James-Bowen v Commr of Police [2018] UKSC 40

Police officers, sued alongside their employer for assault, later sued the Police Commissioner for reputational damage caused by the settlement of the claim. The Supreme Court held the Commissioner did not owe the officers a duty of care in the conduct of litigation.

Facts

In December 2003, Mr Babar Ahmad was arrested by officers of the Metropolitan Police Service (the respondents) on suspicion of terrorism offences. He alleged he was subjected to a serious assault during his arrest. No criminal charges were brought against Mr Ahmad in the UK. He was later extradited to the USA, where he was convicted of terrorism-related offences. Mr Ahmad brought a civil claim for damages against the Commissioner of Police of the Metropolis (the appellant), alleging assault and battery. The Commissioner was sued as being vicariously liable for the actions of the officers. The officers were later prosecuted for causing actual bodily harm to Mr Ahmad but were acquitted in June 2011. Despite the acquittal, the Commissioner settled the civil claim brought by Mr Ahmad in 2012. The settlement included a payment of £60,000 and the publication of an admission of liability and a public apology, acknowledging that Mr Ahmad was the victim of ‘gratuitous violence’. The officers subsequently brought a claim against the Commissioner in negligence, alleging that the handling of the civil claim and the nature of the settlement had caused them purely economic loss, psychiatric injury, and damage to their reputations. The High Court struck out the claim, but the Court of Appeal reversed that decision, holding that the police did owe a duty of care to its officers in these circumstances.

Issues

The central legal issue before the Supreme Court was whether an employer (the Commissioner) owes a duty of care to its employees (the police officers) to safeguard their economic and reputational interests in the conduct of litigation brought by a third party against the employer, in which the employees are involved as witnesses and whose conduct is the subject of the claim. This involved the court considering whether to recognise a new category of duty of care in the tort of negligence.

Judgment

The Supreme Court unanimously allowed the appeal, restoring the High Court’s order striking out the claim. The leading judgment was delivered by Lord Lloyd-Jones, with whom the other justices agreed.

The Court applied the three-stage test from Caparo Industries plc v Dickman to determine whether a novel duty of care should be imposed: foreseeability of harm, proximity of relationship, and whether it would be fair, just, and reasonable to impose the duty.

While the Court accepted that harm to the officers’ reputations and economic interests was a foreseeable consequence of the settlement, it found that the relationship of proximity was not established for this type of harm. Crucially, the Court’s decision rested on the third limb of the Caparo test. It was held that it would not be fair, just, and reasonable to impose such a duty of care. The principal reason was the irreconcilable conflict of interest that would arise.

Lord Lloyd-Jones explained that the Commissioner, as the defendant in the civil claim, had a right and interest to conduct that litigation in the manner she thought was most appropriate, including settling the claim. This interest would conflict with the supposed duty to protect the officers’ personal interests. He stated:

In the conduct of the defence to a claim, the defendant’s own interests, and his own view of the merits of the claim and of the appropriate steps to be taken, must be paramount. Where vicariously liable for the actions of his employees, he may wish to apologise for their actions or to settle the claim on the best terms he is able to achieve. This is a legitimate interest which should not be subordinated to the interests of the employees in question.

The imposition of a duty of care on the Commissioner towards the officers would create a situation where the Commissioner would be pulled in two different directions, impeding her ability to make strategic decisions in the litigation. This would include decisions about admitting liability or settling the claim to avoid the expense and risks of a trial. Lord Lloyd-Jones observed:

The duty would inhibit the Commissioner from making a reasonable settlement of a claim of the kind which occurred in the present case, where the Commissioner considered that a successful defence of the claim at trial was unlikely.

In a concurring judgment, Lord Mance emphasised the unworkable nature of such a duty, describing the potential for conflict as intolerable for any public body trying to manage litigation responsibly. He concluded:

The pressures and potential for conflict of interest would to my mind be intolerable. It is a situation which the law of tort and public policy should not countenance.

Implications

The decision firmly establishes that an employer does not owe a duty of care to protect an employee’s reputational or economic interests when defending a claim brought by a third party arising out of the employee’s conduct. It affirms the paramountcy of a defendant’s autonomy in conducting litigation as they see fit. The judgment is a significant statement on public policy grounds against creating new duties of care that would generate conflicting obligations and hinder the efficient resolution of legal disputes, particularly for public authorities who face claims of vicarious liability for their employees’ actions.

Verdict: The appeal was allowed. The Supreme Court held that the Commissioner of Police of the Metropolis did not owe the respondent officers a duty of care.

Source: James-Bowen v Commr of Police [2018] UKSC 40