Judgment has today been handed down by the Court of Appeal (Bean LJ, Vice President; Coulson LJ and Sir Launcelot Henderson) in the case of ABC v Huntercombe (No. 12) Ltd; Active Young People Ltd  and Ors [2026] EWCA Civ. 1161. 

Peter Edwards and John Platts-Mills represented the Claimant/Appellant (ABC).  

The appeal addressed a novel and significant point of law regarding the scope of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") and the transfer of vicarious liability for historic torts.

The Background

The claim arises from historic wrongs suffered by the Claimant while an in-patient at a hospital previously owned by the First Defendant. It is one of 52 claims, which are now due to be case managed by the High Court at a hearing in December 2026. 

The First Defendant subsequently sold their business to the Second Defendant, a transaction to which TUPE applied. The central legal issue was whether the vicarious liability for torts committed by the First Defendant’s employees against a third party (the patient/ABC), and for human rights breaches, transferred to the new owner (the Second Defendant) under Regulation 4(2) of TUPE.

The High Court (HHJ Bird) had held that the alleged vicarious liability did not transfer to the Second Defendant. Permission to appeal was granted by Singh LJ and the matter was heard in the Court of Appeal on 22^nd July 2026. 

Court of Appeal’s Judgment

The Court held that Regulation 4(2), whilst potentially wide enough to cover the transfer of vicarious liabilities (i.e. being ‘in connection with’ employee’s contracts of employment), fell to be construed in accordance with the primary purpose of the Acquired Rights Directive (ARD), which was the safeguarding of the rights of employees (§43). 

The Court further found that the transfer of vicarious liabilities from the transferor to the transferee would not safeguard the rights of employees since the “employer is entitled to recover from the employee a full indemnity for any damages which the employer is obliged to pay out to a claimant as a result of his vicarious liability for the negligence of that employee,” applying the principle established in Lister v. Romford Ice and Cold Storage Ltd [1957] AC 555 (§46). 

Reading Regulation 4(2) in the light of the purpose of the ARD led the Court to conclude that “because the employer’s vicarious liability to a third party [ABC] does not give rise to a right on the part of the employee under the contract of employment and forms no part of the employer’s protection of the employee under that contract, the vicarious liability to a third party does not arise in connection with his or her contract of employment, and so does not pass under Regulation 4(2)(a)” (§51).

The Claimant’s appeal was dismissed on that basis.

The link to the Judgment can be found here.