The Court of Appeal has upheld a High Court decision that both the employer and host employer were vicariously liable for two seconded employees’ alleged dishonest assistance and knowing participation in fraudulent trading. The investment bank trader employees were so much a part of the work, business or organisation of both their employer and the host company to which they were seconded that it was just to make both employers vicariously liable.
The Court of Appeal judgment contains important findings in relation to vicarious liability:
- The decision is a helpful reminder that cases on vicarious liability are highly fact sensitive.
- The test is whether the seconded employee can be said to be so much of a part of the work, business and organisation of the relevant employer so as to make that employer vicariously liable for the employee’s tortious actions.
- The court rejected the argument made by the employer that the “loan” of the traders in this case was “so effective and complete that only [the host employer] should be held responsible for their tortious acts”. The court warned that it will be very rare to have circumstances giving rise to such a complete shift from the actual employer to the organization to which the employee is loaned. The court also noted that there has been no recorded case that has come to this conclusion.
For advice or to discuss what this means for you and your business, please contact your usual Baker McKenzie contact.
Case: Natwest Markets Plc v Bilta (UK) Ltd, Court of Appeal