2020 April 1
The defendant company, which operated a chain of supermarkets, was requested by its external auditors to provide them with a copy of its payroll data. Accordingly a copy of the data was made by one of the defendant’s employees who had access to the entirety of the payroll data and then transmitted to a second employee, an internal auditor, for the sole purpose of passing it on to the external auditors. The internal auditor carried out that task but also unlawfully copied the data and uploaded it on a publicly accessible website, intending thereby to cause harm to the defendant. On the day when the defendant’s financial results were due to be announced, the internal auditor also sent the data to a number of national newspapers. The claimants, employees of the defendant whose personal data had been disclosed, brought claims against the defendant for damages for breach of confidence and misuse of private information on the basis that the defendant was vicariously liable for the internal auditor’s wrongdoing. The judge allowed the claims, holding that what the internal auditor had done in disclosing the data was so closely related to what he had been employed to do that he had committed the acts in the course of his employment. That decision was upheld by the Court of Appeal which, applying their understanding of a previous decision of the Supreme Court, held that the wrongful disclosure of the data had been within the field of activities assigned to the internal auditor and the fact that his motive had been to harm the defendant was irrelevant.
On the defendant’s appeal—
Held, appeal allowed. The decisions of the courts below were contrary to the established approach to questions of vicarious liability and were based on a misunderstanding of the previous authority of the Supreme Court, which was not intended to depart from that established approach. The test which generally applied in deciding whether an employer was vicariously liable for the wrongful conduct of one of its employees was that the wrongful conduct was so closely connected with acts that the employee was authorised to do, that, for the purposes of liability of the employer to third parties, it could fairly and properly be regarded as having been done by the employee while acting in the course of his employment. In applying that general test to the circumstances, guidance could be derived from previous authority concerning comparable situations. There were many such cases concerned with employees who deliberately inflicted harm for their own reasons, taking advantage of the opportunities which their employment made available to them. The general rule in cases of that kind was that the employer was not vicariously liable, because the employee did not commit the wrong whilst engaged in his employer’s business, but while engaged in an independent venture of his own. In the present case, the internal auditor had not been engaged in furthering the defendant’s business when he committed the wrongdoing in question. On the contrary, he had been pursuing a personal vendetta, seeking revenge for the disciplinary proceedings of months earlier. In those circumstances, applying the established approach to cases of that kind, the defendant was not vicariously liable (paras 16, 17, 23, 25, 31–35, 47, 56).
Lord Pannick QC, Anya Proops QC, Rupert Paines and Gayatri Sarathy (instructed by DWF llp, Manchester) for the defendant.
Jonathan Barnes QC and Victoria Jolliffe (instructed by JMW Solicitors llp, Manchester) for the claimants.