Royal Courts of Justice
Strand, London, WC2A 2LL
Before:
THE HON. MRS JUSTICE NICOLA DAVIES DBE
Between:
VARIOUS CLAIMANTS | Claimants |
- and - | |
BARCLAYS BANK PLC | Defendant |
Ms Lizanne Gumbel QC and Mr Robert Kellar (instructed by Slater and Gordon LLP) for the Claimants
Lord Faulks QC and Mr Nicholas Fewtrell (instructed by Hill Dickinson LLP) for the Defendant
Hearing date: 11 July 2017
Judgment Approved
Mrs Justice Nicola Davies:
In this group litigation 126 claimants seek damages against Barclays Bank (“the Bank”) in respect of alleged sexual assaults to which they were subjected by Dr Gordon Bates. At the time of the alleged assaults the majority of the claimants were applicants for employment with the Bank, a small number were existing employees. Each claimant was required to attend the home of Dr Bates where he had a consulting room. There Dr Bates is alleged to have carried out a medical assessment and examination on behalf of the Bank and in the course of so doing sexually assaulted each of the claimants. On 6 April 2016 a Group Litigation Order was made by the Senior Master with the consent of the President of the Queen’s Bench Division.
On 15 December 2016 I ordered that:
“There should be a trial of the following preliminary issue, namely: whether the Defendant is vicariously liable for any assaults that any Claimant may prove to have been perpetrated by Dr Gordon Bates in the course of medical examinations carried out at the request of the Defendant either before or during their employment with the Defendant.”
This is the judgment upon the preliminary issue.
Background
Dr Bates was born in 1926. Between 1968 and 1984 he carried out medical assessments and examinations on behalf of the Bank for their employees or prospective employees. Dr Bates died in 2009. Many of the claimants were teenagers at the date of the examinations, some were aged 16.
It was a requirement for any person who was to be offered a job by the Bank that he or she would undergo a medical examination prior to the offer of employment. Documentation shows that at the relevant time the Bank was positively recruiting young women for training. Applicants who were successful at interview were informed that they would be offered a job subject to passing a medical examination. The Bank instructed the applicant to see Dr Bates for the purpose of that examination, the applicant was notified of the place, date and time. The claimants were examined by Dr Bates at his home address in Newcastle-upon-Tyne. A room in the house had been converted into a consulting room for the doctor.
A claimant could visit the doctor on his or her own, some claimants attended with one or more members of their family. When the claimant was seen by the doctor the claimant was alone in the room with him, the examinations took place in the absence of a chaperone. It is the claimants’ case that Dr Bates required a claimant to undress down to his or her underwear. Thereafter, the precise nature of the allegations varies as between the claimants but they typically include:
inappropriate breast examinations; and/or
digital vaginal contact or penetration; and/or
digital anal contact or penetration.
Following the examination Dr Bates completed a medical examination pro forma for each claimant which was headed with the Bank’s logo and entitled “Barclays Confidential Medical Report”. The report was completed and signed by Dr Bates and by the claimant. It was returned to the Bank where it was scrutinised and, if satisfactory, an offer of employment was made. Dr Bates appears to have been paid a set fee by the Bank for each of the examinations.
In 2013 a police inquiry was carried out investigating at least 48 victims of alleged sexual assaults by Dr Bates. The police concluded that there would have been sufficient evidence to pursue a prosecution had the doctor been alive. During the police investigation the head of employee relations at the Bank wrote to the women who were being investigated and offered an employee support helpline and a confidential counsellor should the same be required.
The claimants’ case
In essence the claim is contained in paragraphs 1.4 to 1.10 of the Master Particulars of Claim as follows:
“1.4. …the Defendant utilised the services of Dr Bates in the role of medical examiner of the prospective employees for purposes which included the following:
(a) To satisfy the requirement that the individual concerned was medically suitable for service in the bank; and
(b) To confirm that Dr Bates would recommend acceptance of the individual concerned for life assurance at ordinary rates.
1.5. The medical examinations carried out by Dr Bates were recorded on forms headed ‘Barclays Confidential Medical Report’, the word ‘Barclays’ being written in the Defendant’s typescript and logo at the time. It is the Claimants’ understanding that these forms were produced by or for the Defendant as their template standard documents and the content was dictated by the Defendant.
1.6. The medical examinations which the Claimants were required to undergo with Dr Bates were undertaken for the purpose of furthering the aims of the Defendant and ultimately for the purpose of allowing the Defendant to employ sufficient and suitable staff to make their business profitable. The Defendant required young applicants to undergo health checks before being employed by the Defendant (or during the course of their employment) in for purposes which included avoiding the expense to themselves of employing staff with health problems that might require its staff to have protracted periods away from work. There was no benefit to the Claimants in undergoing the medical examinations other than to comply with the Defendant’s request and/or the Defendant’s refusal to employ them without such an examination.
1.7. The Claimants understand that the Defendant used Dr Bates to carry out these medical examinations for all applicants in the North East area who had performed satisfactorily at interview. This was the position from around 1967 until around 1984. Dr Bates was, therefore, integrated into the Defendant’s business in order to provide the medical examinations which it required and which it had no other employee to carry out.
1.8. The Claimants were all young at the material time and had been offered a job by the Defendant on condition that they attended and passed the medical examination. They had no real choice as to whether to attend the medical examination. In addition, some claimants were required to attend medical examinations with Dr Bates during the course of their employment for Barclays Bank.
1.9. The Claimants had no choice in respect of the identity of the Doctor who was to examine them in order for them to be able to take up their roles as employees for the Defendant. Dr Bates was held out by the Defendant to the Claimants as a Doctor who had the necessary medical skills to examine the Claimants and as a Doctor whose examination would be confined to such as was necessary for medical purposes. The Defendant notified Dr Bates of the name of patients that they were arranging to see him for a medical examination. The examinations were always arranged between the Defendant and Dr Bates not between the Claimants and Dr Bates.
1.10. The sexual and physical assaults the Claimants in this action complain of were perpetrated in circumstances where:
(a) Dr Bates was directly employed by the Defendant; or
(b) Dr Bates was engaged by the Defendant in a role akin to employment; or
(c) the examination took place only as a result of the Defendant holding out Dr Bates as a competent and appropriate Doctor to carry out a medical examination, the Defendant required the examination to take place and the Claimants relied on this assurance to attend for an examination as required by the Defendant.”
The responsibility of the Bank for the actions of Dr Bates is alleged in the Particulars of Claim to be as follows:
“The Defendant was at all relevant times operating as a High Street Bank for profit and employed a large number of men and women to work in its banking operation. According to literature published by the Defendant in 1968 the Defendant had a staff of over 34,000 people of which more than half were women…
It was a requirement for any woman who was offered a job by the Defendant that they would undergo a medical examination before taking up the offer of employment with the Defendant…
The Defendant owed a duty of care and/or non-delegable duty of care to the applicants to whom it offered employment subject only to a medical examination to ensure such medical examination was carried out by a suitable medical practitioner in suitable premises and with suitable safeguards against sexual assault…
The Defendant is vicariously liable for any negligence, breach of duty or deliberate act of Dr Bates carried out in the course of examinations carried out at the Defendant’s request. The Defendant employed Dr Bates as a medical examiner for young applicants offered employment.
The Claimants allege that in the circumstances of this case the Defendant was vicariously liable for the sexual assaults perpetrated by Dr Bates. The Claimants will rely in particular on the analysis of Lord Phillips in the Supreme Court in the case of in Various Claimants v Catholic Child Welfare Society and others [2013] 2 AC 1. It is alleged by these Claimants that Dr Bates was clearly carrying out the work of the Defendant and there is a sufficiently close connection between the Doctor and the Bank which is at least: ‘akin to employment’.”
For the purpose of this hearing witness statements have been served from five claimants. No witness was required to attend for cross-examination. Each claimant was aged 16 at the date of the examination and believed it was compulsory to attend, if she did not do so no job would be offered. No claimant was offered a choice as to the doctor. The arrangements for the examination were made by the Bank. The claimant was required to attend at the date, time and place specified. As to what occurred at Dr Bates’ home, the facts set out in paragraph 5 above are derived from the claimants’ statements.
The defendant’s case
In its Master Defence the defendant does not admit or deny the allegations of sexual abuse made by the claimants. As to the legal status of Dr Bates it is denied that he was an employee of the Bank, thus, on a conventional analysis, it would not be vicariously liable for his alleged sexual abuse of its prospective employees. It is said to be clear on the evidence that Dr Bates was self employed and was engaged by the Bank as an independent contractor. He would be liable for any assaults he perpetrated.
For the purpose of this hearing the defendant filed five witness statements. The first is from Margaret Glendinning who began working for Martins Bank in 1948, in 1969 Martins merged with the Bank. From 1966 Ms Glendinning was responsible for recruiting female staff in the northeast, they were recruited as office trainees. A candidate who was successful at interview was sent a standard letter confirming that they had an offer of employment subject to satisfactory O Levels, a satisfactory six month probationary period and a satisfactory medical examination. The letter would include details of the time and venue of the examination. The candidates’ details were passed to a clerk who would arrange appointments with Dr Bates. A fee was payable to Dr Bates for each medical examination. Following the medical Dr Bates would return a standard report to the Bank completed and signed by himself and the candidate. Ms Glendinning would read the forms and if the medical was satisfactory the successful candidate would be offered employment. It was Ms Glendinning’s belief that there was a set fee for each medical examination and that Dr Bates would invoice the Bank accordingly. Ms Glendinning has been told by the defendant’s solicitors that medical reports have been located which show that another doctor was instructed to perform pre-employment medical examinations at the same time in the Newcastle area. She was not able to recall that any other doctors were instructed in addition to Dr Bates. Ms Glendinning also identifies the type of report which Dr Bates completed and indeed his handwriting on a copy. It was towards the late 1980s that the Bank stopped sending applicants for pre-employment medical examinations.
David Giles worked for the Bank during the relevant period. At that time the Bank’s structure comprised a number of local head offices each of which had responsibility for recruitment in its own local area. Each head office had its own arrangements for instructing doctors to perform the pre-employment medical examinations. Mr Giles states that the doctors were not employed by the Bank but were paid a fee for each examination conducted.
A statement from Margaret Standing who was employed by Municipal Mutual Insurance (“MMI”) in Newcastle records that Dr Bates would carry out medical examinations for the insurance company in respect of which he was paid a fee for each examination.
Nigel Bates, the son of Dr Bates, has produced a detailed statement. His father qualified as a doctor in 1949, initially working at the Newcastle General Hospital. He worked full time at local hospitals until 1955, thereafter as a general medical practitioner. By 1962 Dr Bates had become dissatisfied with his work as a GP and began to conduct medical examinations for Australia House and Canada House for individuals and families who wished to emigrate. Initially he would do this work from his general medical practice but later an extension was added to the family home in order to create an additional room which could be used for the medical examinations. The dining room was used as a waiting room. Nigel Bates recalled that when medical examinations were being conducted it was not uncommon for his mother, his sister, their housekeeper or himself to be present in the house.
From the mid-1960s to the late 1970s Dr Bates was busy carrying out the emigration examinations. It was around 1965 that Dr Bates began performing medical examinations, initially for Martins Bank and following the merger in 1969 for the Bank. Margaret Glendinning organised the medical examinations for the Bank, she would telephone the house to make appointments when the Bank were recruiting and quite often made the arrangements with Dr Bates’ wife. Each examination lasted about 30 minutes. Dr Bates was paid a set fee for each examination, the Bank would send a cheque in respect of his fees by post. Dr Bates continued to perform the examinations for the Bank until 1985/1986 when he began to prepare for retirement. During the period that Dr Bates was performing the examinations for the Bank he was also performing a similar service for individuals going to work for a South African mining company and for an insurance company (which would appear to be MMI).
Dr Bates continued to carry out sessions at two local hospitals, the Queen Elizabeth Hospital in Gateshead and the Sunderland Royal Infirmary. Exhibited to Nigel Bates’ statement are copies of his father’s HMRC records which show that he worked for both health authorities between 1975 to 1986. Dr Bates also wrote for a local newspaper in a medical capacity. Following his death in 2009 Dr Bates’ son and daughter cleared all his old paperwork from the family home and destroyed it. At the time they were unaware of the existence of any potential claims relating to medical examinations.
Relevant legal principles
The scope of the duty: did Dr Bates owe a duty of care to the claimants for which the Bank can be vicariously liable?
In X (Minors) v Bedfordshire County Council [1995] 2 AC 633 Lord Browne-Wilkinson at pp752-3 stated
“The Court of Appeal drew a correct analogy with the doctor instructed by an insurance company to examine an applicant for life insurance. The doctor does not, by examining the applicant, come under any general duty of medical care to the applicant. He is under a duty not to damage the applicant in the course of the examination: but beyond that his duties are owed to the insurance company and not to the applicant.”
The claimants submit that if Dr Bates was employed by the Bank to carry out health checks his duty to carry out such checks competently may only have been owed to the Bank and not to the claimants. The defence submit that the words of Lord Browne-Wilkinson were no more than obiter dicta. Undisputed is the fact that Dr Bates owed a duty to each claimant to carry out the examination without injuring the claimant intentionally or negligently. It is the claimants’ case that Dr Bates did damage to each of the claimants in the course of the examination and thus the Bank is vicariously liable for any damage Dr Bates caused.
Vicarious liability for deliberate acts
Following the decision of the House of Lords in Lister v Hesley Hall Ltd [2002] 1 AC 215 the Bank can be held to be vicariously liable for the actions of Dr Bates which are said to be deliberate acts of sexual assault carried out in the course of medical examinations. In Lister it was found that the defendant was vicariously liable for the sexual assaults carried out by a warden in a children’s home overruling T v North Yorkshire County Council [1998] EWCA Civ 1208. Lord Millett at [84] stated:
“The law is mature enough to hold an employer vicariously liable for deliberate, criminal wrongdoing on the part of an employee without indulging in sophistry of this kind.”
Scope of vicarious liability: the evolving case law
The law relating to vicarious liability has developed significantly since the time when it was necessary to show a strict employer/employee relationship. It could be said that the law began to develop in the case of Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151 which extended the concept of vicarious liability from single to dual responsibility. In E v English Province of Our Lady of Charity [2012] EWCA Civ 938 Ward LJ comprehensibly reviewed the legal authorities and academic writings on this issue and described the position thus [60]:
“…[vicarious liability] 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 (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] QB 510 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.”
Ward LJ examined the principles to be applied in respect of vicarious liability in a situation that fell short of a conventional relationship of employment. The issue was whether a bishop could be vicariously liable for the actions of a Catholic priest. The test which Ward LJ set himself was whether the relationship of the bishop and the priest was “so close in character to one of employer/employee that it was just and fair to hold the employer vicariously liable”. In so doing he explored the question of control which he deemed 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. Ward LJ stated that control “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 the risks of harm to others.”
Ward LJ concluded that the time had come to “announce that the law of vicarious liability had moved beyond the confines of a contract of service”. At [57] he stated:
“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?”
At [81] Ward LJ concluded:
“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.”
Davis LJ gave a concurring judgment. Tomlinson LJ delivered a dissenting judgment.
In Catholic Child Welfare Society and Others v Various Claimants [2012] UKSC 56 Lord Phillips at [19] observed that “The law of vicarious liability is on the move.” Reviewing the judgment of Ward LJ in E above he identified the focus of determining the issue of vicarious liability as being in two stages:
“(1) was there a true relationship of employer/employee between D2 and D1? (2) was D1 acting in the course of his employment when he committed the tortious act?”
Lord Phillips agreed with the observations of Hughes LJ (as he then was) in the Court of Appeal judgment in the case namely that the test requires a synthesis of the two stages:
“i) The first stage is to consider the relationship of D1 and D2 to see whether it is one that is capable of giving rise to vicarious liability.
ii) … What is critical at the second stage is the connection that links the relationship betweenD1 and D2 and the act or omission of D1, hence the synthesis of the two stages.”
In considering the essential elements of Stage 1 Lord Phillips stated:
“Stage 1: the essential elements of the relationship
34. Vicarious liability is a longstanding and vitally important part of the common law of tort. A glance at the Table of Cases in Clerk & Lindsell on Torts, 20th ed (2010) shows that in the majority of modern cases the defendant is not an individual but a corporate entity. In most of them vicarious liability is likely to be the basis upon which the defendant was sued. The policy objective underlying vicarious liability is to ensure, insofar as it is fair, just and reasonable, that liability for tortious wrong is borne by a defendant with the means to compensate the victim. Such defendants can usually be expected to insure against the risk of such liability, so that this risk is more widely spread. It is for the court to identify the policy reasons why it is fair, just and reasonable to impose vicarious liability and to lay down the criteria that must be shown to be satisfied in order to establish vicarious liability. Where the criteria are satisfied the policy reasons for imposing the liability should apply. As Lord Hobhouse pointed out in Lister at para 60 the policy reasons are not the same as the criteria. One cannot, however, consider the one without the other and the two sometimes overlap.
35. 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.
The significance of control
36. In days gone by, when the relationship of employer and employee was correctly portrayed by the phrase ‘master and servant’, the employer was often entitled to direct not merely what the employee should do but the manner in which he should do it. Indeed, this right was taken as the test for differentiating between a contract of employment and a contract for the services of an independent contractor. Today it is not realistic 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. Many employees apply a skill or expertise that is not susceptible to direction by anyone else in the company that employs them. Thus the significance of control today is that the employer can direct what the employee does, not how he does it.
Control and the transfer of vicarious liability
…
41. At para 16 May LJ, applying Mersey Docks, held that the enquiry 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? The answer on the facts of the case was both the second and the third defendants. There was dual control and thus there should be dual vicarious liability.”
In considering the specific issue of sexual abuse Lord Phillips stated:
“85. The precise criteria for imposing vicarious liability for sexual abuse are still in the course of refinement by judicial decision. Sexual abuse of children may be facilitated in a number of different circumstances. There is currently concern at the possibility that widespread sexual abuse of children may have occurred within the entertainment industry. This case is not concerned with that scenario. It is concerned with the liability of bodies that have, in pursuance of their own interests, caused their employees or persons in a relationship similar to that of employees, to have access to children in circumstances where abuse has been facilitated.
86. Starting with the Canadian authorities a common theme can be traced through most of the cases to which I have referred. Vicarious liability is imposed where a defendant, whose relationship with the abuser put it in a position to use the abuser to carry on its business or to further its own interests, has done so in a manner which has created or significantly enhanced the risk that the victim or victims would suffer the relevant abuse. The essential closeness of connection between the relationship between the defendant and the tortfeasor and the acts of abuse thus involves a strong causative link.”
It is of note that the approach of the Court of Appeal in E above and of the Supreme Court in Catholic Child Welfare Society above is to look at the reality of the relationship between the individual causing the harm and the organisation for which the individual worked. It was the analysis of that relationship rather than the terms of any agreement which engaged the attention of the court. In particular the court examined the control mechanism and purpose of the organisation.
The test for vicarious liability has since been explored by the Supreme Court in two linked cases, namely: Cox v Ministry of Justice [2016] UKSC 10 and Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11. In Cox Lord Reed JSC stated:
“15. Vicarious liability in tort is imposed upon a person in respect of the act or omission of another individual, because of his relationship with that individual, and the connection between that relationship and the act or omission in question. Leaving aside other areas of the law where vicarious liability can operate, such as partnership and agency (with which this judgment is not concerned), the relationship is classically one of employment, and the connection is that the employee committed the act or omission in the course of his employment: that is to say, within the field of activities assigned to him, as Lord Cullen put it in Central Motors (Glasgow) Ltd v Cessnock Garage & Motor Co 1925 SC 796, 802, or, adapting the words of Diplock LJ in Ilkiw v Samuels [1963] 1 WLR 991, 1004, in the course of his job, considered broadly. That aspect of vicarious liability is fully considered by Lord Toulson in the case of Mohamud.
16. It has however long been recognised that a relationship can give rise to vicarious liability even in the absence of a contract of employment. For example, where an employer lends his employee to a third party, the third party may be treated as the employer for the purposes of vicarious liability. In recent years, the courts have sought to explain more generally the basis on which vicarious liability can arise out of a relationship other than that of employer and employee.
17. The general approach to be adopted in deciding whether a relationship other than one of employment can give rise to vicarious liability, subject to there being a sufficient connection between that relationship and the tort in question, was explained by this court in the Christian Brothers case, in a judgment given by Lord Phillips with which the other members of the court agreed. That judgment was intended to bring greater clarity to an area of the law which had been unsettled by a number of recent decisions, including those of the House of Lords in Lister v Hesley Hall Ltd [2001] UKHL 22; [2002] 1 AC 215 and Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366.
18. The case concerned the question whether the Institute of the Brothers of the Christian Schools, an international unincorporated association whose mission was to provide children with a Christian education, was vicariously liable for the sexual abuse of children by members of the institute, otherwise known as brothers, who taught at an approved school. Another organisation managed the school and employed the brothers as teachers. It had been held to be vicariously liable for the abuse. The issue was whether the institute was also vicariously liable. The Supreme Court held that it was. Vicarious liability was thus imposed on a body which did not employ the wrongdoers, in circumstances where another body did employ them and was also vicariously liable for the same tort.”
Lord Reed identified the five factors set out by Lord Phillips in Catholic Child Welfare Society above and stated:
“20. The five factors which Lord Phillips mentioned in para 35 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.
23. These three factors are inter-related. The first has been reflected historically in explanations of the vicarious liability of employers based on deemed authorisation or delegation, as for example in Turberville v Stampe (1698) 1 Ld Raym 264, 265 per Holt CJ and Bartonshill Coal Co v McGuire (1858) 3 Macq 300, [1858] UKHL 3_Macqueen_300, 306 per Lord Chelmsford LC. The second, that the tortfeasor's activity is likely to be an integral part of the business activity of the defendant, has long been regarded as a justification for the imposition of vicarious liability on employers, on the basis that, since the employee's activities are undertaken as part of the activities of the employer and for its benefit, it is appropriate that the employer should bear the cost of harm wrongfully done by the employee within the field of activities assigned to him: see, for example, Duncan v Findlater (1839) 6 Cl & Fin 894, 909-910; (1839) MacL & Rob 911, 940, [1839] UKHL MacRob_911, per Lord Brougham and Broom v Morgan [1953] 1 QB 597, 607-608 per Denning LJ. The third factor, that the defendant, by employing the tortfeasor to carry on the activities, will have created the risk of the tort committed by the tortfeasor, is very closely related to the second: since the risk of an individual behaving negligently, or indeed committing an intentional wrong, is a fact of life, anyone who employs others to carry out activities is likely to create the risk of their behaving tortiously within the field of activities assigned to them. The essential idea is that the defendant should be liable for torts that may fairly be regarded as risks of his business activities, whether they are committed for the purpose of furthering those activities or not. This idea has been emphasised in recent times in United States and Canadian authorities, sometimes in the context of an economic analysis, but has much older roots, as I have explained. It was reaffirmed in the cases of Lister and Dubai Aluminium. In the latter case, Lord Nicholls of Birkenhead said at para 21:
‘The underlying legal policy is based on the recognition that carrying on a business enterprise necessarily involves risks to others. It involves the risk that others will be harmed by wrongful acts committed by the agents through whom the business is carried on. When those risks ripen into loss, it is just that the business should be responsible for compensating the person who has been wronged.’
24. Lord Phillips's analysis in the Christian Brothers case 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.
25. Lord Phillips illustrated the approach which I have described by considering two earlier cases in the Court of Appeal. He discussed first its decision in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151; [2006] QB 510. That case concerned a situation of a kind which commonly arises in modern workplaces. Employees of the third defendants were supplied to the second defendants on a labour-only basis, under a contract between the two companies, and worked under the supervision of a self-employed person also working under a contract with the second defendant. The question was whether the second defendant, as well as the third, was vicariously liable for the negligence of the employees in the course of their employment. The Court of Appeal agreed that it was, but for different reasons: May LJ considered that the imposition of vicarious liability depended on who had the right to control the employees’ activities, whereas Rix LJ formulated a test which was based not on control, but on the integration of the employees into the employer’s business enterprise. He stated that vicarious liability was imposed because the employer was treated as picking up the burden of an organisational or business relationship which he had undertaken for his own benefit. Accordingly, what one was looking for was ‘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’: p 537. Lord Phillips endorsed the approach of Rix LJ.
26. Lord Phillips next considered the decision of the Court of Appeal in E v English Province of Our Lady of Charity [2012] EWCA Civ 938; [2013] QB 722. In that case, a diocesan trust, treated as being equivalent to the diocesan bishop, was held to be vicariously liable for sexual abuse committed by a Roman Catholic priest when visiting a children’s home in the diocese, on the basis that the relationship between the priest and the Roman Catholic Church was akin to employment. Lord Phillips summarised Ward LJ’s approach as asking ‘whether the workman was working on behalf of an enterprise or on his own behalf and, if the former, how central the workman’s activities were to the enterprise and whether these activities were integrated into the organisational structure of the enterprise’. Ward LJ found it possible to describe the relationship between the bishop and the priest as being akin to employment, as Lord Phillips put it, ‘by treating the ministry of the Roman Catholic Church as a business carried on by the bishop, by finding that the priest carried on that business under a degree of control by the bishop and by finding that the priest was part and parcel of the organisation of the business and integrated into it’: [2013] 2 AC 1, paras 49, 54.
…
29. It is important, however, to understand that the general approach which Lord Phillips described is not confined to some special category of cases, such as the sexual abuse of children. It is intended to provide a basis for identifying the circumstances in which vicarious liability may in principle be imposed outside relationships of employment. By focusing upon the business activities carried on by the defendant and their attendant risks, it directs attention to the issues which are likely to be relevant in the context of modern workplaces, where workers may in reality be part of the workforce of an organisation without having a contract of employment with it, and also reflects prevailing ideas about the responsibility of businesses for the risks which are created by their activities. 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. An important consequence of that extension is to enable the law to maintain previous levels of protection for the victims of torts, notwithstanding changes in the legal relationships between enterprises and members of their workforces which may be motivated by factors which have nothing to do with the nature of the enterprises’ activities or the attendant risks.”
In Mohamud above the court addressed the second stage of the test. Lord Toulson identified the law on vicarious liability as follows:
“44. In the simplest terms, the court has to consider two matters. The first question is what functions or ‘field of activities’ have been entrusted by the employer to the employee, or, in everyday language, what was the nature of his job. As has been emphasised in several cases, this question must be addressed broadly; see in particular the passage in Diplock LJ’s judgment in Ilkiw v Samuels [1963] 1 WLR 991, 1004 included in the citation from Rose v Plenty at para 38 above, and cited also in Lister by Lord Steyn at para 20, Lord Clyde at para 42, Lord Hobhouse at para 58 and Lord Millett at para 77.
45. Secondly, the court must decide whether there was sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable under the principle of social justice which goes back to Holt. To try to measure the closeness of connection, as it were, on a scale of 1 to 10, would be a forlorn exercise and, what is more, it would miss the point. …”
I agree with the submissions made on behalf of the claimants and the defendant that determination of the issue as to whether or not vicarious liability exists in a particular case involves a two stage test:
Is the relevant relationship one of employment or “akin to employment”?
If so, was the tort sufficiently closely connected with that employment or quasi employment?
Relevant to the determination of the first stage are the five policy criteria identified by Lord Phillips in Catholic Child Welfare Society at [35] and Lord Reed in Cox at [20-23]. It is accepted that the first and fifth criteria are not as significant as the second, third and fourth.
The claimants’ case
Apparent authorisation/delegation
Dr Bates was acting on behalf of the Bank Bank. Reliance is placed upon the fact that the defendant’s literature expressly stated that applicants must be able to “satisfy the Bank as to their general health and fitness”. The defendant wrote to the claimants in advance of examinations stating “As a first step we would like to make arrangements to have you medically examined by the Bank’s doctor ….” The medical reports which had to be signed by applicants were headed with the Bank’s logo.
The claimants placed their trust in Dr Bates in reliance upon the Bank’s name and reputation. They also felt compelled to undergo the examination because it was understood to be an essential stage of the Bank’s recruitment process.
Furtherance of business interests
Dr Bates was furthering the interest of the Bank’s business and was “part of its business activity”. The requirement to undergo a medical examination with Dr Bates was a precondition of the claimants’ employment or a requirement imposed during the course of their employment. This is conceded by the defendant in paragraph 2 of the Master Defence. Documentation disclosed by the defendant also suggests that a medical examination was a condition of entry into the defendant’s pension fund. The individual claimants had no specific interest in undergoing such a medical examination which was paid for by the Bank and not the applicant. Intrinsic to the work of the Bank is its workforce. In assessing the health of any present or future member of that workforce Dr Bates was working for the benefit of the Bank in providing, if the examination was passed, a healthy employee to take part in the activities of the Bank.
Creation of risk
By engaging Dr Bates in the way that it did the Bank created a risk of tortious activity. The claimants were vulnerable teenagers/children. They were required to attend medical appointments at Dr Bates’ home. The Bank’s template required that the claimants underwent a physical examination. No requirement for a chaperone was imposed. No claimant was afforded the opportunity to undergo a consultation by a female doctor or a doctor of their choice. It is submitted that by arranging for consultations in this way the Bank was creating a risk of sexual abuse which in fact occurred. The conditions which permitted the abuse to occur included the trust which the claimants placed in Dr Bates as the “Bank’s doctor” and the sense of obligation arising from the fact that examination was an integral part of the recruitment process which the applicants were required to pass.
Control
It is accepted that the degree of control is no longer regarded as an especially significant factor in the analysis of vicarious liability: Catholic Child Welfare Society [36], Cox [21]. This is said to be particularly so in the case of the conduct of a medical professional. Even if Dr Bates had been an employee it would be unrealistic to expect a high degree of control over the precise manner in which medical examinations were performed. In any event the Bank exercised a sufficient degree of control over the process as a whole by:
Stipulating to the claimants that they had to be seen by Dr Bates and only Dr Bates;
Directing Dr Bates which patients he was required to see;
Arranging that the claimants attended at Dr Bates’ home as the place of examination;
Making arrangements by paying the bus fare and giving directions for the claimants to attend Dr Bates’ address;
Providing a clear template for the consultation.
The Bank stipulated the history which had to be taken from applicants, the precise nature of the examinations which had to be performed which included the physical measuring of the chest.
The nature of the conduct
On the facts of this case the claimants contend that the second stage of the test should not be contentious. If the first stage is satisfied it is obvious that the abuse was carried out whilst the doctor was performing the very work he was instructed by the Bank to do. The abuse did not occur at any separate time. The task which Dr Bates was required to undertake by the Bank was to physically examine teenage girls. He did so whilst they attended his home address, unchaperoned and in circumstances where they often felt compelled to undergo an examination as a precondition of their employment. This arrangement clearly placed the young women at the risk of precisely the injury which Dr Bates perpetrated.
The defendant’s case
It is the defendant’s case that whatever the law is now it is not such as to make the Bank vicariously liable. In support of this contention the defendant relies upon the following facts and matters:
Dr Bates was not exclusively engaged by the Bank. He was self employed and his medical engagements were varied. He was in control of, and organised, his professional life. He was an “entrepreneur”;
Dr Bates did not examine patients at the Bank’s premises but did so at his home where he had his surgery;
The template used for his examinations was sent to him so that he could use his medical expertise to provide the information that the Bank required. His task was broadly similar to that carried out by independent doctors in a number of different contexts for example insurance, assessing fitness for travel, suitability for emigration and medico-legal purposes;
Dr Bates had no contract of employment with the Bank. At any time they could have ceased to instruct him without any or any good reason. His examination and opinions were not in any way a part of the Bank’s business which was banking.
Dr Bates was not an employee of the Bank thus, on a conventional analysis, the Bank would not be vicariously liable for his alleged sexual abuse of its prospective employees. The evidence demonstrates that Dr Bates was self employed, he was engaged by the Bank as an independent contractor, accordingly he would liable for any assaults he perpetrated. It is denied that Dr Bates’ relationship with the Bank was “akin to employment” and that he was “integrated” into the Bank.
On a traditional legal analysis of the uncontested facts the claimant’s case is unsustainable. The orthodox Salmond Test would mean there was no vicarious liability for two reasons: (1) Dr Bates was not employed by the Bank and (2) even if he was employed what he is alleged to have done was not sufficiently connected to his employment, this being a deliberate and criminal act. The defendant concedes that there has been a greater willingness by the courts to find vicarious liability than once was the case however the law has not moved and should not move so far as to find it on these facts.
As to the authority of E above Ward LJ and Tomlinson LJ, who gave the dissenting judgment, stated that they found the case difficult to decide. Tomlinson LJ observed that it is difficult to identify a coherent principle the application of which should lead to a finding of vicarious liability.
In considering the test for vicarious liability Ward LJ cast no doubt on the position of the independent contractor. At [69] he stated “…the law is clear: the employer is not vicariously liable for the torts of its independent contractor”.
The facts of E show that there was a continuity of contact, at best the priest had a latitude as to how he went about his duties. Contrast that with the role of Dr Bates who had separate consultations with different patients, in respect of each he was paid a set fee. Dr Bates organised his own professional life. Similarly, in Catholic Child Welfare Society, the relationship between the brother teachers, who worked in the schools, and the lay Roman Catholic order, which was the institute, was a markedly different factual situation from that of a medical practitioner. The core enterprise of the Bank was banking, a completely different factual scenario to that in E and Catholic Child Welfare Society. As to the authority of Cox above, the prisoner, the tortfeasor, who ignored the catering manager’s instructions and caused damage to her was working in the prison, he was paid for it and was part of the workforce. On no analysis of the role of Dr Bates is he a part of the Bank’s workforce. Any suggestions that the tortfeasor’s activity was integral to the defendant’s business activities is denied.
In addressing Stage 2 of the test it is submitted that the deliberate and clandestine abuse perpetrated by Dr Bates in his role as an examining, independent doctor could not amount to a close connection. The complete absence of capacity on the part of the Bank to “control” anything about the way in which Dr Bates performed his examination militates against any conclusion that there was a close connection between what he did and his assumed employment. Nothing he did could be said to be part of the Bank’s core enterprise, namely banking.
In Lister the court had regard to the circumstances of the tortfeasor’s employment which included close contact with pupils and the inherent risk that it involved in finding there was a sufficient connection between the work that he had been employed to do, namely a warden in a boarding house where the claimants were residents, which was attached to a school owned and managed by the defendants, and the indecent assaults on the boys. At [82] Lord Millet relied upon the fact that the school was responsible for the care and welfare of the boys, it entrusted that responsibility to the warden. He contrasted the position of the warden with that of a groundsman or school porter who, had they perpetrated the sexual assault, would not have made the school vicariously liable as neither was entrusted with the care and welfare of the boys. This is said to demonstrate the lack of integration evident on the facts of this case where no responsibility was placed upon Dr Bates. Mere opportunity is not enough, the connection must be close.
As to the check that it is fair, just and reasonable to impose a duty on an innocent employer for the deliberate acts of the doctor, the Bank could not have known about the abuse being carried out by the doctor. He was performing the alleged acts in secret, the Bank had no realistic ability to control his actions, the way in which he worked with the Bank was conventional in its process. Reliance is placed upon the fact that in considering the issue of whether this is fair, just and reasonable these acts occurred a long time ago, had the claims been made earlier the probate of Dr Bates’ estate amounted to £500,000 which would have provided sufficient monies to meet any claim by the claimants.
Conclusion
The defendant’s case is that Dr Bates was an independent contractor. The developments of the law in respect of the legal concept of vicarious liability have not affected the legal concept of the independent contractor. What the developments do require is a scrutiny of the relationship between the defendant and the tortfeasor. As Ward LJ observed in E above “the law of vicarious liability had moved beyond the confines of a contract of service”.
Having accepted the two stage legal test relevant to the question of vicarious liability (paragraph 27 above) and the five policy criteria in respect of Stage 1 the issue for the Court is whether on the facts of this case the two stages of the test are satisfied.
Stage 1: Is the relevant relationship one of employment or “akin to employment”?
Five criteria:
The defendant is more likely to have the means to compensate the victim than the tortfeasor and can be expected to have insured against that liability;
Underlying the concept of vicarious liability is the fact of two innocent parties and a balance having to be weighed. Dr Bates died some eight years ago, his estate has long since been distributed. The claimants have no recourse against Dr Bates, his medical defence insurers would not indemnify for alleged sexual assaults. The only legal recourse the claimants have is to sue the Bank for the vicarious acts of its tortfeasor. There is no issue that the Bank or its insurers have the means to meet such claims.
The tort will have been committed as a result of activity being taken by the employee on behalf of the employer;
An applicant’s employment was conditional upon the Bank being satisfied, as a result of the medical examination, that the applicant was medically suitable for service in the Bank and was recommended for life insurance at ordinary rates. Dr Bates was the chosen doctor of the Bank. Prospective employees or existing employees were given no choice as to the doctor to be seen. The Bank made arrangements for the medical examinations, directing present or future employees where to go and when. The medical reports completed by Dr Bates were headed with the Bank’s logo, signed by himself and by the relevant claimant. The claimants felt compelled to undergo the pre-employment examination because they understood (correctly) that it was an essential stage of the Bank’s recruitment process. The claimants had no reason to be examined by Dr Bates other than their proposed or existing employment with the Bank. It was the Bank which paid for the examination not the claimant. The work carried out by Dr Bates was for the benefit of the Bank, to ensure that those who were employed by the Bank had the health to carry out its work. Given all of these facts I find that the medical examination, assessment of a claimant and subsequent report of the same to the Bank by Dr Bates was performed for the benefit of the Bank and on its behalf.
The tortfeasor’s activity is likely to be a part of the business activity of the defendant;
The purpose of the pre-employment medical examination was to enable the Bank to be satisfied that a potential member of staff would, health wise, be an effective member of its workforce. A workforce is an intrinsic part of the business activity of a bank, it could not function as a business without it. The medical assessment enabled the Bank to satisfy itself that a present or future employee was physically suitable for the work which they were, or were to be, employed to do. The requirement to undergo the medical examination emanated solely from the Bank, it was of no health benefit to the individual concerned. In providing a medical assessment and conclusion, namely that a claimant was physically suitable to be a member of its workforce, Dr Bates was acting for the benefit of the Bank and in so doing was an integral part of the business activity of the Bank.
The employer, by employing the employee to carry on the activity, will have created the risk of the tort committed by the employee;
The Bank directed the claimant where to go for a medical examination. Many of the claimants were young girls, who were being seen and examined by a doctor they did not know. The claimant had no choice as to the doctor and was directed by the Bank to be seen and examined by him at his home. The Bank directed the doctor to perform a physical examination which included a chest measurement. The claimants, many of whom were 15 or 16, saw the doctor alone in his room when, as part of the medical examination, they were asked to remove clothing. In my judgment given the factual set of circumstances the Bank did create the risk of the tort which was allegedly committed by Dr Bates.
The employee will, to a greater or lesser degree, have been under the control of the employer;
The fact that Dr Bates organised his own professional life and carried out other medical activities does not negate an argument that he was under the control of the Bank. Were this to be a strict employer/employee situation the fact of part-time employment and/or whether the employee has one or more other jobs does not prevent an employer from being vicariously liable for acts or omissions occurring during the course of the employee’s relevant employment. Further the fact that Dr Bates performed the examinations in his own home does not negate the “control” argument. An employer can be vicariously liable for the act of its employee, e.g. a driver, even though the alleged act or omission takes place outside the employer’s premises. What has to be looked at is the control which existed as between the Bank and Dr Bates in respect of the identified activity namely medical assessments, examinations and reports.
Lord Reed in Cox agreed with Lord Phillips in Catholic Child Welfare Society in identifying the significance of control as being that the defendant can direct what the tortfeasor does not how he does it. This would be of particular relevance in this situation where the individual is conducting a medical examination and should be utilising his particular professional expertise and knowledge. It is of note that the Bank was directional in identifying the questions to be asked and the physical examinations to be carried out by the doctor for the purpose of completing the templated form. The control was of a higher level of prescription than might usually be found in the context of an examination required to be performed by a doctor. The control also manifested itself in directing the claimant to a particular doctor and giving the claimant no choice in the matter. I am satisfied that the Bank exerted sufficient control to satisfy this criterion. Accordingly the relevant criteria in respect of Stage 1 are met.
Stage 2: Was the tort sufficiently closely connected with that employment or quasi employment?
The alleged sexual assault occurred during the course of a medical examination which the defendant required the claimants to undergo in respect of present or future employment. The task of carrying out the medical examination was entrusted to Dr Bates by the defendant. The task assigned to Dr Bates placed him in a position to deal with the claimants. On the alleged facts he abused that position. It is difficult to see how it can sensibly be argued that his acts did not fall within the activity tasked to him. To use the words of Lord Phillips in Catholic Child Welfare Society in [84]:
“…the relationship has facilitated the commission of the abuse by placing the abusers in a position where they enjoyed both physical proximity to their victims and the influence of authority over them…”
The claimants were in physical proximity to Dr Bates by reason of the nature of the examination. He was a doctor and, at the time of these offences, is likely to have been viewed by young women as being in authority not least because he was the doctor chosen by their present or prospective employer to carry out a medical examination relating to their employment. The sexual abuse took place when the doctor was engaged in the duties at the time and place required by the Bank. On the facts I find that the alleged sexual abuse was inextricably interwoven with the carrying out by the doctor of his duties pursuant to his engagement by the Bank. In the circumstances I find that the tort is so closely connected with that employment or engagement as to satisfy the second stage.
Applying the check of whether my conclusions are just and fair I accept that this is a balancing exercise between two innocent parties. I understand the submission made on behalf of the defendant that had these claims been made earlier Dr Bates and his estate could have had the financial means to meet them. The ability of any person to make a claim of sexual abuse is never straightforward. These are claims made many years after the alleged abuse and in the Master Defence the defendant has taken the limitation point. The action against the Bank is the only legal recourse now available to claimants. Balancing those factors and applying the just and fair test does not cause me to alter the conclusions. Accordingly I find that the defendant is vicariously liable for any assaults that any claimant may prove to have been perpetuated by Dr Gordon Bates in the course of medical examinations carried out at the request of the defendant either before or during their employment with the defendant.