Bell v Alliance Medical: a warning to employees
It is trite that an employer will be vicariously liable for the negligent acts of their employees (when done in the course of their employment). But it is often forgotten that the employee remains jointly and severally liable with her employer. In Bell v Alliance Medical  CSOH 34 Mrs Bell sued Alliance Medical, the operators of the MRI scanning facility at Forth Valley Hospital and the employers of the radiographers that staffed that unit. Mrs Bell claimed that when she went for a scan in October 2008, the radiographer, Mrs McColl, when cannulating her arm, struck an artery instead of a vein. It was not suggested that this negligence. But Mrs Bell claimed that there was a clear spurt of blood on the removal on the cannula that should have alerted Mrs McColl to the fact an artery had been struck. That, in turn, should have resulted in Mrs Bell receiving urgent medical treatment. Mrs Bell and Mrs McColl had sharply differing accounts of the removal of the cannula: Mrs Bell spoke for a large spurt of blood that left a large stain on her jeans; Mrs McColl remembered nothing out of the ordinary and did not recall a spurt of blood. That sharp factual dispute, which the Lord Ordinary resolved in Mrs Bell’s favour, was determinative of liability.
Damages were agreed at £700,000. It is worth noting how that agreement was reached. Alliance lodged a novel form of “tender” that offered not to settle the action but to agree damages at £700,000 in the event that liability was established. That “tender” was accepted by Mrs Bell. No issue was taken with the competence of that form of “tender” and the Lord Ordinary was prepared to accept it (para.122).
Matters did not end there. Alliance had convened Mrs McColl as a third party and claimed to be entitled to an indemnity from her. Mrs McColl denied that she was obliged to indemnify her employer. She also denied she was liable to make a contribution to her employer’s liability, but if she was, Mrs McColl claimed to be entitled to a contribution from the Health Board that owned Forth Valley Hospital based on the non-delegable duty that the Board owed Mrs Bell. The decision to convene Mrs McColl may be regarded by some as surprising: she remains in the employ of Alliance and has been promoted by them since October 2008.
Alliance based their claim on the 1957 English House of Lords decision of Lister v Romford Ice and Cold Storage. In that case, the House of Lords held that it was an implied term of an employee’s employment contract that he indemnify his employer for any loss caused by his negligence. In England, it had been held that Lister was limited to circumstances where an employee’s negligence caused injury to a fellow employee (Morris v Ford Motor Co Ltd). The Lord Ordinary disagreed: the considerations underpinning the decision in Lister may be outmoded and out of date but it remains, according to the Lord Ordinary, the law of Scotland (at para.115).
The consequences of that conclusion are potentially very significant, as the Lord Ordinary recognised: “A consequence of holding the employee liable in this case may be to shift the economic burden of insuring against the negligent acts of employees from the employer to the individual employee. A prudent employee, certainly one employed by the defenders, would now seek insurance. No doubt in the past premiums will have been assessed on the basis that few actions were taken against individuals rather than the employer. That may change.” (at para.110) As the Lord Ordinary recognised at para.109, Mrs McColl had the benefit of insurance as a result of her membership of the Society of Radiographers. But there is nothing in principle that would have prevented Alliance seeking an indemnity from Mrs McColl in the absence of insurance. With that in mind, the Lord Ordinary’s advice that the prudent employee seeks her own insurance must be correct (especially for any employee that has form of independent wealth).
Having been found liable to indemnify Alliance (as opposed to make a contribution under the 1940 Act) it was inevitable that Mrs McColl’s claim for a contribution from the Health Board would fail (see para.119).
In the end it is accepted that Mrs McColl owed a duty of care to Mrs Bell, that Alliance were vicariously liable for Mrs McColl’s negligence and that the Health Board owed a non-delegable duty to Mrs Bell. But the financial consequences for that negligence (agreed at £700,000) rest solely on Mrs McColl: a result that would not have been avoided had she had no insurance. Whether other employers will be keen to rely on Lister and the new lease of life given to it in Bell only time will tell. Employers that are insured may not, however, have a choice: the ultimate decision will ordinarily rest with their insurer in exercise of their subrogated rights.
But in the meantime, there is much to be said for employees reviewing what insurance cover they have in place themselves.