by Professor Paula Giliker, University of Bristol Law School
This blog will discuss two recent and important 2023 cases: the UK Supreme Court decision in Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB [2023] UKSC 15 and that of the High Court of Australia in CCIG Investments Pty Ltd v Schokman [2023] HCA 21. Both discuss vicarious liability and, in particular, the Stage 2 course of employment test. To establish vicarious liability in tort, two stages must be satisfied. Stage 1 is concerned with the relationship between the defendant and the person committing the tort (usually that of employer/employee). Stage 2 is concerned with the link between the commission of the tort and that relationship.
Since 2015, this two-stage test has been addressed by the UK Supreme Court five times; most recently in Barclays Bank plc v Various Claimants [2020] UKSC 13 (Stage 1 test) and Wm Morrison Supermarkets plc v Various Claimants [2020] UKSC 12 (Stage 2 test). In 2016, the High Court of Australia in Prince Alfred College Inc v ADC [2016] HCA 37 addressed the Stage 2 test. The multitude of decisions on vicarious liability is indicative of the problems experienced by the courts in seeking to provide clear and predictable rules of law in a field that has had to address claims of vicarious liability for torts varying from institutional child sexual abuse, racist assaults, data breaches and harassment to more mundane claims of negligent driving and misconduct in the workplace. In BXB and Schokman, the UK Supreme Court and High Court of Australia sought once again to provide clearer guidance for courts, overturning the decisions of the Court of Appeal below. The focus of both cases was the Stage 2 test. While BXB does address the Stage 1 relationship test, it essentially echoes the approach of the UK Supreme Court in Barclays Bank that parties should focus on the details of the relationship and that a relationship “akin to employment” will only satisfy Stage 1 when it resembles a traditional employment relationship (see [58](ii)). Schokman reiterated (at [51]) Australia’s refusal to accept that relationships “akin to employment” could satisfy Stage 1, although the existence of a contract of employment was not disputed in that case.
BXB and the course of employment
Mrs B had been raped by a close friend, Sewell, who was an elder in the Jehovah’s Witness congregation she and her family attended. The religion encourages members to associate with other witnesses. The families of Mrs B and Sewell were friends who holidayed together and, on the day in question, after a morning evangelising, had gone out to lunch and returned with their children to the Sewell household. This is where Mrs B was raped.
The Court of Appeal, as reported in “Tailoring” the Close Connection Test for Sexual Abuse Victims: Vicarious Liability in the Court of Appeal (cited by the Supreme Court in BXB), had relied on obiter dicta in the 2020 Morrison case that suggested that the Stage 2 test would be applied differently in cases concerned with the sexual abuse of children where “a more tailored version of the close connection test is applied” (see [23], [36]). This, it argued, extended to adults. This “tailored” test was contrasted with the general test set out in Morrison at [32], which stipulates that, to be in the course of employment, the tort must be so closely connected with acts the employee was authorised to do that it may fairly and properly be regarded as done by him while acting in the ordinary course of his employment.
In BXB, the rape did not arise from Sewell’s religious activities. It was argued, however, that Mrs B’s faith made her vulnerable to the power exercised over her by an elder. Nicola Davies L.J., giving the leading judgment, argued that the “tailored” test:
… is more open textured [than the general test] and requires an analysis of all aspects of the relationship between the tort and the abuser’s status … On the facts of this claim, what is relevant for the purpose of the close connection test is the conferral of authority by the Jehovah’s Witness organisation upon its elders, coupled with the opportunity for physical proximity as between an elder and [members of] the congregation”: [2021] EWCA Civ 356, [83]-[84].
The Court of Appeal thus held that the authority conferred on Sewell as an elder encouraged Mrs B to trust him and not break off their friendship and the power it engendered made it just and reasonable for the defendant religious organisation to be held vicariously liable for Sewell’s act in raping Mrs B.
This ruling gave rise to fears of a break-away Stage 2 test for sexual abuse cases. My earlier blog noted that “the Court of Appeal has created uncertainty in this area of law … BXB leaves the law in need of clarification and facing the prospect of yet another trip to the Supreme Court.”
This trip did occur, and the UK Supreme Court in April 2023 overturned both the Court of Appeal decision and the suggestion of a distinct test for sexual abuse cases:
The same two stages, and the same two tests, apply to cases of sexual abuse as they do to other cases on vicarious liability … The idea that the law still needs tailoring to deal with sexual abuse cases is misleading. The necessary tailoring is already reflected in, and embraced by, the modern tests: [58](v).
Lord Burrows’ judgment (with which Lords Reed, Hodge, Briggs and Stephens agreed) is notable for its intention to build on the 2020 decisions of Barclays Bank and Morrison to provide greater clarity to the law. At [58], his Lordship set out five key principles of the modern law of vicarious liability, clarifying the role of policy and the Stage 1 and 2 tests. The wording of the Stage 2 close connection test is further refined to include express reference to “quasi” or “akin to” employment relationships and to omit the word “ordinary” before course of employment to make it easier to include intentional torts such as sexual abuse. It now reads:
… whether the wrongful conduct was so closely connected with acts that the tortfeasor was authorised to do that it can fairly and properly be regarded as done by the tortfeasor while acting in the course of the tortfeasor’s employment or quasi-employment: [58](iii)
Lord Burrows clearly shared the view of Lady Hale in Barclays Bank that policy had played too great a role in vicarious liability and created uncertainties in application leading to numerous appeals to the higher courts. He agreed that policy might be helpful in doubtful or difficult cases but argued that it should not be applied as part of the two-stage test. Instead, having applied the two-stage test to reach a provisional outcome on vicarious liability, policy provides a useful final check on the justice of the outcome. He also avoided providing a detailed outline of policy arguments, commenting briefly:
What precisely the underlying policy is has been hotly debated over many years by academics and judges alike. … At root the core idea … appears to be that the employer or quasi-employer, who is taking the benefit of the activities carried on by a person integrated into its organisation, should bear the cost (or, one might say, should bear the risk) of the wrong committed by that person in the course of those activities: [58](iv)
Looking at the facts of the case, the fact that the rape was unconnected to any of Sewell’s duties as an elder and there was a lack of evidence of control or grooming by Sewell led the Court to conclude that the primary reason that the rape took place was not because Sewell was abusing his position as an elder but because he was abusing his position as a close friend of Mrs B.
Schokman and the course of employment
Schokman, in contrast, is a negligence case. Schokman and Hewett were required by their employer to share rented accommodation proximate to their workplace on an island resort. One night, while drunk. Hewett urinated over Schokman’s face, having lost his way to the bathroom. Given their contract of employment had required them to live in shared accommodation, Schokman alleged that this negligent act could be regarded as in the course of employment rather than an extremely unhygienic frolic of his own.
Perhaps surprisingly this argument succeeded in the Queensland Court of Appeal:
[Hewett] was not occupying the room as a stranger, but instead as an employee, pursuant to and under the obligations of his employment contract. There was in this case the requisite connection between his employment and the employee’s actions: [2022] QCA 38, [42] per McMurdo JA.
In other words, the fact the employer required him to live in shared accommodation provided the connection between the employment and the negligent act. As the High Court rightly stated, this misunderstood the test. The question is whether the act (here urination) was in the course of his employment and to determine this the court would look at what Hewett had been employed to do. No part of Hewett’s job related to the accommodation. This was just a convenient way to house employees in a remote location. While it provided the opportunity for Hewett’s drunken actions to harm Schokman, mere opportunity in Australia (and in England and Wales) has never satisfied Stage 2.
What is important about Schokman is its review of the Stage 2 test post-Prince Alfred College (2016). In ruling that criminal acts of child sexual abuse might satisfy the Stage 2 test, the High Court in that case had stated that:
In cases of this kind, the relevant approach is to consider any special role that the employer has assigned to the employee and the position in which the employee is thereby placed vis-à-vis the victim. In determining whether the apparent performance of such a role may be said to give the “occasion” for the wrongful act, particular features may be taken into account. They include authority, power, trust, control and the ability to achieve intimacy with the victim: [81].
Commentators subsequently questioned whether this “occasion” test was confined to sexual abuse or would extend to all intentional torts or even negligence. Schokman (a negligence case) did not apply this test. Guided by previous case-law, the High Court of Australia (HCA) asked whether the tortious act in question has a sufficiently strong connection with the employment, and what is entailed in it, so as to be said to have been done in the course of that employment: [20].
Reference to the “connection” test, while accepted in England and Wales, might be regarded as somewhat surprising in Australia given that the HCA’s comments in Prince Alfred College that “a test of connection does not seem to add much to an understanding of the basis for an employer’s liability”: [68]. Such comments were explained by the majority in Schokman as merely indicating that something more than the sufficiency of connection was required in sexual abuse cases – the context of Prince Alfred College. The matter, then, is one of focus:
… in determining whether vicarious liability arises for an act of sexual abuse of a child that took place in a school or other institution, regard may be had to any special role the employer has assigned to the employee. Features of the employment such as authority, power, trust, control and the ability to achieve intimacy should be considered. Clearly a role embodying features of this kind may point to a strong connection between the employment and the wrongful act: [34]
This suggests that the “occasion” test should now be regarded as a specific application of the connection test. Gleeson J, in a separate judgment, went further and specifically criticised the term “occasion” ([95]), which she believed too easily confused with that of opportunity.
Edelman and Steward JJ offered a further explanation of Prince Alfred College – that it would be better regarded as a non-delegable duty case ([81]). In a sophisticated judgment, they argue that the time is ripe to divide agency and non-delegable duties cases from true cases of vicarious liability and reconceptualise this area of law. Such a radical proposal, which would require revisiting previous case-law, was obiter and was not addressed by the other members of the Court. It is likely, however, to be picked up by academic commentators in both the UK and Australia.
In sum, the Court agreed that Hewett’s drunken act of urination was unauthorised, in no way required by, or incidental to, the employment: “In truth, it had no real connection to it.” [46].
Conclusion
BXB and Schokman seek to stabilise the law of vicarious liability. Causes of uncertainty – a separate test for sexual abuse cases? a distinct test of “occasion”? – have been addressed by emphasising the need for general tests that draw on the idea of incremental legal development guided by decided cases and focus on the facts of each individual case. The use of the “connection” test in Schokman is justified by reference to its use in Salmond on Torts (a textbook influential across the common law world and the source of the traditional test for course of employment which the ‘close connection’ test replaced). The English and Australian case-law on course of employment does, on the evidence of these two cases, seem to be drawing closer. Whether they both achieve their goal in bringing extra stability to the law remains to be seen…