James-Bowen and others v Commissioner of Police of the Metropolis

An employer defending a claim based on vicarious liability does not owe its employees a duty to conduct the litigation so as to protect their economic or reputational interests. Such a novel duty would create serious conflicts between the employer’s control of its defence and the employees’ desire for vindication. It would also inhibit admissions and settlements, disrupt proceedings, encourage satellite litigation and risk undermining legal professional privilege.

The implied obligation of trust and confidence does not create a wider duty. Whether framed in contract or tort, the proposed obligation must satisfy the requirement that its imposition be fair, just and reasonable.

Four police officers were accused of assault during an arrest. A civil claim was later brought against the Commissioner, alleging vicarious liability under section 88 of the Police Act 1996. The officers were not parties to that claim. The Commissioner settled it with an admission of liability and an apology referring to violence by the officers.

The officers subsequently claimed damages for the alleged mishandling of the defence. Jay J struck out their claims and entered summary judgment for the Commissioner. The Court of Appeal, [2016] EWCA Civ 1217, held that it was arguable that the Commissioner owed a duty to defend the proceedings effectively so as to safeguard their economic and reputational interests.

The Commissioner appealed. The sole remaining issue was whether such a duty of care existed. Claims based on a retainer, assumption of responsibility and foreseeable psychiatric injury were no longer pursued.

1. Appeal allowed unanimously. Lord Lloyd-Jones, with whom Lady Hale, Lord Mance, Lord Kerr and Lord Wilson agreed, held that imposing the claimed duty would not be fair, just or reasonable.

2. The duty could not be derived from the implied obligation of trust and confidence. Although the relationship between the Commissioner and police officers is closely analogous to employment, deriving a duty concerning the conduct of litigation would substantially extend established employment obligations. Questions about standardised implied terms require an assessment of fairness, reasonableness and competing policies. Such an implied term could not be wider than the concurrent duty available in negligence.

3. The case concerned a novel duty. Under Caparo Industries plc v Dickman [1990] 2 AC 605 and Robinson v Chief Constable of West Yorkshire Police [2018] UKSC 4, the court had to reason incrementally from established categories, maintain legal coherence and weigh the policies for and against liability.

4. The common law does not ordinarily impose a negligence duty to protect reputation. The limited duty concerning an employment reference recognised in Spring v Guardian Assurance plc [1995] 2 AC 296 was more appropriately explained through assumption of responsibility. Calveley v Chief Constable of the Merseyside Police [1989] 1 AC 1228 strongly opposed the proposed extension because a chief constable owed no corresponding duty when investigating or disciplining officers.

5. An employer’s interests when defending a vicarious-liability claim differ fundamentally from those of the employee. The employer bears the costs and potential liability and must control investigations, evidence, witnesses, resources, admissions and settlement. The employee’s predominant interest may be personal vindication. Possible contribution proceedings reinforce that conflict. A duty lasting only until an actual conflict emerged would be impracticable.

6. The Commissioner’s public responsibilities provided an additional reason against liability. She had to remain free to defend proceedings as she considered appropriate in accordance with her public duty, without a conflicting obligation to protect the officers’ reputations.

7. Litigation policy also opposed the duty. It would chill the conduct of defences, discourage settlement, cause delay or disruption and generate satellite litigation amounting to collateral challenges to earlier proceedings.

8. A shared interest in the successful defence did not entitle the officers to compel disclosure of the Commissioner’s privileged material. Common interest privilege requires more than a shared interest in the outcome. Recognition of the proposed duty might nevertheless force employers to waive privilege in later claims, inhibiting frank legal advice and further weighing against the duty.

• United Kingdom Supreme Court: Allowed the Commissioner’s appeal unanimously and restored the conclusion that the asserted duty of care was not arguable: [2018] UKSC 40.
• Court of Appeal: Allowed the officers’ appeal on the remaining economic and reputational harm issue, holding that the asserted duty was arguable; dismissed the other grounds: [2016] EWCA Civ 1217.
• High Court: Jay J struck out the claims and entered summary judgment for the Commissioner.