This case was heard recently in the Court Of Appeal before Lord Justice Erwin, Lord Justice Moylan and Lady Justice Asplin. Lady Justice Asplin gave the leading judgment
with which the Lord Justices agreed. However, Lord Justice Erwin was keen to emphasise at paragraph 37, “how unusual are these facts and how limited will be the parallels to this case”.
The case concerned an appeal from the lower court where the Defendant company, Northampton Recruitment Ltd, was found not to have been vicariously liable for the actions of its managing director, Mr Major, when he assaulted an employee, Mr Bellman, at drinks following a works Christmas party in 2011.
In the lower court there was found to have been insufficient connection between Mr Major’s field of employment and the assault on Mr Bellman which resulted in him having permanent traumatic brain damage which rendered him incapable of conducting the proceedings himself, instead acting through a litigation friend. The reasons for this conclusion were set out as follows:
“However it cannot be right that the effect of such a wide range and duration of duties is that Mr Major could always be considered to be on, or potentially on duty, solely because he was in the company of other employees regardless of circumstances.”
“80. Standing back and considering matters broadly, what was taking place at 3.00 a.m. at the hotel was a drunken discussion that [a]rose after a personal choice to have yet further alcohol long after a works event had ended. Given the time and place, when the conversation was, as it was for a significant time, on social or sporting topics, no objective observer would have seen any connection at all with the jobs of those employees of the Defendant present. That it then veered into a discussion about work cannot provide a sufficient connection to support a finding of vicarious liability against the company that employed them. It was, or without any doubt became, an entirely independent, voluntary, and discreet early hours drinking session of a very different nature to the Christmas party and unconnected with the Defendant’s business. To use a hackneyed expression akin to “a frolic” of their own.
81 . . . Indeed I think it [the circumstances of this case] is a world away from circumstances which he and Lord Millet would have considered proper for loss distribution based on social or economic policy. The rule must have proper boundaries; it is not endless. To use Fleming’s phrase to find its application here would be to foist the Defendant, in reality its insurer, with an undue burden and would effectively make it what as McLachlin J described as “an involuntary insurer”.
Following this judgment, Mr Bellman appealed on the following grounds set out at paragraph 11 of the judgment:
“The grounds of appeal are that the Judge was wrong to hold that there was insufficient connection between the position in which Mr Major was employed and his wrongful conduct to make it right that NR should be liable under the principle of social justice. Further, in coming to that conclusion the Judge failed to take account of: the nature of Mr Major’s job as managing director and the power and authority entrusted to him over subordinate employees; the fact that the wrongful conduct was triggered by a challenge to his managerial authority; whether the conduct was personal rather than connected to Mr Major’s employment; that the risk of the wrongful conduct was enhanced by NR’s provision of alcohol; and that he wrongly concluded that the imposition of vicarious liability for conduct in such circumstances would be potentially uninsurable and would place an undue burden on the employer.”
In allowing the appeal, the court had regard in particular to the fact that Mr Major, as well as being the managing director, was also the “directing mind and will of this small company”. The drinks which followed the Christmas party were also not impromptu as Mr Major, who had played a significant role in organising and running the party, had paid for taxis to the Hilton where the drinks took place and had continued to pay for drinks on behalf of the company. At the time of the assault business matters had been the sole topic of conversation for around 45 minutes and the assault itself arose as a result of Mr Bellman challenging Mr Major’s managing authority in respect of the wages and working location of another employee. Prior to the assault, Mr Major had lectured his staff, who comprised around 50% of the company’s employees, and their guests regarding his managerial authority to make decisions.
Following an evaluative judgment, the court concluded that there was a sufficient connection between Mr Major’s role and the assault that took place and that at the time of the assault he had been wearing his “managing director’s hat”. As such the company was found to be vicariously liable for his actions.
26. It follows that I disagree with the Judge’s overall conclusions about the context and circumstances of the assault and their significance in relation to whether there was sufficient connection between Mr Major’s field of activities and the assault: see the judgment at . I agree with him that the unscheduled drinking session was not a seamless extension of the Christmas party: see the judgment at  – . The venue had changed, there was a temporal gap between party and drinks, albeit relatively short, and attendance at the drinking session was voluntary. However, it seems to me that the drinking session must be seen against the background or in the context of the evening’s events. It was not just an impromptu drinks party between work colleagues which might happen on any night of the week after work. The drinks occurred on the same evening as the work event which had been paid for and orchestrated by Mr Major on behalf of NR. Mr Major had already been fulfilling his managerial duties for a large part of the evening. Having orchestrated the party, he organised and paid for the taxis to the hotel and continued to provide drinks which were to be paid for by NR. Viewed objectively in that context, although the party and the drinking session was not a single seamless event and attendance was voluntary, it seems to me that Mr Major was not merely a fellow reveller. He was present as managing director of NR, a relatively small company, and misused that position, discussion having been focused on business matters for between 45 minutes and an hour before his managerial decision making was challenged.
27. Even if Mr Major had taken off his managerial hat when he first arrived at the hotel, it seems to me that he chose to don it once more and to re-engage his wide remit as managing director and to misuse his position when his managerial decisions were challenged. He purported to exercise control over his staff by “summon[ing]” them and expounding the extent and scope of his authority. In the light of the breadth of his field of activities, NR’s round the clock business and Mr Major’s authority to do things “his way”, it seems to me that NR’s employees who took part in the drinking session can have been in no doubt at that stage, that Mr Major was purporting to exercise managerial control over them. Given the context in which the drinks occurred, it seems to me that the nature of the interchange outside and inside the hotel lobby was naturally an assertion or a re-assertion of that managerial role. There is no suggestion in the judgment, nor were any submissions made to us to the effect that Mr Major’s behaviour arose as a result of something personal. He delivered a lecture about his managerial authority in relation to NR as a whole, as a result of a challenge to that authority.
28. The facts as found are a very long way from the example given by the Judge of a social round of golf between colleagues during which conversation turns to work: see judgment at . The Judge’s example is based on a different premise. All participants are equal and attend as casual friends and golfers. One can readily see that in such circumstances, even if discussions turn to work and a golfer who happens to be a more senior employee assaults another golfer who is a junior colleague, looked at objectively, they have all attended qua social golfers. The participants in the drinking session on the other hand, had attended the Christmas party qua staff and managing director. As I have already mentioned, just because the drinking session was unscheduled and voluntary, I do not consider that their roles changed or if they did, that on the facts of this case, the role of managing director was not re-engaged.”
The full case report can be found HERE