• On 8 September 2026, the Court of Appeal held that TUPE Regulation 4(2)(a) must be read in light of the EU Acquired Rights Directive, whose purpose is to protect and ensure the continuity of employee rights upon a change of employer.
• TUPE is legislation that exists to benefit employees. It does not enable third parties to pursue transferees (in this case, Active Young People Limited) for the transferors’ (in this case, Huntercombe (No. 12) Limited) pre-transfer liabilities.

In ABC v Huntercombe (No.12) Limited and Others, the Court of Appeal considered whether non-employee third parties who had claims against the transferor, Huntercombe (No. 12) Limited, could benefit from the principle of transferred liability so that they could claim against the transferee, Active Young People Limited.

It held that the transferor’s vicarious liability to a third party for the tortious acts of its employees does not transfer to the transferee under Regulation 4(2)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The court dismissed an appeal by a former psychiatric patient (ABC) of Huntercombe Manor Hospital, who argued that the hospital’s vicarious liability for alleged abuse by its employees had transferred from Huntercombe to the transferee (Active Young People Limited), following a TUPE transfer of the hospital business in March 2021.

Background

ABC claimed that during a four-month stay at Huntercombe Manor Hospital between 2018and 2019, she...

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