Jim Herd

The English Court of Appeal has just released its judgment in Bellman v Northampton Recruitment Ltd. This is the case where, after a Christmas party ended, the M.D. and owner of the company continued drinking with staff in a nearby hotel.

Taxi transfers and most of the drinks were paid for by the company boss. At around 3 am, an argument broke out about a new employee’s working terms. Mr Major, the boss was unhappy with this and told off the staff collectively while emphasizing his authority. When Mr Bellman began to question Mr Major’s decisions the boss assaulted him by punching him as a result of which Mr Bellman was knocked unconscious, struck his head on the pavement as he fell and suffered severe personal injury including brain injuries with serious long-term cognitive dysfunction.

Decision at First Instance

At first instance in the High Court His Honour Judge Cotter QC found that while the Christmas party itself was an event which was sufficiently connected to the company’s business and the wrongdoer’s job the impromptu drinking session was not. The company could not be held vicariously liable in such circumstances.

At paragraph 80 his Lordship explained his reasoning thus:

“Standing back and considering matters broadly, what was taking place at 3.00 a.m. at the hotel was a drunken discussion that rose after a personal choice to have yet further alcohol long after a works event had ended. Given the time and place, when the conversation was, as it was for a significant time, on social or sporting topics, no objective observer would have seen any connection at all with the jobs of those employees of the Defendant present. That it then veered into a discussion about work cannot provide a sufficient connection to support a finding of vicarious liability against the company that employed them. It was, or without any doubt became, an entirely independent, voluntary, and discreet early hours drinking session of a very different nature to the Christmas party and unconnected with the Defendant’s business. To use a hackneyed expression akin to ‘a frolic’ of their own.”

Appeal Court Decision

By unanimous decision 3 appellate judges disagreed with the above. Two key matters needed to be considered: (i) the nature of the employee’s job – to be construed broadly and objectively, and (ii) whether there was sufficient connection between his job and the wrongful conduct to render vicarious liability appropriate. Mr Major owned the company, was its most senior employee and directing mind, and had full control over how he conducted his role. When he lectured his staff at the afterparty, he was wearing his metaphorical Managing Director’s hat and establishing his authority in that role. Additionally, that party was not a purely social event which so happened to involve colleagues but directly followed an organised work event where the company paid for the employees drinks and taxi fares.

In these circumstances the company was found liable.

Conclusion

Firms require to be mindful of their responsibilities to staff when arranging entertainments and parties where alcohol may be consumed to excess.

Because of the severity of the personal injury and the potentially large sum in damages one can appreciate why the plaintiff’s lawyers wanted liability established against the company (and potentially its Employer’s Liability insurers) rather than just against the owner as an individual. The case may be appealed further given the narrow issues and potential sums involved.

Footnote: A prosecution of the owner was deserted part-way through despite CCTV footage clearly showing him attacking the employee a second time, when the severe injuries were sustained. The owner had pled self-defence which was not supported by the key evidence and the Crown has since accepted that the decision to end the prosecution was wrong.

Jim Herd is a senior associate at Morton Fraser