The judgment, by a majority of four UK Supreme Court judges to one, extends the doctrine of vicarious liability to local authorities in respect of the actions of foster carers for the first time, and will "raise the spectre of [further extensions] to come", according to Craig Connal QC of Pinsent Masons, the law firm behind Out-Law.com.
"It was not long ago that vicariously liability - importantly, liability imposed on someone who is not themselves at fault in any way - was probably regarded as a backwater, only arising in a very limited number of cases around the employment relationship," he said. "It was governed by strict limitations not to be readily extended."
"In recent times, extension has been the name of the game. Extension of liability to local authorities in respect of acts of foster carers continues that trend and will raise the spectre of more to come, in public law and elsewhere. The detailed judgment repays careful reading - but in an age when the legal structures used in all walks of life to get things done are many and varied, liability may yet fall on more parties than currently expect it," he said.
Natasha Armes was taken into care by Nottinghamshire County Council in 1985, when she was seven years old. A High Court judge found that Armes had been physically and emotionally abused by a foster mother, a Mrs Allison, during a placement at the home of Mr and Mrs Allison between March 1985 and March 1986. The judge also found that she had been sexually abused by a Mr Blakely during a placement at the home of Mr and Mrs Blakely between October 1987 and February 1988.
In each case, the abuse took place in the foster home in the course of Armes' day to day care by the relevant foster parents. There was no case that the local authority had failed to exercise reasonable care when selecting the foster parents, or when supervising and monitoring the placements. Rather, Armes argued that the local authority was responsible for the conduct of the foster parents, either on the basis of vicariously liability or on the basis of a non-delegable duty of care. Both arguments were rejected by the High Court, and by the Court of Appeal.
Giving the majority judgement of the Supreme Court, Lord Reed said that vicarious liability could only arise where the relationship between the party committing the harm and the one being held liable had "particular characteristics justifying the imposition of such liability". The classic example is the relationship between employer and employee, but previous case law has expanded this to cover relationships with "similar" characteristics "subject to there being a sufficient connection between that relationship and the commission of the tort in question".
In this case, the local authority was under a statutory duty to care for children who had been committed to its care. In order to discharge that duty, it "recruited, selected and trained persons who were willing to accommodate, maintain and look after the children in their homes as foster parents", inspected their homes, paid allowances to them and provided training and equipment, met with them regularly and were involved in decision-making concerning the children.
"In the light of these circumstances, the foster parents with which the present case is concerned cannot be regarded as carrying on an independent business of their own: such a characterisation would fail to reflect many important aspects of the arrangements," Lord Reed said.
"Although the picture presented is not without complexity, nevertheless when considered as a whole it points towards the conclusion that the foster parents provided care to the child as an integral part of the local authority's organisation of its child care services ... It is impossible to draw a sharp line between the activity of the local authority, who were responsible for the care of the child and the promotion of her welfare, and that of the foster parents, whom they recruited and trained, and with whom they placed the child, in order for her to receive care in the setting which they considered would best promote her welfare," he said.
The local authority's ability to exercise "powers of approval, inspection, supervision and removal without any parallel in ordinary family life" meant that foster parents could not be regarded as being in "much the same position as ordinary parents", Lord Reed added.
The judge said that there was no evidence that imposing vicarious liability in these circumstances would encourage local authorities to place children into residential homes, rather than with foster parents. Local authorities were already vicariously liable for the abuse of children by their employees in residential care homes by virtue of the employment relationship, he said.
The court did, however, reject the argument that the local authority was liable on the basis of a non-delegable duty.
In a dissenting judgment, Lord Hughes said that the courts could not extend vicarious liability to cases involving 'ordinary' foster parents without doing the same to cases involving placements with friends and family in a way that would be "fair, just or reasonable". He added that care provided in the setting of a foster family was "not consistent with the kind of organisation which the enterprise test of vicarious liability contemplates". It also introduced the likelihood of claims for negligent acts or omissions, as well as for deliberate wrongdoing or abuse, he said.
Connal said that the repercussions of the decision would be "an area to watch".
"Although the litigation focussed on abuse cases there may be something to be said for the lone dissenting voice of Lord Hughes, who pointed out that once one decides that vicarious liability applies there is a much larger range of cases in prospect, based not on deliberate abuse but asserted negligence," he said.