Practice and Procedure


PUBLISHED December 8, 2003

A firm of solicitors was vicariously liable for the conversion of goods committed by one of its employees as he had committed the tort whilst engaged on business of a kind carried on by the firm.Claim by the claimant ('C') for conversion or damage to a reversionary interest in jewellery pawned by him. C owned jewellery, which he pawned in July 1999 to a firm of pawnbrokers. C wished to redeem the jewellery but required ?63,000 to do so. In August 2000 C was introduced to the first defendant ('D1'), a jeweller, by a third party ('K'). D1 was unable to finance the redemption of the jewellery himself but was aware of an individual ('M') who was so able. M was a client of the third defendant, a firm of solicitors ('the solicitors'). M was introduced to the solicitors by the second defendant ('D2'), who had a number of criminal convictions for fraud and deception. D2 informed the solicitors that M wished to finance the purchase of jewellery. The solicitors assisted M in raising the money required. On 23 August 2000 M provided the money to redeem the jewellery and it was given to D1. Two written agreements were made regarding the assignment of the jewellery: the first between C and D1, the second between D1 and a third party who purported to represent M. The agreements dealt with D1's retention of the jewellery with the view to his selling it and how money from the sale would be divided between the parties. In October 2000 D2 requested the jewellery from D1 for a potential sale. D2 presented C with a letter on paper from the solicitors stating that the jewellery would be retained at the solicitors' offices. D1 attempted to contact C to ascertain whether C wished to let D2 have the jewellery. D1 was unable to contact C but was told by K to release the jewellery to D2. The jewellery was released to D2 who subsequently pawned the jewellery, which then disappeared. D2 also disappeared and C obtained judgment in default against him. C brought his claim for conversion or damage to a reversionary interest in the jewellery against: (i) D1 on the basis that he had released the jewels to D2 without authority; and (ii) the solicitors on the basis that D2 was their employee or agent. D1 submitted that he had complied with K's instructions and that K was an agent for C. The solicitors submitted that they did not owe any duty to C as D2 was not an employee nor was he engaged on business of a kind carried on by the firm.HELD: (1) The claim against D1 failed as he had complied with the instructions of K who on the evidence was an agent of C. (2) The claim against the solicitors succeeded. D2 was, on the facts, the solicitors' employee. The solicitors were aware throughout D2's employment that D2 had criminal convictions but had failed properly to supervise D2. D2 had acted as M's representative and D1 had believed that D2 was at the relevant times acting in his capacity as a lawyer. In the circumstances the solicitors were vicariously liable for D2's conversion of the jewellery as the tort was committed whilst he was engaged on business of a kind carried on by the firm. (JJ Coughlan Ltd v Ruparelia & Ors (2003) EWCA Civ 1057 and Dubai Aluminium Co Ltd v Salaam & Ors (2002) UKHL 48 considered).Claim allowed in part.