Supreme Court Increase the Chance of a Dual Vicarious Liability Finding

Hill Dickinson
November 22, 2012

http://www.hilldickinson.com/publications/insurance/2012/november/supreme_court_increase_the_cha.aspx

“Not just a borderline case” - Hill Dickinson success as Supreme Court hands down judgment in The Catholic Child Welfare Society & others –v- Various Claimants & The Institute of the Brothers of the Christian Schools & others.

Kari Hansen, partner, and Hayley Riach, solicitor, are celebrating as the vicarious liability arguments upon which this action has been fought for the past seven years have finally been determined. The Supreme Court has clarified the law as to vicarious liability of unincorporated associations and emphasised that where there is an argument for dual vicarious liability each individual 'employer' / 'employee' relationship should be considered on its own merits. This is the first time that the Supreme Court has confirmed that it is possible for there to be dual vicarious liability.

In recent years, the principles of vicarious liability have been considered by Courts at all levels, particularly in the context of the sexual abuse of children. Today, the Supreme Court unanimously found that it was fair, just and reasonable for an unincorporated association of lay religious Brothers (“the Institute”) to share vicarious liability for abuse committed by some of its members.

The claims and parties

A group, presently consisting of 170 claimants, allege that they were subjected to physical and sexual abuse whilst they were residents at St William’s, an Approved School and later a Residential Care Home (‘the school’) in Market Weighton, Yorkshire, between 1958 and 1992.

The claims were brought against two groups of defendants: the Middlesbrough Defendants (essentially various bodies and other representatives of the Diocese of Middlesbrough) and the Institute. Hill Dickinson represented the Insurers of the Middlesbrough Defendants who took over responsibility for the school in 1973 and to whom the liabilities of the previous managers of the school before that date were transferred by statute.

The Institute placed Brothers at the school as teachers. They resided in a community at the school and a Brother was almost always its headmaster. Out of 150 of the claimants for whom we have particulars, 146 allege that they were abused by Brothers.

Lower court decisions

At first instance, the Middlesbrough Defendants alone were held to be vicariously liable for all acts of abuse by the teachers at the School. HHJ Hawkesworth found that it would be neither fair nor just to hold the Institute vicariously liable given the Brothers’ contracts of employment with the Middlesbrough Defendants and before them the managers. This finding was upheld by the Court of Appeal.

The Middlesbrough Defendants appealed to the Supreme Court.

Supreme Court decision

The Supreme Court confirmed for the first time at this level that it was possible in law for there to be dual vicarious liability and then proceeded to apply the well-established two stage test for vicarious liability to the relationship between the Brothers and the Institute. The Supreme Court didn’t agree with the approach adopted by the lower courts and looked at the relationship between the Brothers and the Institute in its own right.

The Supreme Court unanimously found that this relationship was closer than that of an employer and its employees. The Institute’s strict rules governed every aspect of the Brothers’ lives and this control remained complete even if a Brother was sent to a school managed by a third party. Further, as the Brothers were acting for the common purpose of the unincorporated association and the placing of Brothers in schools where they also resided greatly enhanced the risk of abuse, the relationship was such that the Institute should share with the Middlesbrough Defendants vicarious liability for the abuse committed by the Brothers. In conclusion, the Supreme Court confirmed that this was not a borderline case and unanimously allowed the Middlesbrough Defendants’ appeal.

Implications

Once again, this judgment sees the courts extending the scope of vicarious liability as a matter of public policy.

This judgment has not only clarified the law as to the vicarious liability of unincorporated associations, but has emphasised that in cases where there is an argument for dual vicarious liability, the relationships between the ‘employee’ and each of the potential ‘employers’ have to be looked at separately and considered on their own merits, thus widening the potential number of situations in which dual vicarious liability may arise.

Given the current number of claimants and the probable value of these claims, the decision that liability should be shared with the Institute will have a significant financial benefit for Hill Dickinson’s client.