Lister and Others v. Hesley Hall Limited

Factual and Procedural Background

Between 1979 and 1982 the Appellants, then boys aged 12‒15, lived in a residential unit (“the Boarding House”) attached to a special school (“the School”) operated for profit by Company A. The Boarding House was run almost exclusively by an employee (“the Warden”) and his wife. During this period the Warden systematically sexually abused the boys. He was later convicted and imprisoned.

In 1997 the Appellants sued Company A for personal injuries, alleging (i) negligence in the selection/supervision of the Warden and (ii) vicarious liability for the Warden’s assaults. At first instance Judge Walker dismissed the negligence claim and, constrained by the Court of Appeal authority in Trotman, rejected vicarious liability for the assaults themselves, though he imposed liability for the Warden’s failure to report his own misconduct. The Court of Appeal, bound by Trotman, overturned that limited finding and entered judgment for Company A. The House of Lords granted leave to appeal.

Legal Issues Presented

1. Whether an employer can be vicariously liable for intentional sexual assaults committed by an employee on children placed in the employee’s care when those assaults are closely connected to the employee’s duties.
2. If the first issue were answered negatively, whether liability could nevertheless arise from the employee’s failure to report his misconduct to the employer.

Arguments of the Parties

Appellants' Arguments

• Invoked the “close connection” test articulated by the Supreme Court of Canada in Bazley v Curry and Jacobi v Griffiths, asserting that the assaults were inextricably linked to the Warden’s employment because he was entrusted with the boys’ daily care and discipline.
• Urged the House to overrule Trotman v North Yorkshire County Council, contending that its narrow reading of the Salmond test was inconsistent with principle and authority.

Respondents' Arguments

• Relied on Trotman to argue that sexual assaults are necessarily outside the course of employment because they are a “negation” of the employer’s duty of care.
• Contended that, at most, the failure to report wrongdoing might fall within the scope of employment, but that such liability could not exist if the employer was not first liable for the assaults themselves.

Table of Precedents Cited

Court's Reasoning and Analysis

The House, comprising Judge Steyn, Judge Clyde, Judge Hutton, Judge Hobhouse, and Judge Millett, engaged in a two-stage analysis:

• Doctrinal Re-assessment. The Lords reviewed a century of authority, concluding that rigid adherence to the Salmond formulation (“unauthorised mode of authorised act”) can mislead when dealing with intentional wrongdoing. They emphasised Salmond’s own gloss that liability arises where the tort is “so connected” with authorised acts that it may properly be treated as a mode of performing them.
• Rejection of Trotman. The Court of Appeal in Trotman had focused narrowly on the sexual acts, treating them as a complete negation of the employee’s duties. The Lords held that such semantic focus ignores the broader reality: Company A undertook to protect vulnerable children and delegated that very duty to the Warden; the abuse occurred on the employer’s premises, during working hours, in the performance of caregiving functions. The connection was therefore “very close.”
• Adoption of “Close Connection” Test. Guided by Canadian jurisprudence, the Lords held that vicarious liability depends on whether the tort is so closely linked to the employment that it is “fair and just” to impose liability. The intimate residential setting, the Warden’s authority, and Company A’s knowledge of inherent risks in boarding environments satisfied that test.
• Alternative Reporting Argument. Having imposed liability for the assaults themselves, the Lords found it unnecessary to rule on the fallback contention that the Warden’s failure to report also grounded liability, though Judge Steyn left open the possibility that such an argument might succeed in other factual settings.

Holding and Implications

APPEAL ALLOWED. Judgment on liability entered for the Appellants; damages to be assessed.

By overruling Trotman and embracing the “close connection” approach, the House of Lords aligned English law with leading Commonwealth authority, confirming that employers may be vicariously liable for deliberate criminal acts—including sexual abuse—where those acts are closely bound up with the duties entrusted to the employee. The decision imposes no new negligence standard on employers but reallocates risk to those who create enterprises that inherently depend on the exercise of trust and power over vulnerable persons.