A High Court ruling that has overturned precedent has changed the liability landscape for organisations with duty of care to vulnerable individuals, where intentional criminal acts have been committed by representatives.
The case of AA (pseudonym) versus the Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle1 has fundamentally reshaped the landscape by finding that organisations may be held directly liable for breach of a non-delegable duty of care when harm to a child was reasonably foreseeable.
Non-delegable duties arise from relationships characterised by vulnerability and an assumption of responsibility. Vulnerable individuals, such as children, are entitled to protection from harm, including intentional misconduct by delegates of the duty-holder.
The ruling expands the scope of liability for non-delegable duties of care beyond negligence and vicarious liability. The ruling expands the scope of liability which could lead to an increased reputational and financial risk exposure, along with an expectation from communities to review and strengthen safeguarding procedures.
Implications of the non-delegable duty of care for organisations: A summary
- The High Court ruling has set a new precedent for non-delegable duties, holding specific organisations accountable for intentional misconduct by their representatives.
- This underscores the importance of safeguarding vulnerable individuals and implementing proactive risk management measures across various sectors.
- Organisations should review their policies, procedures and insurance arrangements to align with the expanded legal obligations to address this critical risk area and potential liability.
How organisations can enhance their safeguarding practices
This landmark ruling is expected to affect non-delegable liability considerations across various sectors, including faith organisations, schools, hospitals, aged care facilities and childcare centres.
The following steps outline a strategic approach for organisations to enhance their safeguarding practices and address these expanded responsibilities.
Review and update safeguarding policies
Implement comprehensive safeguarding measures, including increased supervision of vulnerable individuals, updating mandatory reporting systems and conducting regular audits of safeguarding practices.
Conduct risk assessments
Identify potential risks to vulnerable individuals and implement targeted measures to mitigate them.
Provide training
Ensure all staff and volunteers are trained in recognising and reporting abuse or misconduct, and that this training is documented.
Engage legal counsel
Consult with legal experts to understand the implications of the High Court ruling for your organisation and ensure compliance with the expanded legal obligations.
Insurance considerations for addressing expanded duty of care liability
Insurance coverage for non-delegable duties
Organisations may need to clarify whether legal liability policies cover breaches of non-delegable duties, particularly those involving intentional acts. Some policies may exclude coverage for intentional criminal acts, leaving organisations exposed to financial risk.
Duty to take reasonable precautions
Insurers may require organisations to demonstrate proactive risk management measures, such as safeguarding policies, staff training and regular audits, as a condition for coverage.
Exclusions for intentional acts
Many liability policies exclude coverage for intentional criminal acts. Policy wordings may need adjustment to meet this expanded liability, by offering optional endorsements or clarifying exclusions, for example.
Increased premiums and stricter terms
Insurers are likely to increase premiums for organisations with heightened risk profiles. They may also impose higher deductibles or lower sub-limits of liability for claims involving intentional acts.
Access Gallagher expertise
Protecting your organisation from potential risks is not just about financial security and reputation — it's about upholding the trust and safety of your community, staff and those in your care.
Gallagher offers expertise in this area through:
- Risk review and gap analysis — helping clients understand their risk exposures and the adequacy of their current insurance policies and, more importantly, where there are gaps in cover, providing practical strategies on how these can be managed or mitigated.
- Developing comprehensive safeguarding strategies tailored to the unique needs of each client to help ensure the most effective risk management and safeguarding solutions, fostering secure and resilient environments.
- Technical consulting and claims services, including exposure loss modelling and forecasting and historical claims reviews.
As these risks continue to evolve, staying informed and proactive will be key to navigating the challenges of the future.
Expert contributors: |
||
| Kristopher Marsh Senior Claims Executive | Claims Advocacy |
Samantha McCormack State Manager | Corporate |
Natasha Barker Account Director | Health & Care Practice Leader |