Kapfunde v Abbey National Plc

When an occupational health doctor is retained by a prospective employer to assess a job applicant, foreseeable economic loss does not by itself create a duty of care. The doctor’s duty is normally owed to the employer who commissioned the assessment. The applicant is not brought within a special relationship merely because they completed a medical questionnaire or were the subject of the assessment. For negligent misstatement causing pure economic loss, liability depends on the circumstances, including proximity, assumption of responsibility, reliance, and whether it is fair, just and reasonable to impose a duty. Employment status depends on contractual rights and duties, while factual conclusions about the relationship generally remain matters for the trial judge.

The appellant applied for a permanent cashier position with Abbey National, where she was already working temporarily. She completed a confidential medical questionnaire disclosing sickle cell anaemia. Dr Daniel, retained by Abbey National as an occupational health adviser, assessed her as unsuitable because of the perceived risk of increased absence, and Abbey National refused the appointment.

After an unsuccessful race-discrimination claim, the appellant brought negligence proceedings against Dr Daniel and Abbey National, alleging that Dr Daniel owed her a duty of care and that Abbey National was vicariously liable because Dr Daniel was its employee. Judge Medawar, sitting in the Central London County Court, dismissed the claim on 12 November 1996. The appeal concerned Dr Daniel’s employment status, the existence of a duty of care, and breach.

Disposition

The appeal was dismissed unanimously. Abbey National was not vicariously liable because Dr Daniel was engaged under a contract for services. The negligence claim against Dr Daniel also failed because she owed no duty of care to the appellant. The court further held, alternatively, that no breach was established.

1. Employment status. The question whether an arrangement is a contract of service depends on the contractual rights and duties, including personal service, control and the consistency of the other terms with employment, as stated in Ready Mixed Concrete (South East) Ltd v MPNI (1968) 2 QB 497. Where the issue depends on factual evaluation, it is a question of fact for the trial judge, as explained in Lee Ting Sang v Chung Chi-Keung (1990) 2 AC 374. Dr Daniel could use a locum, exercised substantial discretion, bore financial and tax responsibilities, and worked under non-exclusive arrangements. The trial judge had applied the correct principles, and there was no basis for appellate interference.
2. Duty of care. The appellant suffered alleged pure economic loss and did not rely on Dr Daniel’s report. There was no doctor-patient relationship, no pre-existing relationship from which responsibility could arise, and no general duty on an employer to process employment applications with care. Foreseeability was insufficient. The relevant principles concerning proximity, special relationship, assumption of responsibility and reliance did not extend to this case. The court treated the position as comparable to professionals advising a local authority and to an insurance doctor advising the insurer, as described in X v Bedfordshire County Council (1995) 2 AC 633. Spring v Guardian Assurance plc [1995] 2 AC 296 was confined to its employment-reference context. Baker v Kaye [1997] IRLR 219 was wrong insofar as it recognised a duty to a prospective employee in comparable circumstances.
3. Breach. Even if a duty had existed, Dr Daniel was required to exercise the skill and care of an ordinary competent occupational health physician. The expert evidence supported the finding that her assessment fell within the range of reasonable responses. No breach was therefore proved.
4. Costs. The appellant’s liability for costs was assessed at nil. Abbey National’s costs were ordered to be paid by the Legal Aid Board, subject to the usual period for representations. A bare costs order was made in favour of Dr Daniel.

• Court of Appeal (Civil Division): In [1998] EWCA Civ 535, the appeal was dismissed and costs orders were made.
• Central London County Court: Judge Medawar dismissed the appellant’s negligence claim on 12 November 1996.