, of course, an emotive, and therefore a not very reliable test.

Let me then remove the emotion, which certainly pervades this case where one is outraged by the thought, if it be true, that a parish priest would defile a young girl on the day of her first communion. Change the facts completely. Let us assume the priest receives an urgent call to minister the last rites to a faithful member of his parish close to death. Canon 468 requires this of him:

“With sedulous care and an outpouring of love, the parish priest must help the sick in his own parish, indeed above all those close to death, solicitously supporting them with the Sacraments and commending their souls to God.”

To perform this sacred duty he jumps on his battered old bicycle and pedals furiously down the hill to attend his ailing parishioner. Alas he does so negligently, fails to observe another of his flock on a controlled pedestrian crossing. She is knocked down and suffers injury. The priest was clearly in the course of doing what he was appointed to do. There is no problem about applying stage 2 of the test. But he has taken a vow of poverty. He is not himself insured. But the parish is. Are we really having to conclude that his bishop and/or the diocesan trust are not vicariously liable because he is not employed or in a relationship akin to employment? Are we to say he is simply an office holder personally responsible for the manner in which he conducts his office. I think not.

Consequently, whilst acknowledging the strength of the arguments to the contrary, I would dismiss this appeal.