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Majrowski (Respondent) v. Guy's and St. Thomas' NHS Trust (Appellants)
LORD NICHOLLS OF BIRKENHEAD
1. The Protection from Harassment Act 1997 ('the 1997 Act') prohibits harassment. A person must not pursue a course of conduct which amounts to harassment of another. A breach of this prohibition may be the subject, amongst other matters, of a claim for damages. The question raised by this appeal is whether an employer is vicariously liable for harassment committed by an employee in the course of his employment.
2. The harassment in this case concerns two employees of Guy's and St Thomas's NHS Trust ('the Trust'). In November 1998 the Trust employed William Majrowski as a clinical auditor co-ordinator. His departmental manager was Mrs Sandra Freeman. Mr Majrowski was not happy with the way she treated him. He claimed she bullied and intimidated him. She was, he said, rude and abusive to him in front of other staff. She was excessively critical of his time-keeping and work. She imposed unrealistic performance targets for him and threatened him with disciplinary action if he failed to meet them. She isolated him by refusing to talk to him. This treatment, he said, was fuelled by homophobia: he is a gay man.
3. On 20 April 1998 Mr Majrowski made a formal complaint of harassment against Mrs Freeman. The Trust investigated this in accordance with its anti-harassment policy. The investigation resulted in a finding that harassment had occurred. Subsequently, on 7 June 1999 the Trust dismissed Mr Majrowski for reasons unrelated to the circumstances of this case.
4. Nearly four years later, on 13 February 2003 Mr Majrowski commenced these proceedings against the Trust. He claimed damages pursuant to section 3 of the 1997 Act for distress and anxiety and consequential losses caused by the harassment he suffered while employed by the Trust. Mrs Freeman, he said, was at all times acting in the course of her employment by the Trust. He made no claim against Mrs Freeman herself. Nor did he make any claim against the Trust for negligence or breach of his contract of employment. His claim was based exclusively on the Trust's vicarious liability for Mrs Freeman's alleged breach of the statutory prohibition of harassment.
5. The proceedings were struck out summarily by Judge Collins CBE sitting at the Central London County Court on 24 February 2004. He held that the 1997 Act was not designed to create another level of liability in employment law. Employees are already adequately protected by the common law.
6. Mr Majrowski appealed. The appeal was heard by the Court of Appeal, comprising Auld, May and Scott Baker LJJ. On 16 March 2005, by a majority of two to one, Scott Baker LJ dissenting in part, the Court of Appeal allowed the appeal. The case should be permitted to go to trial. The court would then have to determine whether Mrs Freeman did harass Mr Majrowski within the meaning of the 1997 Act in the ways he alleged. The Trust has now appealed to your Lordships' House.
Vicarious liability and statutory obligations
7. Vicarious liability is a common law principle of strict, no-fault liability. Under this principle a blameless employer is liable for a wrong committed by his employee while the latter is about his employer's business. The time-honoured phrase is 'while acting in the course of his employment'. It is thus a form of secondary liability. The primary liability is that of the employee who committed the wrong. (To a limited extent vicarious liability may also exist outside the employment relationship, for instance, in some cases of agency. For present purposes these other instances can be put aside.)
8. This principle of vicarious liability is at odds with the general approach of the common law. Normally common law wrongs, or torts, comprise particular types of conduct regarded by the common law as blameworthy. In respect of these wrongs the common law imposes liability on the wrongdoer himself. The general approach is that a person is liable only for his own acts.
9. Whatever its historical origin, this common law principle of strict liability for another person's wrongs finds its rationale today in a combination of policy factors. They are summarised in Professor Fleming's Law of Torts, 9th ed, (1998) pages 409-410. Stated shortly, these factors are that all forms of economic activity carry a risk of harm to others, and fairness requires that those responsible for such activities should be liable to persons suffering loss from wrongs committed in the conduct of the enterprise. This is 'fair', because it means injured persons can look for recompense to a source better placed financially than individual wrongdoing employees. It means also that the financial loss arising from the wrongs can be spread more widely, by liability insurance and higher prices. In addition, and importantly, imposing strict liability on employers encourages them to maintain standards of 'good practice' by their employees. For these reasons employers are to be held liable for wrongs committed by their employees in the course of their employment.
10. With these policy considerations in mind, it is difficult to see a coherent basis for confining the common law principle of vicarious liability to common law wrongs. The rationale underlying the principle holds good for equitable wrongs. The rationale also holds good for a wrong comprising a breach of a statutory duty or prohibition which gives rise to civil liability, provided always the statute does not expressly or impliedly indicate otherwise. A precondition of vicarious liability is that the wrong must be committed by an employee in the course of his employment. A wrong is committed in the course of employment only if the conduct is so closely connected with acts the employee is authorised to do that, for the purposes of the liability of the employer to third parties, the wrongful conduct may fairly and properly be regarded as done by the employee while acting in the course of his employment: see Lister v Hesley Hall Ltd  1 AC 215, 245, para 69, per Lord Millett, and Dubai Aluminium Co Ltd v Salaam  UKHL 48,  2 AC 366, 377, para 23. If this prerequisite is satisfied the policy reasons underlying the common law principle are as much applicable to equitable wrongs and breaches of statutory obligations as they are to common law torts.
11. This approach accords with the trend of judicial decisions and observations and also academic writings. In Dubai Aluminium Co Ltd v Salaam  UKHL 48,  2 AC 366, your Lordships' House applied the principle of vicarious liability to an equitable wrong. In the shot-firing case of Harrison v National Coal Board  AC 639, 671, Lord MacDermott observed:
In the following year Lord Guthrie, sitting in the Court of Session, followed this observation when deciding the shot-firing case of Nicol v National Coal Board (1952) 102 LJ 357. In the further shot-firing case of National Coal Board v England  AC 403, 422, Lord Oaksey expressed approval of Lord Guthrie's decision:
In Canada Craig JA expressed a similar view in the British Columbia Court of Appeal in Re Nelson and Byron Price & Associates Ltd (1981) 122 DLR (3d) 340, 347. So did Professor Atiyah in his well-known book Vicarious Liability in the Law of Torts (1967), at pages 280-284. Like opinions are expressed in Fleming, Law of Torts, 9th ed, (1998), page 567, and Clerk and Lindsell on Torts, 18th ed, (2000), para 5-47, and see also 19th edition (2006) para 6-51.
12. The sole reported exception to this trend appears to be the decision of the High Court of Australia in Darling Island Stevedoring & Lighterage Co Ltd v Long (1957) 97 CLR 36. In that case a regulation, regulation 31, prescribed precautions which should be observed before loading or unloading a ship. In default a penalty was imposed on the person in charge. The High Court held the employer of the person in charge was not liable for the latter's breach of the regulations.
13. Their Honours did not speak with one voice. There are two principal strands in their reasoning. Neither assists on the broad issue before your Lordships' House. The first strand concerned the interpretation of regulation 31. The regulation imposed liability on the person in charge. To impose vicarious liability on his employer would give the regulation an operation not justified by its provisions.
14. The second strand of reasoning was more general. The principle of vicarious liability imposes upon an employer liability for his employee's acts, not his wrongs. Vicarious liability exists not because the employee is liable but because of what the employee has done. Regulation 31 imposed no duty on the employer. The duty was imposed solely on the person in charge. So imputing his acts to the employer did not give rise to a claim against the employer.
15. In times past this 'employer's tort' analysis of vicarious liability had respectable support in England. But since then your Lordships' House has firmly discarded this basis in favour of the 'employee's tort' approach. An employer's liability is not confined to responsibility for acts done by an employee in the course of his employment. An employer's liability goes further. He is liable for the wrongs of his employee committed in the course of employment. Reasons of policy so dictate. The employee's wrong is imputed to the employer: see Staveley Iron and Chemical Co Ltd v Jones  AC 627 and Imperial Chemical Industries Ltd v Shatwell  AC 656. This approach has received wide academic support: Fleming Law of Torts, 9th ed, (1998), page 412, Clerk and Lindsell on Torts, 19th edition (2006) para 6-50, Markesinis and Deakin's Tort Law, 5th ed, (2003), page 582, Salmond and Heuston, Law of Torts, 21st ed, (1996), pages 431-433, and Munkman on Employer's Liability, 13th ed, (2001), page 114. In this country this approach is now settled law. It seems likely this is also the law in Australia: see Hollis v Vabu Pty Ltd (2001) 207 CLR 21, para 34-35.
16. One further general question should be noted on the interpretation of statutory provisions in this context. The question can be framed this way. Does employers' vicarious liability arise unless the statutory provision expressly or impliedly excludes such liability? Or does employers' liability arise only if the statutory provision expressly or impliedly envisages such liability may arise? As already indicated, I prefer the first alternative. It is more consistent with the general rule that employers are liable for wrongs committed by employees in the course of their employment. The general rule should apply in respect of wrongs having a statutory source unless the statute displaces the ordinary rule. This accords with the approach adopted by Lord Oaksey in the passage cited above from National Coal Board v England  AC 403, 422.
17. Accordingly on this point I agree with the Court of Appeal. Unless the statute expressly or impliedly indicates otherwise, the principle of vicarious liability is applicable where an employee commits a breach of a statutory obligation sounding in damages while acting in the course of his employment.
The 1997 Act
18. I turn to the material provisions of the 1997 Act. The purpose of this statute is to protect victims of harassment, whatever form the harassment takes, wherever it occurs and whatever its motivation. The Act seeks to provide protection against stalkers, racial abusers, disruptive neighbours, bullying at work and so forth. Section 1 prohibits harassment in these terms:
Certain courses of conduct are excepted: where the course was pursued for the purpose of preventing or detecting crime, or was pursued under any enactment or rule of law, or where in the circumstances it was reasonable to pursue the course of conduct: section 1(3). Harassment is not defined in the Act, but it includes causing anxiety or distress. A course of conduct means conduct on at least two occasions: section 7(2), (3). Harassment may be of more than one person.
19. This statutory prohibition applies as much between an employer and an employee as it does between any other two persons. Further, it is now tolerably clear that, although the victim must be an individual, the perpetrator may be a corporate body.
20. Section 2 creates the criminal offence of harassment. The offence comprises pursuit of a course of conduct in breach of section 1. Criminal proceedings can deal only with offences which have been committed. Section 3 goes further. Section 3 affords victims a civil remedy in respect both of actual breaches of section 1 and also threatened breaches. For instance, a single act of harassment may have occurred, not in itself a course of conduct, and the victim may fear repetition. Section 3 provides:
Subsequent provisions in the section make plain that the court may grant an injunction for the purpose of restraining a defendant from pursuing any conduct which amounts to harassment. Breach, without reasonable excuse, of such an injunction is itself a criminal offence: subsection (6).
21. The Trust, relying on the permissive 'may' in section 3(2), submitted that an award of damages under this section is discretionary. A claimant is not entitled to damages as of right. Hence, it was said, harassment cannot be equated with a common law tort.
22. I do not agree. The effect of section 3(1) is to render a breach of section 1 a wrong giving rise to the ordinary remedies the law provides for civil wrongs. This includes an entitlement to damages for any loss or damage sustained by a victim by reason of the wrong. Ordinary principles of causation and mitigation and the like apply. Subsection (2) is consistent with this understanding of the section. The phrase 'among other things' assumes that damages are recoverable. The enabling language ('may be awarded') is apt simply to extend or clarify the heads of damage or loss for which damages are recoverable.
Vicarious liability and harassment
23. Against that legislative background I turn to the Trust's case. The principal thrust of the Trust's submissions is that the 1997 Act was primarily a legislative response to the public order problem of stalking. The Act was not aimed at the workplace. It is a public order provision designed to punish perpetrators for the anxiety and upset they cause to victims, not blameless employers who happen to be solvent and available as a target for litigation. Vicarious liability would have consequences for employers which Parliament cannot have intended. Vicarious liability would mean that a blameless employer would be liable in damages in respect of a cause of action wherein damages are recoverable for anxiety short of personal injury, foreseeability of damage is not an essential ingredient, and the limitation period is six years and not the usual period applicable to personal injury claims. The deterrent effect of ordering the perpetrator to pay compensation would be undermined by drawing litigation away from the very person guilty of the offence. Vicarious liability would increase very considerably the volume of claims based on stress, anxiety or other emotional problems at work. The courts would be unable to strike out unmeritorious claims. The burden on employers, insurers and the administration of justice would be wholly unjustified.
24. I am not persuaded by these arguments. Neither the terms nor the practical effect of this legislation indicate that Parliament intended to exclude the ordinary principle of vicarious liability.
25. As to the terms of the legislation, by section 3 Parliament created a new cause of action, a new civil wrong. Damages are one of the remedies for this wrong, although they are not the primary remedy. Parliament has spelled out some particular features of this new wrong: anxiety is a head of damage, the limitation period is six years, and so on. These features do not in themselves indicate an intention to exclude vicarious liability. Vicarious liability arises only if the new wrong is committed by an employee in the course of his employment, as already described. The acts of the employee must meet the 'close connection' test. If an employee's acts of harassment meet this test, I am at a loss to see why these particular features of this newly created wrong should be thought to place this wrong in a special category in which an employer is exempt from vicarious liability. It is true that this new wrong usually comprises conduct of an intensely personal character between two individuals. But this feature may also be present with other wrongs which attract vicarious liability, such as assault.