In Hughes (Respondent) v Rattan (Appellant) [2022] EWCA Civ 107, the Court of Appeal was asked to determine whether the Defendant (the former owner of a dental practice and GDS contact holder) was liable for the treatment provided to the Claimant (a patient) by three self-employed dental associates.

Read on for a summary of the case and judgment, including what the decision means for healthcare providers.

Background

The High Court determined that the Claimant was a patient of the practice and that the Defendant was liable on the basis that he owed the Claimant a non-delegable duty of care and that he was vicariously liable for the associates. The Defendant’s retention of control over how his obligations to the Claimant were performed was at the crux of the Court’s decision on both issues. He could choose whether to provide the dental services himself or by an associate. Although the Claimant could request a certain practitioner, she could not insist upon it. The Defendant appealed.

The Court of Appeal’s decision

Non-delegable duty

The Court of Appeal agreed that the Claimant was a patient of the practice and that she was in the Defendant’s actual care as owner of the practice. The Claimant had no control over how the Defendant chose to perform his obligations, whether personally, through employees of third parties. The appeal on this ground was dismissed.

Vicarious liability

The central plank of the appeal on this ground was that the Judge had failed to take into account and give appropriate weight to all the factors consistent with the associates being independent contractors. Applying the “critical question” from the Supreme Court decision in Barclays Bank [2020] UKSC 13 of whether the relationship between the Defendant and associates was “sufficiently akin to employment”, the Court determined that it was not, based on the following factors:

• The associates were free to work at the practice for as many or as few hours as they wished and were free to work (and in some cases did work) at other practices.
• The Defendant had no control over their clinical judgment or the way they carried out treatment.
• The associates chose which laboratories to use and shared the cost of them.
• They were responsible for their own tax, NI, professional clothing and development and a share of the bad debts.
• They were responsible for their professional indemnity insurance and had to give an indemnity to the Defendant against any claims made against him in respect of their treatment.
• There was no discipline of grievance procedure.

The appeal was allowed.

It is not known whether an appeal will be made to the Supreme Court and, even if it is, whether the Supreme Court will have the appetite to revisit the issue so soon after the Barclays judgement.

What this means for you

The potential reach of this decision is wider than the sole owner of a dental practice. On the issue of non-delegable duty, Bean LJ (who gave the leading judgment) would have considered the Claimant to have been in the Defendant’s actual care had the practice been run by a company or partnership.

The decision may have ramifications for providers in the wider healthcare sector. We could see more of these cases as the private sector plays a role in ‘Covid recovery’, but the outcome is likely to depend on the precise structure of the relationship. In particular, cases where the hospital providing the facilities is the only legal body with adequate insurance cover (because the surgeon has inadequate or no cover at all), could be under the spotlight once more such as in the Spire v RSA / Patterson litigation. The Privy Council is due to consider the issue in the case of Gulf View Medical Centre Ltd v Tesheira later this year and this could provide further analysis.

Until then, healthcare organisations engaged in this work (on either side of the contract) will need to consider contract terms and indemnity provision carefully, in particular any variation to the NHS standard contract.  Read our insight on the legal and practical considerations for vicarious liability and indemnity arrangements, including our top tips on dealing with this issue.

How Capsticks can help

Capsticks aims to be the firm of choice for private health providers and their insurers, advising on all aspects of indemnity, insurance coverage and claims.

If you have any queries around what's discussed in this article, and the impact this may have on any insurance policies you are involved in, please speak to Majid Hassan, Ed Mellor or Sarah Bryant to find out more about how Capsticks can help.