COMMON lawyers tend not to learn much about a legal rule from the bog-standard situations falling comfortably within it. Instead our understanding is driven by unusual, extreme situations hovering around its edge, because only with a clearly defined edge can we be sure what forms the core of the rule. So it is for vicarious liability, which is being shaped and defined by cases involving child abuse, miles away from its bread and butter function of making commercial employers pay for the negligence of their regular employees. Vicarious liability requires two elements: first, that the relationship between defendant and tortfeasor is one that attracts vicarious liability, traditionally that of employer and employee; and secondly, that the tort was committed in the course of that employment. The second element was reworked by the House of Lords in Lister v Hesley Hall Ltd. [2002] 1 A.C. 215, a case of child abuse by a schoolmaster, into terms more appropriate to the factual context, that the tortfeasor's tort must be “so closely connected with his employment that it would be fair and just to hold the employers vicariously liable” (per Lord Steyn) and this test has been refined in subsequent cases involving allegations of sexual abuse against Roman Catholic priests. Now the first element has been scrutinised in the same context, in JGE v Trustees of the Portsmouth Roman Catholic Diocesan Trust [2012] EWCA Civ 938.

In 1970, when the claimant was six years old, she was placed for two years in a Roman Catholic children's home. During this period, she alleges that Father Baldwin, the parish priest for the parish in which the children's home was situated and thus where she was a parishioner, systematically sexually abused and assaulted her, “including on the day of her first holy communion when Father Baldwin raped the claimant in the robing room at the church after conducting the service.” She wished to hold the Roman Catholic Church vicariously liable for Father Baldwin's torts, but the Church itself is an abstract body with no legal personality, as is the local Diocese. It was agreed that the trustees of the local Diocesan Trust be named as nominal defendants, since they had recognisable legal status, managed the diocesan property, conducted its financial affairs and, more to the point, held liability insurance, but in effect the real defendant was the Diocesan Bishop.

In previous vicarious liability cases involving assaults by Catholic priests, the Church conceded the first element required for vicarious liability (that priests could be regarded as its employees) and focused its defence on the second, but in JGE the defendant denied that its relationship with Father Baldwin could attract vicarious liability at all. (It also disputed many of the claimant's factual allegations, including whether Father Baldwin was ever the claimant's parish priest.) The first element was therefore ordered to be tried as a preliminary issue, although all members of the Court of Appeal were unhappy with this, partly because of the extent of the disputed facts but also because they regarded it as artificial to separate the two elements. As Ward L.J. said, “the nature of the relationship between the bishop and the priest must have some effect on the ambit of the acts which are within the scope of that relationship.”

MacDuff J. at first instance held that Father Baldwin was not the defendant's employee, but was a holder of ecclesiastical office governed by canon law. He stressed that, unlike a standard employment contract, there were no terms and conditions and no management structure; the defendant could not control a priest once appointed or strip him of his priesthood; and a priest was not paid a wage by the defendant but lived entirely on offerings from parishioners. This conclusion was accepted by the claimant in the Court of Appeal, so Ward L.J. merely reviewed the relevant caselaw briefly before agreeing, offering the additional reason that a priest's appointment was made without any intention to create civil (as opposed to canon) legal relations. However, of more significance, and hotly contested by the defendant in the Court of Appeal, was MacDuff J.'s further conclusion that the relationship between the defendant and the priest made it sufficiently akin to employment for vicarious liability to attach. By a majority (Tomlinson L.J. dissenting), the Court of Appeal agreed.

Ward L.J. reviewed the numerous policy arguments supporting vicarious liability, concluding that none of them applied exclusively to the employment relationship, and also noted the significance of Viasystems (Tyneside) v Thermal Transfer (Northern) Ltd [2006] Q.B. 510 which held, for the first time, that two defendants bore vicarious liability for the same tortfeasor whose services had been “loaned” from one to the other. “The actual contract of employment was treated as no more than an irrelevant distraction. Function triumphed over form.” These considerations allowed the court in JGE to extend the law and recognise that vicarious liability should apply to relationships sufficiently akin to employment – in other words, where “the tortfeasor bears a sufficiently close resemblance and affinity in character to a true employee that justice and fairness to both victim and defendant to drive the court to extend vicarious liability to cover his wrongdoing.” On the facts, the relationship between Father Baldwin and the defendant was indeed sufficiently akin to an employment relationship – a priest is accountable to his bishop and ultimately subject to the bishop's sanction, including removal from his parish, if not day to day control (much like a skilled professional employee); he is required to reside in a parish house and is fully integrated into the organisation of the Church, pursuing its fundamental aims and objectives on its behalf.

So the Court of Appeal took the traditional tests for employment status as their starting point (control, whether the worker is integrated into the business or in business on his own account etc.) and extended vicarious liability to a closely analogous relationship. But, as Ward L.J. recognised, the vast majority of cases dealing with the test for employment status do not involve tort or vicarious liability at all, but instead concern the worker's status for other reasons like employment rights, tax and national insurance obligations, social security or health and safety legislation. And the issue “is always coloured by the context in which the question of the [worker's] work status has arisen” (Mummery P. in Buchan v Secretary of State for Employment [1997] I.R.L.R. 80). These contexts involve statutory wording and the pursuit of particular statutory aims, very different from those in vicarious liability. For example the way the worker is paid – whether he sends out his own invoices or is paid a regular wage – is clearly important for tax purposes but is of very little relevance to whether the employer should be vicariously liable. Likewise the parties' own choice of status may be conclusive in some contexts, but irrelevant where vicarious liability and the protection of third parties is concerned. For example, in Massey v Crown Life Insurance Co [1978] 2 All E.R. 576 an insurance manager was employed on a standard employment contract, but decided that he wished to be treated as self-employed for tax reasons; his employer agreed and they executed a new contract. He was later dismissed and sought to claim statutory compensation for unfair dismissal, only available to an employee not an independent contractor, but the Court of Appeal held he could not: “Having made his bed as being self-employed, he must lie on it.” Yet the policy considerations, and the result, would surely have been wholly different if, for example, Mr Massey had given negligent insurance advice to a client of the employer and that client wished to hold the employer vicariously liable.

Perhaps therefore, brandishing Occam's razor, the logical next step forward is to focus on the substantive characteristics of a relationship which justify and attract vicarious liability, excising the need to ask whether there is a contract of employment or something akin to it. And this might have implications of substance, not just elegance. It is supposed to be trite law that employers are not vicariously liable for the torts of their independent contractors. Yet if Mr Massey would be regarded as an independent contractor for almost all purposes apart from the imposition of vicarious liability on his employer, what price the employee/independent contractor distinction and the trite rule? Other non-contractual situations can be imagined, like the parent who sends her teenage son on an important errand for her by bicycle; out of mum's eyeshot, the teenager turns up the volume on his iPod and cycles obliviously into the road, causing a motorist to swerve and suffer injury. JGE is a tentative, but hugely significant, step towards a test for vicarious liability focused on specifically tortious policies and principles. The Court of Appeal refused leave to appeal to the Supreme Court, but only because “the Supreme Court may prefer to wait till they have a case fought out on all factual issues with a judgment at the conclusion of a fully contested trial.” Let us hope the Supreme Court takes the bait.