April 28, 2016
Decision by the UK Supreme Court given on 2 March 2016 on an employer’s vicarious liability in tort for an assault carried out by an employee.
The UK Supreme Court (UKSC) has confirmed that the close connection test remains the applicable test when determining vicarious liability in tort. Applying the close connection test, the court found a supermarket operator vicariously liable for the assault committed by an employee on a customer, despite the fact that the employee in carrying out the assault had disregarded the supervisor’s instructions to stop. Given that the Singapore Court of Appeal has previously held that the imposition of vicarious liability may not be justified where the employee’s conduct was uncontrollable and the employer had done all that was reasonable to deter the tort, it remains to be seen whether the Singapore courts would follow the UKSC’s decision in a similar fact situation.
- The claimant was a customer at the respondent company’s premises which included a petrol station and a kiosk where customers paid for their purchases.
- On the day of the incident, the respondent’s employee was behind the kiosk counter and his job was to ensure that the petrol pumps and the kiosk were kept in good running order and to serve customers.
- After parking his car at the petrol station, the claimant entered the kiosk and inquired whether it would be possible to print some documents from a USB stick which he was carrying.
- The respondent’s employee responded rudely. When the claimant protested at the manner in which the employee had spoken to him, the employee used foul, racist and threatening language to order the claimant to leave.
- Even after the claimant walked out of the kiosk and returned to his car, the respondent’s employee followed him. When the claimant got into his car, the employee opened the front passenger door and told him in threatening words never to come back. As the claimant told the employee to get out of the car and close the passenger door, the employee punched the claimant. When the claimant got out of the car to close the passenger door, the employee again punched him in the head, knocked him to the floor and subjected him to a serious assault involving punches and kicks while the claimant lay curled up on the floor trying to protect his head from the blows.
- While carrying out the assault, the employee ignored instructions from his supervisor who had tried to stop him.
- The trial judge concluded that the respondent company was not vicariously liable for the employee’s unprovoked assault as the close connection test was not satisfied. While the employee’s job entailed some interaction with customers, it involved nothing more than serving and helping them. The trial judge also singled out the fact that the employee had made a positive decision to exit from behind the counter and follow the claimant out of the kiosk in contravention of instructions given to him.
- The Court of Appeal upheld the trial judge’s decision that the close connection test was not satisfied. The Court of Appeal was similarly of the view that the fact that the employee’s job involved interaction with customers did not provide the degree of connection between his employment and the assault which was necessary for the test to be satisfied and for the respondent company to the held vicariously liable. This is because such a scope of duties did not involve a clear possibility of confrontation nor did it place the employee in a situation where an assault was likely.
Before the UKSC, the claimant argued that the time had come for a new test of vicarious liability. Instead of the close connection test, the courts should apply a broader test of “representative capacity”. Under this test, an employer would be vicariously liable for the tort of an employee if a reasonable observer would consider the employee to be acting in the capacity of a representative of the employer at the time of committing the tort.
In its decision which traced the origins and development of the doctrine of vicarious liability, the court noted that the close connection test was imprecise, but the imprecision was inevitable given the infinite range of circumstances where the issue of vicarious liability arose. The close connection test was firmly rooted in justice and it was difficult to see how it could be further refined. On the other hand, the “representative capacity” test was “hopelessly vague” and “far from being demonstrably better” than the close connection test. Therefore, the close connection test remained the applicable test until a better test could be devised.
Under the close connection test, the court considered the following two issues:
- What functions or field of activities had been entrusted by the employer to the employee – in other words, what was the nature of his job; and
- Whether there was a sufficient connection between the position in which the employee was employed and his wrongful conduct to make it right for the employer to be held liable under principles of social justice.
Applying that test and overturning the decision below, the UKSC held that since it was the employee’s job to attend to customers and to respond to their inquiries, the rude manner in which he responded to the claimant, though inexcusable, was “within the ‘field of activities’ assigned to him”. Delivering the lead judgment, Lord Toulson noted that the cases in which the necessary connection had been found were cases in which the employee had used or misused the position entrusted to him in a way which injured the third party.
Describing what happened as “an unbroken sequence of events”, Lord Toulson disagreed that any significant connection ceased when the employee exited from behind the counter for the following two reasons:
- It was not right to regard the employee as having metaphorically taken off his uniform the moment he stepped from behind the counter since it was a seamless episode of him following up on what he had said to the claimant.
- By threatening the claimant never to come back to the petrol station, the employee was ordering the claimant to keep away from his employer’s premises. In doing so, he was purporting to act about his employer’s business, which though a gross abuse of his position, was in connection with the business in which he was employed to serve customers.
As demonstrated by the opposing decisions reached by the UKSC and the courts below, whether there is a sufficient connection between the employee’s field of activities and his wrongful conduct to satisfy the close connection test can be very subjective. Indeed, the test has been criticised for resulting in inconsistent or irreconcilable decisions, with observers commenting that many decisions are in reality based on the court’s perception of what justice requires.
In Singapore, the Court of Appeal has confirmed the applicability of the close connection test in its seminal decision of Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd  SGCA 22 (Skandinaviska). However, in Skandinaviska, the Court of Appeal made clear that apart from close connection, there was also a need to consider the policy considerations of victim compensation and deterrence.
With regard to deterrence, (then) Chief Justice Chan Sek Keong explained that the policy consideration “rests on the fundamental premise that the employer is best placed, relative to everybody else, to manage the risks of his business enterprise and prevent wrongdoing from occurring.” Hence, where an employee’s tort is “uncontrollable and, therefore, not amenable to deterrence”, CJ Chan opined: “In such situation, it may well be possible to find that the employer has done all that is reasonable to deter the tort and yet has failed to prevent the commission of the tort. In such situations, deterrence as a justification for imposing vicarious liability loses much of its force.”
In addition, the Court of Appeal introduced a new factor of foreseeability on the part of the employer in respect of the employee’s tort. In Skandinaviska, one of the reasons why the court held that the employer was not vicariously liable for the employee’s conduct in obtaining credit facilities from several banks through false pretences and forged board resolutions was that the employer could not have reasonably contemplated that the employee might defraud a third party which he had no authority to deal with as finance manager; in other words, the employee’s fraud was “entirely unforeseeable”.
In Mohamud v Morrison, the employee had ignored instructions from his supervisor who had attempted to stop him from continuing the assault. Accordingly, it would appear that a Singapore Court may well have taken the view that “the employer has done all that is reasonable to deter the tort and yet has failed to prevent the commission of the tort” which was “entirely unforeseeable”. This, coupled with the pro-employer stance often adopted by the Singapore Courts, suggests that in the event of a spur-of-the-moment assault by an employee on an innocent customer in Singapore despite being instructed not to do so by a supervisor, an employer may not be held vicariously liable. Whether this will indeed be the case in light of the UKSC’s latest decision in Mohamud v Morrison remains to be seen.