Barclays Bank v Various Claimants: where does it take us on liability for property damage?

07 Apr 2020

Whilst a key judgment for companies and insurers concerned about the expansion of vicarious liability in historic abuse cases, the ruling in Barclays Bank v Various Claimants [2020] UKSC 13, one of two judgments given by the Supreme Court last week on the question of vicarious liability, has a much wider application for all who regularly rely on or encounter the defence of the independent subcontractor which protects a party from claims of vicarious liability for the negligent acts of a bona fide independent subcontract engaged at arm’s length.

Previous rulings on the status of priests, prisoners and foster parents have led to a perception that there has been a vicarious liability “mission creep” driven by public policy, which puts the independent subcontractor defence in doubt. In her unanimous judgment, Lady Hale ruled that nothing in any of the previous case law has eroded the distinction between relationships of employment/those analogous to employment and relationships with an independent subcontractor.  Policy considerations may give parties a steer, but nothing replaces a factual analysis of the relationship in question to determine whether it was one of or similar to employment, when liability might then attach. 

Here the doctor responsible for the abuse was not an employee of Barclays Bank, had no retainer, worked for a number of clients including the bank, had the right to refuse the work and would have had his own insurance policy (albeit that it was unlikely to respond to his deliberate actions), and so the Supreme Court ruled that the claimants could not pursue a claim against the bank for his actions. 

In summing up, Lady Hale also raised but rejected the option to use the “Limb B Worker” statutory definition as the guideline for the relationship of quasi-employment, which importantly means that vicarious liability may not attach even in those cases; it will all be a question of the individual facts of the case.

For those involved in the pursuit and defence of property damage claims, this judgment has not countermanded any of the previous rulings, and their broad interpretation of the definition of a relationship akin to employment will still govern the evaluation of which side of the line a particular relationship falls.  However, the judgment in Barclays is a clear indication by the court that there is a limit to the relationships that can be classed as employment, and we will need to take into account this change in the direction of travel.    

 

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Caroline Kane

Caroline Kane

Partner,
Birmingham


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