The Court of Appeal has dismissed an appeal by a former banker who sought to recover over £66m loss of earnings from his employer following his conviction in Romania in connection with work he carried out relating to the privatisation of a state utility in that country: Benyatov v Credit Suisse (Securities) Europe Ltd  EWCA Civ 140. The Court decided that the trial judge’s approach was correct in dismissing both claims advanced by the employee.
First, as to the negligence claim, the employer did not owe the employee a duty of care not to expose him to criminal conviction as a consequence of doing his work in Romania. The correct course for a Court which has to decide whether a duty of care should be recognised in a novel situation is to take the incremental approach endorsed in Robinson v Chief Constable of West Yorkshire Police. That will in principle involve consideration of the three “Caparo factors”, to the extent they are in issue, namely (i) foreseeability, (ii) proximity, and (iii) fairness, justice and reasonableness. The negligence claim was also time-barred.
Second, as to the indemnity claim, the employer did not owe the employee an implied duty to indemnify him for such loss of earnings. The question was whether, notwithstanding the absence of authority, the general indemnity implied into a contract of employment should as a matter of principle extend to cover all losses of any kind suffered by an employee as a result of doing their job, and more particularly a loss of earnings of the kind suffered in this case, irrespective of any fault on the part of the employer. It should not. Specifically, to imply such an indemnity would not be reasonable or fair nor would it balance the competing policy considerations.
The judgment is available here.
Paul Goulding KC represented the defendant, Credit Suisse (Securities) Europe Ltd (leading Paul Skinner and Emma Foubister, instructed by Cahill Gordon & Reindel (UK) LLP).