The risks and penalties of money laundering for charities and how to guard against it
On 10 September 2007, a prisoner working in the kitchens of HM Prison Swansea negligently dropped a sack of rice onto the back of Mrs Cox, causing her injury. On 15 March 2008, in a totally unrelated incident, a Morrisons petrol station employee carried out a brutal and seemingly racially motivated attack on Mr Muhammed in response to a request to print some documents from a memory stick. On 12 October 2015, five justices of the Supreme Court heard submissions relating to both incidents and, five months later, gave complementary judgements clarifying the apparently inevitably imprecise law of vicarious liability.
Vicarious liability in tort requires two things. The first is a sufficiently close relationship between the defendant and the tortfeasor. The second is a connection between that relationship and the tort which makes it just that the defendant should be vicariously liable for it.
The question in Cox v Ministry of Justice was that of the sufficiently close relationship, an example of which is that of employee and employer. In this case, the tortfeasor was not an employee of the Prison, but was instead required under the Prison Rules 1999 to work six days a week in the Prison kitchen preparing meals for the prisoners; a compulsory rather than a voluntary arrangement.
In his leading judgement, Lord Reed found that the necessary relationship is established where a wrong is committed by an individual in the context of activities carried out as “an integral part of the business activities carried on by a defendant and for its benefit” and where “the commission of the wrongful act is a risk created by the defendant by assigning those activities to the individual in question.” In relation to the prisoner in question, he was integrated into the operation of the prison and the activity of providing meals for prisoners. The prison service placed him in a position where there was a risk that he might commit “a variety of negligent acts”, and was thereby vicariously liable for Mrs Cox’s back injury.
Following on from this is the case of Mohamud v WM Morrison Supermarkets plc. Mr Mohamud’s representatives argued not only that Morrisons should be vicariously liable for the conduct of Mr Khan, the Morrisons employee who carried out the attack, but also that the test for vicarious liability should be reformulated. Lord Toulson, giving the leading judgement, overruled the Court of Appeal in holding that Morrisons should be vicariously liable, but decided that the test for vicarious liability, as set out in Lister v Hesley Hall, was fine as it was thank you. It may be a fairly vague test, but in this area of law, “imprecision is inevitable”, so the test was left alone. In simple terms, the test is this:
In the present case, it was Mr Khan’s job to attend to customers and respond to their inquiries. Despite the offensive language (“We don’t do such sh*t”), Mr Khan’s response to the request for printing was within the “field of activities” assigned to him. The violence that followed, despite the fact that Mr Khan left his post at his kiosk and followed the claimant back to his car to continue his barrage of abuse, was “a seamless episode”. It was a gross abuse of position, but Mr Khan was apparently purporting to act in the business of his employer when he forcibly reiterated to Mr Muhammed that he should never return to the petrol station. Morrisons had employed him in this position, and were therefore vicariously liable for his actions.
Should you have any questions about the issues raised in this blog post please contact our employment team.
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