Was Barclays to blame for doctor’s alleged historic sexual assaults?

Dr Gordon Bates (1926 – 2009) was a GP who conducted medical examinations of Barclays Bank employees between 1968 to 1984.

In Barclays Bank PLC v Various Claimants [2018] EWCA Civ 1670, 126 claimants, comprised of current and former employees of Barclays, brought claims against the bank, alleging that Dr Bates had sexually assaulted them during medical examinations conducted at a consulting room in his home. They claimed that Barclays was vicariously liable for Dr Bates’ assaults. As a preliminary issue, the High Court determined the question of whether Barclays was vicariously liable in principle, (ie. before hearing any evidence of the alleged assaults at trial).

Background

The medical examinations were a pre-condition for offers of employment at the bank. Most of the claimants were teenagers or young women at the time.

Pausing there, while compulsory medical examinations like this are largely a thing of the past, I can only imagine how terrifying it must have been for any of the claimed victims to have suffered such appalling abuse.

The description of the assaults is as follows:

‘Dr Bates required the individual to undress at least down to her underwear. The allegations made typically include inappropriate examinations of the breasts and/or digital contact or penetration of the anus or vagina.’

Some of the victims were as young as 15. Barclays paid Dr Bates per examination. He completed a pro forma report provided by the Bank indicating whether the medical examination was ‘satisfactory’. The form, as drafted by Barclays, included invasive questions about chest measurements and (for female candidates only) genital disorders.

A police investigation conducted in 2013, concluded that had Dr Bates been alive, he would have faced criminal charges based on the evidence available.

The law

Vicarious liability is an evolving area (as clients on both sides will often need to be warned). There is no single test and no strict rules as to the weight to be attached to various factors to be considered.

RELATED: UK Supreme Court extends vicarious liability in landmark judgment

Broadly, there are 2 stages to the analysis.

1. Is relationship between the Defendant and the wrongdoer is capable of giving rise to vicarious liability? (This is usually satisfied by employer-employee contracts, or where the relationship is ‘akin to employment’); and
2. Is there a sufficiently close connection between the relationship of Defendant and wrongdoer and the alleged misconduct?

At both stages, the Courts must consider whether it is fair, just and reasonable to hold the Defendant liable. The question of whether the Defendant has the means to compensate the victim/s is highly relevant to this (see Various Claimants v Catholic Child Welfare Society and others [2012] 3 W.L.R. 1319 at § 34).

At Stage 1, the Courts have laid down 5 criteria relevant to the relationship between the Defendant and the wrongdoer:

• the employer is more likely to have the means to compensate the victim and can be expected to have insured against that liability;
• the wrong will have been committed as a result of activity being taken by the employee on behalf of the employer;
• the employee’s activity is likely to be part of the business activity of the employer;
• the employer, by employing the employee to carry on the activity will have created the risk of the wrong being committed by the employee; and
• the employee will, to a greater or lesser degree, be under the control of the employer.

At Stage 2, if a wrongdoer’s actions are closely connected to their employment and arise during the course of the employment, then it does not matter that they were abusing their position – the employer may be held liable (as in the UK Supreme Court’s decision in Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11 at § 47. See also the sister judgment in Cox v Ministry of Justice [2016] UKSC 10).

The High Court claim

The claimants argued that Dr Bates was either a direct employee of the bank or was in a relationship ‘akin to employment’. Barclays argued that Dr Bates was a self-employed independent contractor and that liability stopped with him. Mrs Justice Nicola Davies DBE ruled that vicarious liability was established. The services provided by Dr Bates were for the benefit of the bank and on its behalf.

Since Dr Bates’ death and the distribution of his estate, the only legal remedy available to the claimants was to bring a claim against the Bank, which would have no difficulty satisfying the claims. The High Court concluded that in those circumstances Barclays was vicariously liable for Dr Bates’ sexual assaults.

The Court of Appeal judgment

Barclays appealed against that finding to the Court of Appeal on the basis that the Judge was wrong to find that Dr Bates was in a relationship with the Bank akin to employment. They argued that he was an independent contractor who was not integral to the business. To extend liability to the Bank for the actions of an such an independent medical practitioner would have potentially vast implication for many businesses.

The Court dismissed the banks’ appeal and held:

• The Court’s focus should be on the 2-stage test, not on whether or not the wrongdoer was an ‘independent contractor’ (§ 44). Whether someone was an independent contractor was no longer a decisive factor;
• When considering the financial means of the Defendant, that question should not be examined as at the time of the wrong, but at the time of the litigation, although this factor will attract little weight (§ 50);
• At Stage 1, the Court of Appeal found that the medical examinations benefitted the bank, was central to its business activity, the examinations created a risk of abuse on the facts and, crucially, the bank had exercised significant control over the specific time, place, format and tests in these intimate and wide-ranging medical exams (§§ 51 – 57);
• On the application of the close connection test (ie. Stage 2), the exams were obviously central to the bank’s relationship with Dr Bates as he was hired for that purpose only (§ 59).

The Court agreed with High Court that the bank was, in principle, vicariously liable for the alleged sexual assaults by Dr Bates.

Conclusion

While the 126 claimants cleared this particular hurdle, as the litigation continues they are likely to face arguments that their claims are out of time and that a fair trial is not possible following Dr Bates’ death in 2009.

Just look at the case of Kimanthi & Others v Foreign and Commonwealth Office [2018] EWHC 2066 (QB), where the Court refused to extend time for a Kenyan claimant to sue the UK government over mistreatment in the 1950s, in large part due to lack of good reasons to explain a delay of 56 years.

Technicalities aside, there is something unseemly in my view about a large institution resisting the historic sexual abuse claims by its former and current employees in this way. I’m not the only one to express unease about the bank’s tactical decision-making. Kieran Chatterton, an abuse lawyer at Switalskis Solicitors expressed similar concerns in his earlier article about why the bank argued over vicarious liability in a relatively clear case like this.

The potential damage to reputation, trust and morale (though difficult to quantify) may cost the bank far more than a compromise.