The issue for the Supreme Court was whether the bank could be held vicariously liable for the actions of Dr Bates. The Court of Appeal had found that it could.
Alastair Gillespie, partner at Keoghs, which acted for Barclays in the case, said: ‘Insurers, practitioners and any organisation that engages independent contractors of whatever type, from auditors to window cleaners, will breathe a huge sigh of relief.
‘The independent contractor sits outside the scope of vicarious liability. The position is, in essence, what it had always been understood to be before this litigation began to move through the courts. We have welcome clarity on stage 1 of the test.
‘Should the Court of Appeal judgment have been upheld, it would have created a myriad of problems not least that, in the absence of an independent contractor defence, a “fair, just and reasonable” test would have to be undertaken in every single scenario where there was no formal contract of employment.’
Commenting on the case, CMS lawyers said: ‘The Supreme Court’s acknowledgement that Dr Bates “no doubt carried his own medical liability insurance” sets a helpful precedent to healthcare insurers going forwards who (when opting to decline cover on behalf of companies in respect of the actions of independent contractors) can now refer to the fact that those independent contractors should typically have their own cover in place.
‘Equally, where insurers are providing cover to independent contractors, they will be mindful of the fact that they are likely to be covering the costs of any claims, rather than the insurers of the companies who are employing them on a consultancy basis.’
The judgment was handed down on 01 April, at the same time as another landmark vicarious liability case, WM Morrison Supermarket PLC v Various Claimants [2020] UKSC 12.
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