When post-Christmas party drinks go wrong – Could the Company be liable?

Facts

The case involved the assault of a manager (Mr Bellman) by the managing director and shareholder (Mr Major) of the company by which Mr Bellman was employed.

The incident took place following the conclusion of the company’s Christmas party, after which a group of employees took taxis to a hotel bar for more drinks, at least part of which was paid for by the company. In the early hours of the morning, when the topic of conversation returned to work-related matters, a heated debate broke out between Mr Bellman and Mr Major. Mr Major then proceeded to punch Mr Bellman twice, the second blow causing Mr Bellman to hit his head on the floor of the hotel bar, resulting in a fractured skull and injury to the brain.

Mr Bellman (represented by his litigation friend) brought an action for damages against his employer, who he claimed was vicariously liable for the actions of Mr Major.

Decision

His Honour Judge Cotter QC summarised what he deemed to be the relevant principles to assaults committed by employees, for the purpose of establishing vicarious liability, as follows:

1. The vicarious liability of an employer can occur both during and outside of working hours.
2. There are two questions to be considered:
   • What was the nature of the employee’s job (taking a holistic approach to the field of activities entrusted by the employer to the employee); and
   • Taking a broad approach, under the principle of social justice, was there a sufficient connection between the wrongful acts and Mr Major’s position as managing director for the company to be held liable.
3. The decision should involve a fact specific evaluation of the circumstances of the employment and wrongful conduct.
4. Consideration of the time and place in which the wrongdoing (tort) took place may be relevant but not necessarily conclusive.
5. The policy underlying the strict liability should always be kept in mind, ensuring that the action is sufficiently closely connected for it to be just and reasonable for an employer to be liable for its employees’ actions. Such policy is taken from a number of judgements, but includes that:
   • a company will be liable for the actions of an employee when it is assumed that the employee acts under their employer’s authority;
   • a victim of a tort should have access to recourse against a financially responsible defendant (and companies are usually able to obtain insurance for such an occurrence); however this should be balanced with
   • the attempt to force an undue burden upon an employer, especially that which would sit beyond its scope of insurability.

When considering the nature of Mr Major’s job, Judge Cotter QC strongly outlined that Mr Major’s position as managing director of the relatively small company had a wide remit. What Mr Major did on a normal working day was likely to be within this remit and connected (either directly or indirectly) to his position as managing director.

Judge Cotter QC further noted that Mr Major’s role would include oversight of the Christmas party, ensuring it concluded without incident, and that it would have been at Mr Major’s directions that the party was arranged and paid for by the company. This included the bar tab for the drinks, hotel rooms and transport to and from the party venue.

Despite these findings, Judge Cotter QC stated:

“It cannot be right that the effect of such a wide range and duration of duties is that Mr Major could always be considered to be on, or potentially on duty, solely because he was in the company of other employees regardless of circumstances”.

He found that a line could be drawn following the end of the company’s Christmas party and the “impromptu drink” which subsequently occurred and was not attended by all employees, as this was not a “seamless extension” of the company’s Christmas party which had already concluded.

Judge Cotter QC also indicated that a topic of conversation being work-related should not be taken in isolation when considering vicarious liability. He noted that the time and place of the discussion should also be taken into consideration, to ensure consistency with the underlying principle of the tort.

Furthermore, he noted that a significant factor for establishing the proximity of the connection between employment relationship between Mr Major and the company, and the tortious act, was the extent to which Mr Bellman and the other employees at the party were subject to an increased risk of injury. However, he found that, whilst the provision of alcohol by the company at the Christmas party could result in increased aggression, this is customary at almost all Christmas parties. When consumed responsibly, alcohol should not increase the risk of a wrongful act. He further noted that the Christmas party itself finished without incident.

As a result of the above, the Court found that the company was not vicariously liable for the actions of Mr Major. The incident occurred in the early hours of the morning, at a different venue, following a drunken work-related conversation, after the employees’ choice to have more drinks. Thus, there was an insufficient connection between Mr Major’s role as managing director and his assault upon Mr Bellman to make it right for the company to be held vicariously liable for Mr Major’s actions, in accordance with the social policy of the tort.

Comment

Whilst the outcome of the case may provide comfort to employers ahead of the Christmas season for the actions of its employees after their Christmas parties, it should also act as a reminder that there are circumstances in which a company may be liable for the improper behaviour of its employees at work events. Employers should be aware that the risk of such a wrongful act occurring is increasingly likely when alcohol is readily available, such as at Christmas parties and other work-related events.

Furthermore, aggressive acts perpetrated by one employee towards another will give rise to disciplinary action and could result in dismissal for gross misconduct, it being within the range of reasonable responses to dismiss for violent behaviour. Reputational issues are also at stake and, in a company where its reputation is zealously guarded, such actions are likely to be serious or even gross misconduct, even in the absence of violence.

For more information, please contact a member of our Employment team.