Vicarious Liability: How to protect your business

November 13, 2017

SMEs will often outsource work to subcontractors to get certain tasks done more efficiently. But what happens when something goes wrong, and whose responsibility is it if it does?

Tim discusses the difficult issue of vicarious liability and how to protect your business from being liable for other’s mistakes!

By Tim Frear

Recently there’s been some interesting news from the High Court in regards to vicarious liability. They have ruled in favour of Barclays Bank Employees against Barclays Bank for the actions of a doctor, Dr Bates, who they appointed as an independent contractor to undertake pre-employment examinations.

In 2013, the police received numerous complaints of sexual assault from women he had conducted medicals on. The police felt there was enough evidence to prosecute, but as Dr Bates had passed away and 126 claimants were from Barclays Bank, could Barclays have vicarious liability?

The bank required candidates to have a medical examination with Dr Bates with no choice of a different doctor, arranged the appointments and paid the fees, in return for him to provide the reports on Barclay’s headed paper. Considering all this, Barclays very well could have had vicarious liability.

The claimants won the case because the offers of employment were conditional upon the examinations and therefore it was the bank rather than the individuals who benefited from Dr Bates’ work. The candidate did not benefit in any way for having the medical and there were no alternative practitioners offered, thus the candidates were under the control of Barclays Bank.

This ruling opens up what we as a small business have to be aware of. When we sub contract out certain parts of our work what due diligence have we done to protect ourselves? Does your business insurance protect you for vicarious liability and what would be the cost to you in terms of your reputation if you have not done your due diligence?

As an employer we must be able to demonstrate that we have taken reasonable precautions to prevent certain behaviour from happening or taken reasonable steps to prevent anything that’s not in line with your written guidelines; and have demonstrated a commitment to having a workplace free from discrimination and harassment.

For more information on this case see: Various claimant’s v Barclays Bank Plc [2017] EWHC 1929 or give us a call at HR180 on 0113 287 8150.

Leeds based HR180 is a team of superheroes in HR Outsourcing, Projects and Consultancy committed to work in partnership with organisations of all sizes to establish working policies to go above and beyond Employment Law requirements, to protect both employees and employers alike. We love to hear from you, so call us on 0113 287 8150 or hit the Rescue Me button.

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