The Supreme Court recently held that employers sued on the basis of vicarious liability for acts of their employees do not owe those employees a duty to defend the proceedings in a manner that protects the employees’ own economic or reputational interests.
In James-Bowen & Ors v Commissioner of Police of the Metropolis, a terrorist suspect alleged that he had been seriously assaulted in the course of his arrest and brought a personal injury claim against the Police Commissioner for vicariously liability for the police officers’ actions. During the trial the Commissioner settled the claim and as part of the settlement made admissions on most of the allegations and issued a public apology. Following this, the officers were subsequently charged with criminal offences arising out of the arrest but were later acquitted. The officers then claimed against the Commissioner, claiming the manner in which the action was defended, and then settled, caused them economic, reputational and psychiatric damage.
The Supreme Court (overturning the Court of Appeal) held that there was not a duty on the Commissioner to protect the officers’ economic and reputational interests in conducting the litigation. The Court noted that there would be severe conflicting interests between such a duty and the Commissioner’s conduct of her defence, for which she should be entitled to defend claims as she sees fit.
This is an important ruling. While Police Officers are in a “quasi-employment” relationship with the Commissioner, the Court’s reasoning is expressed as applying to employers and employees. In discrimination claims, employers are often sued for acts of their employees (or even potentially contractors, following a recent ruling we blogged on here). The Court has refused to extend the employer’s duty of care to the manner in which it conducts litigation, so employers can continue to defend proceedings in the manner they deem best serve their own interests.