ABC v Huntercombe (no.12) Limited & Ors

Transfer of Undertakings (Protection of Employment) Regulations 2006, reg 4(2)(a), does not transfer a transferor’s vicarious liability to a third party for torts committed by employees before a relevant transfer. Although “in connection with” is capable of wide meaning, its scope must be determined by the Directive’s purpose and the statutory scheme.

The Directive safeguards employees’ enforceable rights when their employer changes. An employee has no right to require an employer to bear vicarious liability to a third party. The detailed employee-liability-information regime confirms that liabilities arising from employees’ claims may transfer, but undisclosed third-party claims do not.

ABC alleged that she was mentally and verbally abused, and repeatedly restrained, while a patient at Huntercombe Hospital in 2018 and 2019. The alleged events preceded the March 2021 transfer of the hospital undertaking from Huntercombe to Active Young People Ltd (AYPL).

Huntercombe entered liquidation. ABC therefore contended that AYPL had acquired Huntercombe’s vicarious liability for alleged torts and human-rights breaches by two clinicians whose employment transferred. HHJ Bird, sitting in the King’s Bench Division, answered that issue negatively in [2025] EWHC 1000 (KB).

The appeal concerned whether reg 4(2)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 transfers an employer’s vicarious liability to a third-party claimant for pre-transfer wrongdoing by an employee.

1. Appeal dismissed. Coulson LJ, with whom Sir Launcelot Henderson and Bean LJ agreed, held that Huntercombe’s alleged vicarious liability to ABC did not transfer to AYPL.
2. Domestic legislation implementing an EU Directive must, so far as possible, be construed in the light of the Directive’s wording and purpose. The Acquired Rights Directive principally safeguards employees’ existing enforceable rights when there is a change of employer. That purpose governed the construction of reg 4(2)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.
3. The words “in connection with” are potentially broad, but are context-dependent. They do not encompass every factual association with a contract of employment. In this statutory context, the requisite connection is supplied by the Directive’s employee-rights purpose and the scheme of the Regulations.
4. An employer’s vicarious liability to a third party is secondary to the employee’s alleged primary liability. It gives the employee no enforceable right against the employer and affords the employee no legal protection. The employee may also be liable to indemnify the employer or to make contribution. Accordingly, that liability is outside reg 4(2)(a), even though the alleged wrongdoing occurred in the course of employment.
5. The employee-liability-information provisions reinforced that conclusion. They require disclosure of claims by employees and protect transferees against liabilities they may assume. The Regulations contain no equivalent machinery for third-party claims. It would be contrary to the scheme for a transferee to assume unknown and undisclosed liabilities for events before the transfer.
6. The court distinguished employee claims for injury, including claims based on an employer’s vicarious liability, which may transfer because they enforce rights held by the employee. It disapproved the reasoning in Doane v Wimbledon FC [2007] 12 WL UK 2 insofar as it treated an employer’s vicarious liability to a third party as a transferable employee benefit. The judge’s result was correct, although the preferable formulation was not a general requirement of “direct” liability.

• Court of Appeal (Civil Division) — dismissed ABC’s appeal and affirmed that reg 4(2)(a) did not transfer the alleged third-party vicarious liability: [2026] EWCA Civ 1161 .
• King’s Bench Division, Manchester District Registry — HHJ Bird answered Preliminary Issues 1 and 2 negatively, holding that the alleged vicarious liability did not transfer; he would have answered the insurance issue affirmatively if that conclusion were wrong: [2025] EWHC 1000 (KB) .