The Supreme Court has overturned the Court of Appeal ruling (discussed here) and held that, where an employer is sued on the basis that it is vicariously liable for the acts of its employees, it does not owe those employees a duty to defend the proceedings in such a way as to protect their economic or reputational interests (James-Bowen & Ors v Commissioner of Police of the Metropolis).
The court unanimously concluded that it would not be “fair, just and reasonable” to extend an employer's implied contractual or tortious duties in this way given that this would potentially stifle an employer’s defence of claims and would require it to “constantly look over its shoulder” for fear of exposing itself to claims by employees that the defence should have been run differently.
The decision provides welcome reassurance for any employer (or quasi-employer, as in this case) facing claims based on the alleged wrongdoing of its employees, particularly where fraud or other serious wrongdoing is alleged and there is potential for the employees to face public criticism. See our litigation blog post for further details.
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Steve Bell
Managing Partner - Employment, Industrial Relations and Safety (Australia, Asia), Melbourne
Emma Rohsler
Regional Head of Practice (EMEA) - Employment Pensions and Incentives, Paris
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