Non-delegable duty and vicarious liability in the healthcare sector

My attention was recently drawn to this interesting case, Neema Ramdhean v (1) Alfredo Agedo (2) The Forum Dental Practice Limited  [unreported][1]. It is only a County Court judgment regarding dental care, but it is pertinent because it provides another indication of the direction that the courts appear to be taking with regard to the issues of non-delegable duty and vicarious liability in cases involving healthcare.

The issues are relatively straightforward.

The Claimant (“C”) claimed damages for personal injuries and losses as a result of alleged negligent dental treatment provided by the First Defendant (“D1”). D1 did not take part in the proceedings and his whereabouts was/is unknown. The dental care provided by D1 was in fulfilment of obligations of the Second Defendant (“D2”) under an Intermediate Minor Oral Surgery Contract (the “IMOS”) with Doncaster Primary Care Trust (the “PCT”). The case was before the court because of an order for a split trial with the preliminary issues to be determined of (1) whether D2 owed C a non-delegable duty of care (“NDD”) in relation to the advice and treatment provided to C by D1; and, (2) whether D2 was to be held vicariously liable (“VL”) for any such negligence as C may subsequently prove in her claim against D1.

The facts are also relatively straightforward.

C was referred by her General Dental Practitioner (“GDP”) to D2 for a wisdom tooth extraction. This took place at The Flying Scotsman Centre owned by the PCT and the treatment was administered by D1. C’s case is that D1 failed to remove the roots. Her GDP referred her back to D1 at The Flying Scotsman Centre, where he told her that all the roots had come out, although subsequent x-rays showed that some had been left behind and required removal. This took place at a different dental hospital; C has been left with some consequential sensory loss around her left lip, chin and tongue.

With respect to insurance, D1 had professional indemnity cover with Dental Protection, a mutual society that runs discretionary indemnification. However, he did not notify his indemnifiers of a possible claim by C. The indemnifiers refused to provide cover, therefore (which they were entitled to do under the terms of the cover) and stated they had no interest in the proceedings. D2 had public liability insurance. Dr Keith Jackson, a fully qualified dental practitioner and orthodontist, was the managing director and majority shareholder of D2, a limited company, and he was employed by D2. He had personal medical indemnity cover for himself but not for associates of the practice (such as D1). Dr Jackson claimed that D2’s responsibility to C was with respect only to the referral for treatment; with regard to the treatment of C, she was D1’s patient as D1 was the only person in the practice who could carry out the specialist wisdom tooth extraction work. Dr Jackson asserted that D1 was a “fully qualified, self-employed, individually indemnified, independent dental professional”. He also asserted that D2 was simply an administrative centre and D1 took all the clinical responsibility.

The judge (HHJ Belcher) made it clear early on in her judgment that the potential impact of her decision on the wider dental profession was not a relevant consideration. Similarly, she determined that the fact that C could only obtain redress by bringing a claim against D2 was also not a relevant consideration. Additionally, she was not willing to take into consideration that C had discontinued proceedings against the PCT and NHS England.

She then turned her attention to the NDD. She referenced Woodland[2] and Lord Sumption’s five “defining features” of: (1) vulnerability: C is a patient, a child, vulnerable or dependent on D’s protection against risk of injury; (2) antecedent relationship: between C and D which places C in the custody, charge or care of D and from which there is the imputation of a positive duty on D to protect C from harm; (3) lack of control: C has no control over how D performs his obligations; (4) delegation: D has delegated to a third party some function which is an integral part of D’s positive duty and that third party is exercising D’s custody or care; and, (5) negligence: the third party has been negligent in the performance of the very function delegated to him by D.

There was then consideration of Farraj[3]. Although on the particular facts of that case the court held that the defendant NHS Trust did not have a NDD, on the basis that they had delegated the performance of genetic testing to an apparently competent independent contractor external laboratory, the case was being relied upon by C for the assumption (rather than determination) that a hospital does indeed owe a NDD. Dyson LJ noted in Farraj that the concept of a personal NDD substituted for “the duty to take reasonable care” a more stringent “duty to ensure that reasonable care is taken” and must be justified on policy grounds. There were no such grounds in that particular case, however.

On that background, the judge considered Lord Sumption’s five factors, not as a test but as defining features of the facts in this particular case:

(1) Vulnerability: the judge concluded that D2 had accepted C as a patient. She did not accept Dr Jackson’s assertion that D2 performed a solely administrative function. D2 also asserted that C was the PCT’s patient and not D2’s, as the PCT had contracted D2 to provide dental services, but the judge rejected this.

(2) Antecedent relationship: D2 argued that the only such relationship was that D2 arranged for C to be examined by D1; it was the latter’s decision whether to treat C and C was, therefore, in the care of D1. The judge considered that the question to be answered was whether C was in the care of D2, not D1: she concluded that D2 had undertaken to care for C, with the IMOS permitting that to be by way of employing or engaging the services of D1. The judge further concluded that, whilst D2 had no control over the treatment decisions made by D1, D2 had “control” in the sense that it was up to D2 to refer C to D1. As C had asserted, she was not a patient only of D1: C’s GDP could not refer her directly to D1; it had to be through D2.

(3) Lack of control: D2 sought to argue that C could have declined treatment by D1, but the judge concluded that such an assertion missed the point: the question was whether C had control over how D2 chose to perform its obligations, i.e. personally, by employees or by third parties, and C had no such control.

(4) Delegation: D2 unsurprisingly asserted that it had no positive duty and its role was only administrative. The judge rejected this, concluding that D2 had delegated the care of C to D1 and D1’s function (to treat C) was an integral part of D2’s positive duty.

(5) Negligence: no findings had yet been made regarding whether D1 had been negligent but the allegations made were clearly not collateral and related to the performance by D1 of the very function delegated to him by D2.

The judge concluded that it was fair, just and reasonable to impose a NDD: D2 would accept a referral as a patient of the practice with attached obligations to provide such patient with relevant dental services for which it made commercial profit.

Although the judge did not need to determine the issue of VL, she was conscious that her judgment might be appealed and so she did address the issue. She referred to the Barclays Bank[4] appeal, judgment which is pending from the Supreme Court, and the decisions made in the line of cases leading up that appeal[5]. The starting point was Lord Phillip’s five criteria identified in the Christian Brothers case for the imposing of VL:

(1) Means to compensate: the employer is more likely to have the means to compensate the victim than the employee;

(2) Activity on behalf of employer: the tort has been committed as a result of activity by the employee on behalf of the employer;

(3) Business activity: the employee’s activity is likely to be part of the employer’s business activities;

(4) Creation of risk: the employer has created the risk to the victim by employing the employee to carry on the activity; and,

(5) Control: the employee will have been under the control of the employer, to a greater or lesser degree.

The judge referenced Lord Reed saying that the five factors were not all equally significant and that the fact of a defendant with deeper pockets is not in and of itself a reason to impose VL. With respect to the fifth factor, the judge concluded there was a sufficient degree of control, even though D2 could not tell D1 how to treat C; it was sufficient that D1 was treating C only because of D2. The three remaining factors were inter-related. The judge concluded that C’s treatment was part of D2’s business activity and D1 was carrying out that activity on behalf of D2’s obligations under the IMOS; D2 had created the risk, therefore. The judge rejected D2’s invitation to rely on Whetstone[6], a similar case factually but one which was a first instance decision determined before Cox and Mohamud, regarding whether the associate agreement under which D1 was “employed” by D2 was a relationship “akin to employment” or an independent subcontract, deciding that it took her no further in determining the VL issue.

She concluded that D2 was vicariously liable for any negligence which C may subsequently prove in her claim against D1.

This is an interesting decision. It might, of course, be appealed, given the judge’s conclusion notwithstanding that it is a County Court decision. To some extent, evolution in this area may of course depend upon the outcome of the Barclays Bank Supreme Court appeal, whatever that outcome may be, and the ultimate reasoning for it; however, this judgment demonstrates that the issues of NDD and VL in a healthcare context are live and the law appears to be on the move. Given the backdrop of some recent high profile cases, such as that of Mr Ian Paterson, it might not be that surprising if the traditional model of independent contractor was soon to be eroded and the private healthcare sector has to come to terms with a shake-up of who ends up being liable for what, with the consequential impact on insurance and indemnity arrangements.

[1] My sincere thanks to Richard Booth QC for drawing the case to my attention

[2] Woodland v Swimming Teachers Association & Others [2013] UKSC 66

[3] Farraj v King’s Healthcare NHS Trust [2009] EWCA Civ 1203

[4] Barclays Bank plc v Various Claimants [2018] EWCA Civ 1670

[5] The Catholic Child Welfare Society v The Institute of the Brothers of the Christian Schools [2012] UKSC 56; Cox v Ministry of Justice [2016] UKSC 10; Mohamud v WM Morrison Supermarkets PLC [2016] UKSC 11; and Armes v Nottinghamshire County Council [2017] UKSC 60.

[6] Whetstone v MPS [2014] 1024 QB

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