Supreme Court Confirms Employers' Duty Of Care To Employees Does Not Extend To The Conduct Of Litigation

The Supreme Court has 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 [2018] UKSC 40.

The court considered that to recognise such a duty would amount to an extension of employers' previously recognised duties. It unanimously concluded that it would not be "fair, just and reasonable" to impose it - either as a standard implied term in employment contracts or as a concurrent tortious duty.

In particular, given that the interests of an employer and employee in such circumstances will often be in direct conflict, the court considered that to impose such a duty 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. Notably, the decision is not limited to rejecting a particular formulation of the proposed duty but appears to be a wholesale rejection of any suggestion that an employer's general duty to its employees restricts it in any way from defending such proceedings in whatever manner it thinks best to serve its own interests.

Background

The underlying litigation concerned an allegation by a terrorist suspect that he had been seriously assaulted in the course of his arrest. He brought a personal injury claim against the Police Commissioner as vicariously liable for the actions of the police officers involved.

During the course of the trial, the Commissioner settled the claim on terms that admitted most of the allegations and included a public apology. The officers were subsequently charged with criminal offences arising out of the arrest but were acquitted. They then commenced proceedings against the Commissioner claiming that both the manner in which the action was defended and the terms on which it was settled had caused them economic, reputational and psychiatric damage.

Amongst several bases relied on, the officers argued that the...