UK: Vicarious liability claims - employers may owe duty of care to employees in the conduct of the defence

The Court of Appeal has ruled that an employer (or, in this case, a quasi-employer, in the form of a Police Commissioner) being sued for vicarious liability for the actions of its employees may arguably owe a duty of care to those employees, in relation to the conduct of that litigation, not to sacrifice their interests and professional reputation without good reason and reasonable warning.

This duty could impact on the preparation and conduct of the defence, for example, in determining what reasonable steps should be taken to strengthen the defence, and also on the decision to settle the claim. In James-Bowen v Commissioner of Police for the Metropolis the Commissioner had settled a claim for vicarious liability for an assault allegedly carried out by police officers. The Court refused to strike out the claim that the failure to take steps to strengthen the defence, which lead to the settlement of the claim, was a breach of the duty of care to the officers. Their claim to damages for economic loss as a result of the loss of reputation and consequential damage to their careers was allowed to proceed to trial.

However, the Court did reject arguments that there was an implied retainer between the claimants and the Commissioner's lawyers. Assurances given by the lawyers that they were acting in the claimants' interests and would protect them were simply an informal recognition of the parties' shared interest in defeating the claim. Further, on the facts, the Commissioner had not expressly assumed responsibility to protect their interests.

The decision has potentially wide ramifications for all employers facing claims that they are vicariously liable for their employee's wrongdoings.  For further detail, see our Litigation notes post here.