UK: Vicarious Liability For Data Breach By Rogue Employee

Last Updated: 6 December 2017
Article by Robert Hill and Ruth Bonino

In the first group litigation of its kind, Morrisons Supermarkets was found to be vicariously liable for the actions of a rogue employee who, driven by a grudge against the supermarket chain, took payroll data relating to 100,000 employees and published it online. This was despite the fact that Morrisons was found to be entirely innocent of any misuse, that the employee had acted deliberately to harm his employer, had been convicted and imprisoned for his actions and that disclosure of the data had been done at home, on a Sunday outside office hours. In principle, the decision could mean that Morrisons will be liable to compensate all 5,500 employees involved in the claim. Permission has already been given for Morrisons to appeal the decision to the Court of Appeal.

In January 2014, a file containing personal details of nearly 100,000 Morrisons' employees was secretly and unlawfully posted on a file sharing website by Andrew Skelton (S), an internal auditor. S had been provided with this data as part of Morrisons' annual statutory audit process; he was one of a limited number of employees who had been permitted access to all of the data which was held in a secure internal environment created by proprietary software. Earlier in November 2013, S had secretly copied the data from his encrypted work laptop onto a personal USB.

Later in March 2014, S anonymously sent a CD containing a copy of the data to three newspapers, with a message that the person supplying the information had "worryingly discovered" that the payroll data was available on the web. A criminal investigation and trial ensued where it emerged that S's action had been borne out of a grudge he had against Morissons following a disciplinary process against him earlier in 2013 where S felt he had been unjustly treated. S was convicted in relation to his criminal misuse of the payroll data and was sentenced to eight years in prison. The length of the sentence was partly because of the serious damage his actions had caused to Morrisons.

Immediately after Morrisons discovered the breach, it took action to take the website down and to protect the data and any financial loss which might result from the disclosures. Despite this, 5,500 employees brought a claim on the basis that Morrisons was directly liable for S's act of disclosing the data or, alternatively, it was vicariously liable for S's actions.

Morrisons not directly liable for the disclosure

Dismissing the claim for direct liability for misuse or disclosure of the data, the Court concluded that Morrisons could not reasonably have known that S posed a threat to the employee database, and that the protections it had in place were either sufficient or could not have prevented the disclosures.

Vicarious liability

The Court then turned to vicarious liability and concluded that there was sufficient connection between the position in which S was employed and his wrongful conduct. In coming to this conclusion, the Court said that the question is not whether M did anything wrong, but whether, when S did, his acts were closely connected with his employment.

The following key points arise from the judgment:

  • The Court found there was such a close connection between S's acts and his employment because the disclosure was closely related to what S was tasked to do: his role was to handle the payroll data, receive it, store it for a while, transfer to others and to delete it.By employing S, to carry out the activity, M created the risk of the wrongdoing being committed. When S received the data, he was acting as an employee despite the fact he was covertly intending to copy it when he received it; the fact that the disclosures were made from home on a Sunday did not disengage them from his employment.
  • It didn't matter that M derived no benefit from the wrongdoing. In fact, past cases show that vicarious liability has been established in many instances where an employee's actions have done serious damage to their employer's business reputation.
  • The issue is not so much at whom the conduct was aimed, but rather upon whose shoulders it is just for the loss to fall.Morissons are more likely to have the means to compensate the victim than S and can be expected to be insured.

What this decision means for employers and data controllers

This case has significant implications for all data controllers who use employees or agents to process data. Where individuals can access data, there will always be a risk that data might be mis-processed or even disclosed without authority. The harm caused to an employer from this type of data breach could be substantial, ranging from reputational damage to possible losses suffered by individual employees from identity fraud. Assuming the judgment still stands, and despite the fact Morrisons may have been able to mitigate the Claimants' loss by acting quickly after the breach was discovered, any compensation could include damages for distress even if there is no direct financial loss suffered. A recent claim against the Home Office by individuals whose personal data was disclosed when a spreadsheet was accidentally uploaded illustrates how damages payable for distress are available for data protection breaches (TLT & others v Secretary of State for the Home Department and the Home Office [2016] EWHC 2217).

Data controllers can take precautions to prevent breaches by ensuring the most appropriate and best systems are in place. In this case, Morrisons had taken precautions by limiting access to a few trusted employees, carrying out internal checks to see which of those few authorised "super-users" had access to the data. However, this was not enough to avoid vicarious liability for the actions of an employee who deliberately and criminally disclosed data in order to harm their employer.

This decision only determined Morrison's liability towards the Claimant employees for the data breach. There will have to be another hearing to decide compensation. In the meantime, it seems likely that the decision will be appealed, particularly in view of the Court's concern that by deciding against Morrisons the Court might inadvertently have become an accessory to furthering S's criminal aims of harming his employer.

Various Claimants v WM Morrisons Supermarket PLC [2017] EWHC3113 (QB) - click here to read the judgment

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Baker & McKenzie
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Baker & McKenzie
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions