Vicarious liability and indexation of economic loss damages: Can a footy club be vicariously liable for its volunteer?

A Victorian Supreme Court jury found that a sporting club breached its admitted general duty of care to take reasonable care to avoid foreseeable risks of injury of which it knew or ought to have known to persons who attended the club’s premises.

It found that the club ought to have known of the risk of a child spectator being sexually abused by a volunteer and awarded significant damages to the plaintiff. In doing so, the Court held that past economic loss should be indexed in order to address inflation. However, the Court held that the football club was not vicariously liable for a volunteer where there was no control or interconnectedness between the club and the volunteer. This article focuses on the vicarious liability aspect of the decision.

In issue

In this jury trial, Justice Richards was asked to make summary judgment as to:

• whether the principle of vicarious liability may apply to the relationship between volunteer and sporting club;
• whether there was sufficient evidence on which a jury could reasonably award aggravated or exemplary damages;
• whether damages for past loss of earnings should be indexed to account for inflation; and
• the appropriate discount rate for future economic loss.

The background

The plaintiff regularly attended the Western Oval as a spectator at Footscray Football Club’s (the club) training and games in the 1980s as a young teenager, as he lived close by to the oval. At the oval he met Mr Hobbs, a volunteer at the club.

The plaintiff claimed damages from the club for injuries, loss and damage for sexual abuse by Mr Hobbs between 1984-1989. The abuse predominantly occurred on game days at the oval and in the club’s offices.

Justice Richards’ decision

Vicarious Liability

The plaintiff submitted that Mr Hobbs was a ‘well known and special volunteer’ at the club. The plaintiff relied on the recent decision of Bird v DP (2023) 69 VR 408 (Bird), where it was held that vicarious liability may apply in respect of a relationship which is not that of employment. Features taken into account in determining whether performance of Mr Hobbs’ volunteer role gave the occasion for abuse included: authority, power, trust, control and the ability to achieve intimacy with the victim.

Mr Hobbs would provide the plaintiff with free tickets to games and also handled club money. During the 1980s Mr Hobbs was on the fundraising committee and assisted the Under 19s team. The club had no list of volunteers and no written policies concerning volunteers.

In distinguishing the facts from Bird and finding that there was no reasonable basis for a vicarious liability finding in this case, Justice Richards held:

1. the relationship between a diocese and priest as in Bird is not a general invitation to paint other non-employment relationships with the brush of vicarious liability;
2. Mr Hobbs’ role was informal, undocumented and uncertain, with little control exerted over Mr Hobbs by the club;
3. although Mr Hobbs was well known at the club, his work could not be said to be so interconnected with the club that he was conducting the club’s business;
4. Mr Hobbs did not wear a uniform or any garments associated with the club; and
5. the club did not bring the plaintiff into contact with Mr Hobbs in any way; the plaintiff was merely a spectator at the oval.

Aggravated & Exemplary Damages

The plaintiff sought aggravated damages on the basis that the club had not reached out to him at the time of Hobbs’ criminal proceedings in the 1990s with respect to the plaintiff. Justice Richards found it was impossible to characterise the club’s lack of response to the plaintiff as malicious, insulting or high-handed such as to justify an award of aggravated damages. More particularly there was no evidence that anyone at the club knew the identity of the plaintiff as being the complainant in the criminal proceedings, or of his existence at all, until 2022.

The plaintiff also sought exemplary damages on the basis that a former player told a finance manager of the club that Mr Hobbs was a 'dirty old man' in 1981, prior to the alleged abuse of the plaintiff. Her Honour held that this suggestion was a factor toward negligence only and was not sufficient to establish a deliberate, intentional or reckless disregard of the plaintiff’s welfare such as to justify an award of exemplary damages.

Indexation of Past Losses & Discount Rate for Future Losses

As in many cases of this nature, the plaintiff’s economic loss extended back over several decades. Her Honour held that to achieve the cardinal concept of compensation, that is, to place the plaintiff in the same position he would have been in if the tort had not been committed, past loss of earnings ought to be indexed for inflation so damages assessed 'in today’s money would reflect the value of past losses.'

Her Honor also confirmed that the correct discount rate for future losses was 3%, consistent with the ruling in PCB v Geelong College [2021] VSC 633.

The jury verdict

In accordance with Her Honour’s findings, it was not open for the jury to find the club was vicariously liable or to make an award for aggravated or exemplary damages. The jury was otherwise directed to assess past economic loss with indexation applied and a discount rate of 3% for future economic loss.

The jury ultimately found negligence on the part of the club and assessed damages of $3,250,000 for pain and suffering, $2,605,578 for economic loss and $87,573 for future medical and related expenses.

Implications for you

1. Vicarious liability may arise where there is control by a principal over a tortfeasor, and an interconnectedness between them. If an entity has little control over a volunteer, then it arguably cannot be vicariously liable. This judgment is therefore a further reminder of the complexity and nuances of vicarious liability in the institutional liability space, and the need to closely assess the specific circumstances in each case.
2. The finding that past economic loss is to be indexed for inflation may see a significant increase in the quantum of historical abuse claims.
3. Despite no award of aggravated or exemplary damages, the jury’s verdict (which is understood to be on appeal) establishes the new high watermark for damages in this space.