Corporation liable for criminal conduct committed by employee: recent UK decision

In a recent ground-breaking decision the Supreme Court of the United Kingdom has ruled that an employer can be liable for crimes committed by a staff member while at work: Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11. This decision should interest anyone engaged in risk management. It will be of particular interest to purchasers and providers of public liability insurance.

Morrisons is a UK supermarket chain which also operates petrol stations at some locations. In March 2008, Mr Mohamud, a man of Somali descent, parked at a Morrisons petrol station forecourt. He entered the payment kiosk and asked the employee on duty, Mr Khan, whether he could print some documents on a USB stick. Mr Khan refused and Mr Mohamud objected. Mr Khan then embarked on a racist tirade against Mr Mohamud, directing him to leave. Mr Khan left the kiosk, followed Mr Mohamud to his car and physically attacked him, causing injury.

Mr Mohamud sued Morrisons, contending that it was vicariously liable for Mr Khan’s actions. The trial judge dismissed the claim finding that there was an insufficiently close connection between what Mr Khan was employed to do and his conduct in attacking Mr Mohamud for Morrisons to be liable. The Court of Appeal reached the same conclusion. Mr Mohamud appealed to the Supreme Court. He challenged whether the “close connection” test was the correct legal standard. He also contended that his claim should have succeeded even if this was the standard.

The Supreme Court unanimously allowed the appeal (which, incidentally, was conducted by the English Bar Pro Bono Unit). The Supreme Court upheld the “close connection” test as the correct one. The Court outlined how two matters fell to be decided. First, the Court needed to inquire what function or fields of activity had been entrusted to the employee, viewed in a broad way. Next, the Court was required to decide whether there was sufficient connection between the position in which the employee was employed and the wrongful conduct to make it just for the employer to be held legally responsible.

In applying this test, the Court found that it was Mr Khan’s job to attend to customers and respond to their inquiries. The way he responded to the Claimant’s query with verbal abuse was inexcusable, but, that said, interacting with customers was within the field of activities delegated to him by the company. The Court determined that what happened next could be regarded as “an unbroken sequence of events”. The connection between the field of activities assigned to Mr Khan and his employment did not cease at the moment when left the kiosk and followed the Claimant to his car. There were two reasons to come this conclusion, the Court said. First, it is not correct to regard Mr Khan as having metaphorically “taken off his uniform” when he left the kiosk (and surely the absence of clothing, if non-metaphorical, would have been particularly alarming to the victim). Rather, he was following up on what he said to Mr Mohamud. Further, when Mr Khan followed Mr Mohamud to his car and told him not to come back to the petrol station, that was not something personal between them, but an order to keep away from his employer’s premises. In giving the order he was purporting to act about his employer’s business.

Additionally, the Court stated:

Mr Khan’s motive is irrelevant. It looks obvious that he was motivated by personal racism than a desire to benefit his employer’s business, but that is neither here nor there.

In this decision the Supreme Court confirmed the “close connection” test but applied it in what can only be described as a radical way. It would not be unreasonable to argue that in doing what he did, Mr Khan did indeed abandon all connection with what he was supposed to be doing as a dutiful Morrisons employee. Nonetheless, that is not how the United Kingdom’s court of final appeal saw it. Time will tell whether the lesser courts, and courts in other jurisdictions, feel compelled to apply the law in a similar way.

Steve Keall
Barrister
9 March 2016

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