Barclays Bank plc v Various Claimants [2020] UKSC 13 (01 April 2020)

A doctor, engaged by Barclays Bank as an independent contractor, sexually assaulted job applicants during medical exams. The claimants sought to hold the bank vicariously liable. The Supreme Court held the bank was not liable, distinguishing the doctor's independent business from employment.

Facts

Between 1968 and 1984, Barclays Bank plc required prospective employees to undergo a medical examination as a condition of their employment offer. The bank engaged a self-employed medical practitioner, Dr Gordon Bates, to conduct these examinations. Dr Bates conducted the examinations, which were unsupervised, at his home. He was paid a fee for each report he produced. A group of 126 claimants alleged that Dr Bates had sexually assaulted them during these examinations and brought a group action against the bank. The claimants argued that the bank was vicariously liable for the assaults committed by Dr Bates, even though he was not an employee.

Issues

The central legal issue before the Supreme Court was whether Barclays Bank could be held vicariously liable for the intentional torts (sexual assaults) committed by Dr Bates. This required the court to determine if the relationship between Dr Bates and the bank was one that was ‘akin to employment’, such that it would be fair, just, and reasonable to impose vicarious liability. The case hinged on the distinction between an employee (or someone in a relationship akin to employment) and an independent contractor who is in business on their own account.

Judgment

The Supreme Court unanimously allowed the bank’s appeal, overturning the decisions of the High Court and the Court of Appeal. Lord Reed delivered the leading judgment, with which the other justices agreed.

Reasoning of the Court

Lord Reed clarified the established two-stage test for vicarious liability: first, a relationship between the tortfeasor and the defendant which is one of employment or ‘akin to employment’; and second, a sufficient connection between that relationship and the wrongdoing. This case turned on the first stage.

The Court stressed that the ‘akin to employment’ test, which had expanded the scope of vicarious liability in recent cases such as Various Claimants v Catholic Child Welfare Society (the Christian Brothers case), was not intended to erase the fundamental distinction between employment and a relationship with an independent contractor. Lord Reed cautioned against using the five policy reasons for vicarious liability (as set out by Lord Phillips in the Christian Brothers case) as a checklist. Instead, the crucial question is whether the tortfeasor is carrying on their own business or is integrated into the defendant’s organisation in a way that resembles employment.

In distinguishing Dr Bates’s position, Lord Reed stated:

The question is therefore whether the tortfeasor is carrying on business on his own account or whether he is in a relationship akin to employment with the defendant.

Applying this principle to the facts, the Court concluded that Dr Bates was a classic independent contractor. Lord Reed observed:

Dr Bates was not an employee of the bank. Nor, looking at the matter more broadly, was his relationship with the bank one which was akin to employment… He was a part-time medical examiner for the bank… He was at no time an employee of the bank, and his contract with the bank was for the provision of services… Dr Bates was in business on his own account as a medical practitioner with a portfolio of patients and clients. One of those clients was the bank… He was not paid a retainer… He was free to refuse an offered examination… The bank made the arrangements for the examinations but it did not prescribe how they were to be conducted.

The Court held that the lower courts had misinterpreted previous case law by focusing on the policy reasons for vicarious liability rather than on the nature of the relationship itself. Dr Bates was not integrated into the bank’s hierarchy; he was an external party providing a service.

Implications

This landmark decision clarifies and arguably contracts the doctrine of vicarious liability, which had been seen as progressively expanding. It reaffirms the importance of the distinction between employees (and those in similar relationships) and true independent contractors. The judgment provides greater legal certainty for businesses which engage independent contractors, confirming that they will not generally be held liable for the torts of those contractors, provided the contractor is genuinely running their own independent business. It signals a judicial check on the expansion of vicarious liability, emphasising that the ‘akin to employment’ test does not apply where the tortfeasor is clearly an independent third party.

Verdict: The Supreme Court unanimously allowed the appeal, finding that Barclays Bank was not vicariously liable for the actions of Dr Bates.

Source: Barclays Bank plc v Various Claimants [2020] UKSC 13 (01 April 2020)