Supreme Court: Morrisons Successfully Appeal Vicarious Liability For Data Theft By Employee

WM Morrisons Supermarket plc v Various Claimants [2020] UKSC 12

The Supreme Court has overturned the Court of Appeal decision in WM Morrisons Supermarkets plc v Various Claimants. In considering the application of the 'close connection' limb of the two-stage test for establishing vicarious liability, the Supreme Court held that employers will not be liable for an employee's wrongful act where that act is not engaged in furthering the employer's business, and is an effort to deliberately harm the employer as part of a vendetta.

The Supreme Court was asked to rule on two issues:

Whether the Data Protection Act 1998 ('the DPA') excludes the application of vicarious liability to a breach of that Act, or for misuse of private information or breach of confidence Whether the Court of Appeal erred in concluding that the disclosure of data by Morrisons' employee occurred in the course of his employment, for which the appellant should be held vicariously liable Our cyber team have commented on the implications of the Supreme Court commentary regarding the imposition of vicarious liability for a breach of the Data Protection Act, and their insight can be found here.

Our employment team have also discussed what this decision means for employers here.

Ulimately, from a casualty perspective, this decision on the second question will have a significant impact on the application of the two-stage test for vicarious liability, specifically the need for a 'sufficient connection between the employee's position and the tort'.'

In overturning the decision of the Court of Appeal on the question of vicarious liability, the Supreme Court held that the test of vicarious liability is limited to circumstances where the actions of the employee were carried out in pursuing the business of the employer, and were not in an effort to deliberately harm the employer. These actions, such as those carried out by the tortfeasor in this case, did not occur 'in the ordinary course of employment'. Therefore, there was no sufficiently close connection between Mr Skelton's position and the tort, even though his position allowed him the opportunity to commit the wrongful act..

Lord Reed also addressed the judgment of Lord Toulson in Mohamud in which he stated that the tortfeasor's "motive is irrelevant". This would have seemed to contradict the finding of the Court in Morrisons, in requiring the tortfeasor to be furthering the business of the employer when conducting the wrongful...