Relationship between self-employed dentists and dental practice not “akin to employment” for vicarious liability, but beware non-delegable duties

The Court of Appeal has provided helpful obiter comments on the first limb of the test for vicarious liability, namely the requirement that the relationship between the wrongdoer and the defendant be factually one of employer/employee, or akin to such a relationship. The Court of Appeal ultimately found against the defendant. Although the first limb was not satisfied and thus there was no vicarious liability, there was a non-delegable duty, breach of which gave rise to primary liability.

Background

In Hughes v Rattan [2022] EWCA Civ 107, the Court of Appeal considered the relationship between a dental practice and self-employed dentists who worked at the practice. The claimant had received treatment from various dentists working for the practice between 2009 and 2015 and made a claim against the practice for negligent treatment by four of them. The practice denied that it was vicariously liable or owed a non-delegable duty.

At first instance, the High Court had found that both vicarious liability and a non-delegable duty were present.

Non-delegable duty

The Court of Appeal found that the judge at first instance was “clearly right” to conclude that the practice owed a non-delegable duty of care to patients. Factors the court took into account included:

• The claimant’s treatment plan named the proprietor of the practice as the treatment provider and made no mention of the other dentists.
• The agreement between the practice and the dentists referred to “patients of the practice” and imposed extensive restrictive covenants preventing the dentists from treating such patients outside the practice.
• The relationship between the claimant and the practice satisfied the requirements set out in Woodland v Swimming Teachers Association and others [2014] AC 537 for the existence of a non-delegable duty. In particular:
  • The claimant was a patient and thus assumed to be “vulnerable or dependant on the protection of the defendant against the risk of injury.” The claimant did not have to be part of a particular subset of patients (e.g. lacking capacity) in order to fulfil this requirement.
  • At the latest from the time the treatment plan was agreed, there was a relationship between the claimant and the practice which preceded the alleged wrongdoing and placed the claimant in the care of the practice such that they had a duty to protect her from harm.
  • The claimant had no control over how the practice performed its obligations, and in particular over the decision to delegate performance to the dentists. She could express a preference to be seen by one dentist rather than another, or refuse to be treated at all, but this was not enough to avoid the imposition of a non-delegable duty.

Vicarious liability

Although the Court of Appeal agreed with the court below on the question of non-delegable duty, it overturned the decision that vicarious liability applied, referring to the Supreme Court decision of Various v Barclays Bank Plc [2020] UKSC 13. The Supreme Court held in Barclays that a medical contractor was not sufficiently under the control of the defendant to create a relationship akin to employment such as to make the defendant liable for the acts of the contractor. Factors such as the autonomy of the contractor in deciding who to take work from and possessing independent insurance were key in that decision.

The Court of Appeal confirmed that the test for the first limb of vicarious liability is as stated by Baroness Hale in the Barclays decision, namely: “whether the tortfeasor is carrying on business on his own account or whether he is in a relationship akin to employment with the defendant”, and that factors both for and against the relationship being one akin to employment should be balanced together.

The Court of Appeal considered the various factors. Those pointing towards the relationship being akin to employment included:

• The practice controlled the opening hours of the practice premises and equipment.
• The practice had a responsibility to provide contracted NHS services through the dentists.
• The dentists were contractually obliged to follow the policies and procedures of the practice (but these policies and procedures were found not to constitute substantive control of the dentists).

The factors pointing against the relationship being akin to employment were:

• The dentists were not required to be exclusive to the practice or to work any minimum hours; they were free to work as little as they wanted, or for other practices;
• The practice exercised no control over the dentists’ medical decisions or over third-party commercial service decisions such as outside laboratory tests;
• The practice had no financial control over the dentists, who were treated by HMRC as independent of the practice for tax purposes;
• Although the practice took on the financial burden of funding the facilities, the financial risk of bad debt was shared by the dentists with the practice
• The dentists were required to have their own professional indemnity insurance and indemnify the practice against claims made by their patients.
• There was no disciplinary or grievance procedure between the dentists and the practice.

Balancing those factors, and being particularly swayed by the independence of the dentists from the practice, the Court of Appeal held that the relationship was not akin to employment, and so vicarious liability did not arise.

Comment

Hughes emphasises once again the need to consider all relevant factors, weighing in the balance those which suggest the relationship is akin to employment against those pointing the other way. Given that, the potential for reasonable disagreement will lie at the heart of many work relationships falling outside the traditional employer/employee model, with modest changes in circumstance potentially pushing the conclusion onto one side or the other. Great care is therefore required when investigating and analysing the relationship between tortfeasor and defendant.

Where the purpose of the relationship is to provide services to parties who may be considered vulnerable in the sense considered in Woodland, the analysis must also take into account the possibility of a non-delegable duty. Examples of vulnerable parties, according to the existing case law, include patients, children, prisoners and care home residents. However, this is not an exhaustive list, and the relationship between provider and service user must be analysed on its own facts in each case.