Vicarious liability for independent contractor held established

Vicarious liability is an area that has been subject to significant judicial attention in recent years, and its extending scope was considered in the detailed decision of Sheriff Reid in Grubb v Shannon. After suffering an adverse reaction to a treatment provided by a beauty therapist who worked from the defender’s salon, the pursuer sought damages. The defender maintained that she was not vicariously liable for the therapist’s negligence.

The defender had selected the therapist and others to provide treatments or hairdressing at the salon that she leased. The defender exercised control over their work and set the prices charged. The therapists provided their own equipment and materials. The defender did not pay wages, PAYE or income tax and the therapists kept the payments they received from customers. They regarded themselves as self-employed independent contractors. Evidence was led which demonstrated that the therapists took part in activities to promote the defender’s business.

Having found that the therapist had been negligent in providing the beauty treatment, Sheriff Reid addressed the issue of vicarious liability and the two-stage test. The first element was whether the relationship between defender and wrongdoer made it just, fair and reasonable to impose vicarious liability. Recent developments meant that vicarious liability was no longer restricted to a few distinct contractual relationships, typically employer and employee. Relationships "akin to employment" could also give rise to vicarious liability. It was clear that the therapist was not an employee of the defender. However, their relationship was held to be akin to employment as the therapist’s activities were wholly integrated into the defender’s business, and were indistinguishable from the core element of that business. The defender also exercised the degree of control required, as she could direct which activities the therapist carried out.

The second stage was to determine whether the negligent act was "so closely connected" with the activities assigned or entrusted to the therapist by the defender as to justify the imposition of vicarious liability. There was no real dispute about whether this element was satisfied – the treatment provided to the pursuer plainly fell within the scope of such activities and was therefore sufficiently closely connected to the therapist’s relationship with the defender to make it fair, just and reasonable to impose vicarious liability.

Grubb v Shannon [2018] SC GLA 13; 2018 GWD 10-126