Lister and Others v Hesley Hall Ltd

I. The question

The central question before the House is whether as a matter of legal principle the employers of the warden of a school boarding house, who sexually abused boys in his care, may depending on the particular circumstances be vicariously liable for the torts of their employee.

II. The sexual abuse

In 1979 Axeholme House, a boarding annex of Wilsic Hall School, Wadsworth, Doncaster, was opened. Between 1979 and 1982 the appellants were resident at Axeholme House. At that time the appellants were aged between 12 and 15 years. The school and boarding annex were owned and managed by Hesley Hall Ltd as a commercial enterprise. In the main children with emotional and behavioural difficulties were sent to the school by local authorities. Axeholme House is situated about two miles from the school.

The aim was that Axeholme House would provide care to enable the boys to adjust to normal living. It usually accommodated about 18 boys. The company employed Mr and Mrs Grain as warden and housekeeper to take care of the boys. The employers accept that at the material time they were aware of the opportunities of sexual abuse which may present themselves in a boarding school environment.

The warden was responsible for the day to day running of Axeholme House and for maintaining discipline. He lived there with his wife, who was disabled. On most days he and his wife were the only members of staff on the premises. He supervised the boys when they were not at school. His duties included making sure the boys went to bed at night, got up in the morning and got to and from school. He administered pocket money, organised weekend leave and evening activities, and supervised other staff. Axeholme House was intended to be a home for the boys and not an extension of the school environment.

The employers accept that, unbeknown to them, the warden systematically sexually abused the appellants in Axeholme House. The sexual abuse took the form of mutual masturbation, oral sex and sometimes buggery. The sexual abuse was preceded by "grooming" being conduct on the part of the warden to establish control over the appellants. It involved unwarranted gifts, trips alone with the boys, undeserved leniency, allowing the watching of violent and X-rated videos, and so forth. What may initially have been regarded as signs of a relaxed approach to discipline gradually developed into blatant sexual abuse. Neither of the appellants made any complaint at the time. In 1982 the warden and his wife left the employ of the respondents. In the early 1990s a police investigation led to criminal charges in the Crown Court. Grain was sentenced to seven years' imprisonment for multiple offences involving sexual abuse.

In 1997 the appellants brought claims for personal injury against the employers.

III. The decision at first instance

The trial took place in January 1999. It is necessary to describe the shape of the case. There were then three claimants. Their claims were advanced on two separate grounds. First, it was alleged that the employers were negligent in their care, selection and control of the warden. Secondly, the plaintiffs alleged that the employers were vicariously liable for the torts committed by the warden. The case was heard before Judge Walker in the Dewsbury County Court. The evidence was adduced by witness statements and oral evidence. The judge was asked to give judgment on liability only.

On 25 February 1999 the judge gave judgment. He dismissed the claim in negligence against the employers. That left the claim based on vicarious liability to be considered. This claim appeared to be ruled out by the Salmond test (Salmond, Law of Torts, 9th ed (1936), p 95; Salmond and Heuston, Law of Torts, 21st ed (1996), p 443) as interpreted and applied by the Court of Appeal in Trotman v North Yorkshire County Council [1999] LGR 584. The following passage in the judgment of Butler-Sloss LJ, at p 591, reveals the perceived difficulty:

"18. Having looked at some of the relevant decisions on each side of the line, it is useful to stand back and ask: applying general principles, in which category in the Salmond test would one expect these facts to fall? A deputy headmaster of a special school, charged with the responsibility of caring for a handicapped teenager on a foreign holiday, sexually assaults him. Is that in principle an improper mode of carrying out an authorised act on behalf of his employer, the council, or an independent act outside the course of his employment? His position of caring for the plaintiff by sharing a bedroom with him gave him the opportunity to carry out the sexual assaults. But availing himself of that opportunity seems to me to be far removed from an unauthorised mode of carrying out a teacher's duties on behalf of his employer. Rather it is a negation of the duty of the council to look after children for whom it was responsible. Acts of physical assault may not be so easy to categorise, since they may range, for instance, from a brutal and unprovoked assault by a teacher to forceful attempts to defend another pupil or the teacher himself. But in the field of serious sexual misconduct, I find it difficult to visualise circumstances in which an act of the teacher can be an unauthorised mode of carrying out an authorised act, although I would not wish to close the door on the possibility."

Thorpe LJ agreed with this judgment and Chadwick LJ expressed himself in materially similar terms. Not surprisingly, the judge felt compelled to conclude that the employers could not be held vicariously liable for the torts of the warden. On the other hand, the judge held that the employers were vicariously liable for the warden's failure to report to his employers his intentions (before the acts of sexual abuse) and the harmful consequences to the children (after acts of abuse). The judge explained his reasoning as follows:

"1. The defendant admits it had a duty of care towards the plaintiffs.

2. That duty of care was to take all reasonable steps to safeguard the plaintiffs (and other pupils) in its physical, moral and educational development whilst at the school.

3. In carrying out that duty of care the defendant a limited company necessarily had to appoint a hierarchy of responsible agents …

4. Mr Grain in particular was responsible for the boys while at Axeholme House …

5. He had a duty to report to the defendant … any harm which he perceived had come or might come to any of the boys in his care with a view to the defendant carrying out further its duty of care in taking remedial or preventative steps.

6. Failure by Mr Grain to report harm to the boys would unquestionably be a failure to carry out a duty which he owed generally and specifically to each boy in his care.

7. The consequences of a report of abuse upon a boy would (I find) undoubtedly have resulted in the removal from the scene by the defendant of the source of the harm by the dismissal of Mr Grain and the report of the incident to the police.

8. The defendant is therefore vicariously liable for Mr Grain's failure to report the acts of abuse."

The judge entered judgment for the plaintiffs against the employers on liability, and ordered that damages be assessed. The judge gave leave to appeal to the Court of Appeal.

IV. The Court of Appeal decision

The employers appealed to the Court of Appeal. The plaintiffs did not cross-appeal the judge's decision that the employers were not negligent. The only remaining issue was therefore whether the employers were vicariously liable. But, like the judge, the Court of Appeal was bound by the previous Court of Appeal decision in Trotman v North Yorkshire County Council [1999] LGR 584. In this situation counsel for the plaintiffs found it difficult to argue that the employers were vicariously liable for the sexual acts of the warden. Instead counsel for the plaintiffs defended the judgment in favour of his clients on the basis of the warden's failure to report his own conduct. By judgments delivered on 7 October 1999, The Times, 13 October 1999 the Court of Appeal dismissed this argument The reasoning of the Court of Appeal is encapsulated in the following sentence in the judgment of Waller LJ:

"The simple point in this case is that if wrongful conduct is outside the course of employment, a failure to prevent or report that wrong conduct cannot be within the scope of employment so as to make the employer vicariously liable for that failure when the employer was not vicariously liable for the wrongful conduct itself."

The Court of Appeal accordingly allowed the appeal. In due course the House of Lords granted leave to appeal. The appeal proceeded at the instance of two appellants only.

V. The issues before the House

Since the decision in the Court of Appeal the law reports of two landmark decisions in the Canadian Supreme Court, which deal with vicarious liability of employers for sexual abuse of children, have become available: Bazley v Curry (1999) (1999) 174 DLR(4th) 45; Jacobi v Griffiths (1999) 174 DLR(4th) 71. Enunciating a principle of "close connection" the Supreme Court unanimously held liability established in Bazley's case and by a 4 to 3 majority came to the opposite conclusion in Jacobi's case. The Supreme Court judgments examine in detail the circumstances in which, though an employer is not "at fault," it may still be "fair" that that it should bear responsibility for the tortious conduct of its employees. These decisions have been described as "a genuine advance on the unauthorised conduct/unauthorised mode distinction": Peter Cane,...