Following on from a handful of cases where employers have been held vicariously liable for the unlawful acts of their employees, there has been a noticeable trend in Claimant law firms casting their nets as far as possible when suing medical professionals and providers by pleading vicarious liability.
From a hospital or clinic perspective, no longer did it appear that the independent contractor defence had legs for the entities finding themselves drawn into claims. Conversely, practitioners working on a contractor basis had some comfort that the providers where they were working could ‘step in’ – at least temporarily - to fund payments out to patients.
This looks set to change following the long awaited Supreme Court decision of the appeal in Barclays Bank Plc v Various Claimants on 1 April 2020. The Court was asked to determine whether Barclays Bank were liable for the alleged sexual assaults committed by a GP medical examiner during medical examinations of 126 prospective employees and employees. The Supreme Court have held that the GP – who provided medical reports on documents emblazoned with the Barclays logo and entitled “Barclays Confidential Medical Report” albeit he conducted the consultations at his home address - was an Independent Contractor and as such Barclays Bank were not vicariously liable for his actions.
What will the Courts now look at to determine the question of vicarious liability?
When considering whether vicarious liability applies it is still accepted that there is a 2 stage test:
i. Is the relevant relationship one of employment or “akin to employment”?
ii. If so, was the act sufficient to closely connect with that employment or quasi-employment?
The Courts had previously determined that 5 questions needed to be asked to assist with the question of whether the relationship is “akin to employment”:
i. Is the employer more likely to have the means to compensate the victim, including insurance?
ii. Was the act committed as a result of activity being taken by the employee on behalf of the employer?
iii. Was the employee’s activity part of the business activity of the employer?
iv. Has the employer, by employing the employee to carry out that activity, created the risk of the act being committed by the employee?
v. Was the employee under the control of the employer?
The Supreme Court decision has changed the landscape by stating that in fact those 5 questions do not always need to be asked. Where it is clear that the individual is carrying on their own independent business, vicarious liability will simply not apply. Thus in the Barclays case, where the practitioner held his own PI insurance, was not paid on a retainer, could refuse offers of work, and ultimately considered the Bank a client, it was held that there was no need to complicate matters by applying the 5 step criteria as it was obvious that he was an independent contractor. Only in doubtful cases will the test need to be carried out. The Supreme Court has therefore underlined the distinction between employees and independent contractors, and for now at least, envisages this will continue.
Impact for our clients
Health care providers Many organisations engage the services of Independent Contractors. The Independent Contractor defence will once again be able to be mounted with more confidence than in previous years. Of course, this does not absolve dental corporates, hospitals and the like of their obligations to ensure the facilities, equipment, health and safety protocols, training and staffing are all up to the highest standards, and it is important to remember that each case will be looked at carefully on its own merits to work out what the relationship between provider and practitioner was.
The case offers a salient reminder that contracts and paperwork generally must accurately reflect whatever relationship is agreed, that insurance arrangements – and any associated cross indemnity required - is clearly set out, and that the right individuals are appointed, on whatever basis, to fill the relevant roles: short cuts should never be taken, not least as Claimant can still argue that an organisation is under a non-delegable duty of care.
Independent contractors Many of our consultant and dentist clients operate as independent contractors for a variety of healthcare providers. This decision may cause you to feel more exposed and less supported if claims come in which no longer name the healthcare organisation as a party. You should still approach the governance and legal departments for support as well as your own indemnity provider as the organisation in question will have provider specific knowledge, is also likely to hold all the relevant notes and will not want to see you suffering the stress of handling a claim alone. The decision makes it all the more important that your indemnity is sufficient and you should contact your providers to check the limit – you do not want to be in a position where you have to foot the bill from your own pocket.
Further, it is an opportune moment to reiterate the importance of notifying incidents, complaints and claims immediately to your insurance providers in order to ensure that you are covered and have the right help from the outset.
It also means that if there are practices you are uncomfortable with, colleagues whose practices you are concerned about or any health and safety issues of concern you should raise these with the provider you work with to ensure that they do not negatively impact upon your patients. Always remember that if you do not feel it is safe to proceed – for whatever reason, whether due to concerns around the patient’s expectations from the procedure or regarding the working environment in which you find yourself – you can say no; patient safety and your livelihood are of paramount importance and your providers can only improve things if you speak up.
As ever, we are here to support our clients with any issues that arise and to answer any questions arising from this interesting decision. Please do not hesitate to contact Flora McCabe.