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LAW OF TORT

Vicarious Liability
Diploma in Legal Executive Studies
 CAUTION!
Vicarious Liability is NOT a cause of action.
i.e.
You CANNOT sue a person for vicarious liability.

Vicarious liability is a form of secondary liability

premised on the primary liability of the employee.
Under vicarious liability, the employer and employee are
jointly liable for the tort committed by the employee. 2
 Consider this situation
Ah Soh is a cleaner at SGH. She is trained to place
a “CAUTION: WET FLOOR” sign whenever she
mops the corridors. Unfortunately, on a particular
day, she neglects to display the sign while
mopping and as a result, a hospital guest slips and
falls, injuring his back.
If the guest wants to sue for his injuries, whom
would he name as defendant/s?
Short ans: It depends! Depends on what? 3
 Vicarious Liability
The employer-employee relationship is the most
common form of relationship which gives rise to
vicarious liability in tort, and will be our focus.
An employee commits a tort
in the course of employment
= employer is also liable for it
Note:
Primary liability has first to be established against
the employee before vicarious liability can be 4
established against the employer.
 Rationales* for vicarious liability
• Employer has deeper pockets.
• Employer is empowered to select the employee and
control the tasks performed by the employee. Thus,
imposing vicarious liability will encourage the employer to
take greater care to reduce the risks of harm.
• Employer stands to benefit from the employee’s work and
hence should also bear the potential liabilities.
• Employer is more able to insure against liabilities arising
from legal actions by third parties and spread the losses
more efficiently.
*NOTE: These are NOT the reasons to sue.
These are merely the justifications for such a concept. 5
It would be most unfair for the law to hold someone liable
just because they are financially more able to bear the loss.
 Vicarious Liability
On the surface quite a straight forward concept:
employers are liable for what their employees do in
the course of their employment.
BUT …..
What happens if what the employee does was:
• Done with no regard to safety at all?
• Against specific instructions of the employer?
• In itself an illegal act?

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 Rose v Plenty [1976] 1 WLR 141
• A milkman (against company orders) took a 13-year-
old boy to help him on his round; the boy was injured
through the milkman's negligent driving. The boy sued
both the milkman and the dairy company. The English
Court of Appeal found the dairy vicariously liable for
the boy's injuries. The boy was actually helping to
deliver the milk, and so the driver's action was an
unauthorised way of performing his duties.
Century Insurance v NI Road
Transport [1942] 1 AER 491
• Careless act of delivery driver lighting a match to light a
cigarette and throwing it on the floor while transferring 7
petrol from a lorry to a tank was held to be in the scope
of employment. Vicarious liability applied.
 KEPPEL BUS CO. v SA’AD BIN AHMAD
[1974] 1 MLJ 191
• Facts: Bus conductor was rude to an elderly passenger. When
plaintiff interjected, bus conductor verbally abused him and
threw ticket punch at him injuring him in his left eye.
• Singapore CA (1974) - though the action of the bus conductor
was not authorized, nevertheless, as he was acting in the
course of his employment as a bus conductor, the bus
company was vicariously liable for the injury caused.
• Privy Council reversed the decision - action of the bus
conductor was found to be so unconnected with what he was
authorized to do as part of his job as a bus conductor, they
were considered to be actions that were completely
independent of the bus company. Therefore, no vicarious 8
liability on the part of the bus company.
 Vicarious Liability
• If an employee were on a frolic of his own,
during which a tort is committed, the
employer would not be liable.
• Storey v Ashton (1869) LR 4 QB 476 -
defendant's servants, while delivering wine from a
cart, went off on an errand of their own (to visit a
relative) and negligently ran over the plaintiff.
• Court held the defendant/employer was not liable
9
 Vicarious Liability
Breaking the concept down:
An employee commits a tort
in the course of employment
= employer is also liable for it
So …..
• Establish that tortfeasor was an EMPLOYEE
• The tortious act (negligence, trepass, defamation
etc. etc. etc.) was done in the course of the
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EMPLOYMENT
 Who is an Employee?
Consider these two situations.
Who would be an employee? Why?
a) A waiter working at CoffeeClub is paid a monthly
salary, CPF contributions and medical benefits.
b) A freelance journalist contributes articles to
different monthly and bi-monthly sports
magazines and is paid whenever his articles are
published.
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 Who is an Employee?

• Employer-employee (contract of service)

Distinguish from
• Independent contractors (contract for services)

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 Who is an Employee?
Courts have used various tests to
distinguish the two

Note:
• These tests are not exclusive
• They are just a way by which courts
arrive at sound, objective results
Consider these cases…. 13
 Who is an Employee?
3 tests used to distinguish the two
(1) The control test - the degree and extent of
control by employer over employee’s work e.g.
does employer control when, how, how fast, how
many etc etc etc.
• The more the control the more the relationship to be
regarded as a contract of service or an employer-employee
relationship.

• The control test however, may be inadequate in some cases,

such as when an employee is a professional, or a person with
some particular skill and experience; in such cases, an 14
employer may not be able to tell him how to do the work.
 Who is an Employee?
3 tests used to distinguish the two
(2) The integration test -
• How much a part of the business/company is the person’s
work? If integral to the business/company = employee. If done
for the business but not integrated, only accessory to it =
contract for services/independent contractor.
• Difficult test to apply – how to determine whether a person is
part of an organization?

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 Who is an Employee?
3 tests used to distinguish the two
(3) The personal investment in enterprise test:
• Is the person performing the services performing them as the
business/company or his own account?

• Considerations to be taken into account include: whether the

person performing the services provides his own equipment,
whether he fires his own helpers, what degree of financial risk
he takes, what degree of responsibility for investment and
management he has, and whether and how far he has an
opportunity of profiting from sound management in the
performance of his task.
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 Who is an Employee?
3 tests to use to distinguish the two

(1) The control test

(2) The integration test
(3) The personal investment in enterprise test

Application of the 3 above are not exclusive nor are they

without difficulties. Everything has to be considered in
their totality.

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 “In the Course of Employment”
“A master is not responsible for a wrongful act done by
his servant unless it is done in the course of [the
servant's] employment. It is deemed to be so done if it is
either
• (1) a wrongful act authorised by the master, or
• (2) a wrongful and unauthorised mode of doing some
act authorised by the master.”
John William Salmond,
The Law of Torts
(Stevens & Haynes, 1907)
In other words, employer is responsible as long as
the ACT is authorised, even if act is wrong or 18

wrongly done …….

 “In the Course of Employment”
But what if the act was
INTENTIONALLY wrong
e.g. a fraud?
Should employer still be held liable?
It is often difficult to consider a deliberate act by an
employee to commit a tort (and thereby contravene the
terms of his employment) as an ‘unauthorised’ mode of
doing something authorised by the employer, even though
justice demands, under certain circumstances, that the
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employer should be made liable.
Skandinaviska Enskilda Banken AB …
v Asia Pacific Breweries (S) Pte Ltd …
[2011] 3 SLR 540

CHIA, Finance Mgr

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Skandinaviska Enskilda Banken AB …
v Asia Pacific Breweries (S) Pte Ltd …
[2011] 3 SLR 540
• Chia, finance manager of Asia Pacific Breweries (S) Pte
Ltd (“APBS”) committed an elaborate fraud over a period
of more than four years
• Purporting to act on APBS’s behalf, Chia requested SEB to
offer various credit facilities to APBS.
• He then accepted the Credit Facilities in APBS’s name and
gave the banks forged resolutions documenting APBS’s
acceptance of the Credit Facilities.
• On discovery of the fraud, SEB sued APBS as the 21
employers of Chia, in an attempt to recover from APBS
the losses occasioned by the fraud.
 Skandinaviska …
The Vicarious Liability Issue
• the “close connection” test, ie, whether the tortious
conduct of Chia was so closely related to his
employment that it was fair and just to hold APBS
vicariously liable for such conduct.
• The test applied regardless of whether the wrongful act
in question was intentional or inadvertent; also
covered cases of fraud.
• What the court had to do in each case was to examine
all the relevant circumstances – including policy
considerations – and determine whether it would be
fair and just to impose vicarious liability on the 22
employer.
 Skandinaviska …
CA applying the “close connection” test held
it was not fair and just to hold APBS
vicariously liable for Chia’s fraud because :
(a) the fraudulent acts of Chia, who had very limited
financial authority as APBS’s finance manager,
were not connected with his employment at all;
(b) it was not reasonable to hold that APBS should
have contemplated that there was a risk of Chia
defrauding third parties (such as the Appellants)
whom he had no authority to deal with as APBS’s
finance manager; 23

……
 Skandinaviska …
……
(c) SEB, far from being vulnerable victims, had all the
means and resources to protect themselves from
Chia’s fraud, and were much more to blame than
APBS for the successful perpetration of the fraud;
(d) SEB, being banks, should be held to a higher
standard of financial prudence and responsibility
(especially in relation to fraud prevention) as
compared to trading companies such as APBS; and
(e) Chia’s fraud did not further APBS’s aims and was
not related to anything inherent to APBS’s business 24
 “In the Course of Employment”
Singapore CA - the “close connection” test is
• intellectually satisfying and
• practical criterion for all torts committed by an
employee
• the test imposes vicarious liability only when it
would be fair and just to do so and, moreover,
provides a workable concept, namely, a
sufficiently close connection, for determining in
each case whether imposing vicarious liability
would be fair and just. 25
 “In the Course of Employment”
Singapore CA:
• the close connection test requires the court to openly
confront the question of whether liability should lie
against the employer, rather than obscuring the
decision beneath semantic discussions of 'scope of
employment' and 'mode of conduct'.
• Under the close connection test, what the court has to
do in each case is to examine all the relevant
circumstances - including policy considerations - and
determine whether it would be fair and just to impose
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vicarious liability on the employer.
 “In the Course of Employment”
Singapore CA further highlighted:
• two policy considerations underlying the doctrine
of vicarious liability, namely:
(a) effective compensation for the victim – “the
employer is usually the person best placed and
most able to provide effective compensation to
the victim. In our view, making the employer
vicariously liable is not only a practical solution,
but also fair and just.”
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 “In the Course of Employment”
(b) deterrence of future harm by encouraging the
employer to take steps to reduce the risk of similar
harm in the future - this “… rests on
the fundamental premise that the employer is best
placed, relative to everybody else, to manage the
risks of his business enterprise and prevent
wrongdoing from occurring.”

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Questions?

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 E R ?
B O N
Consider
M T I this situation
E
M TU A
E
R SI
Ah Soh
I S is a cleaner at SGH. She is trained to place
H
aT“CAUTION: WET FLOOR” sign whenever she
mops the corridors. Unfortunately, on a particular
day, she neglects to display the sign while
mopping and as a result, a hospital guest slips and
falls, injuring his back.
If the guest wants to sue for his injuries, whom
would he name as defendant/s?
Short ans: It depends! Depends on what? 30
Can you now answer the qtn?
Depends on what?

31
In the light of Skandinaviska
decision, consider these cases:

Andy was a security officer stationed at the TP

library. He wears a uniform with the name and
logo “VSSM” emblazoned on it. The company
Very Safe Security Management Pte Ltd holds the
current security contract with TP.
In view of recent acts of hooliganism on TP
campus, TP has directed VSSM to be more
forceful in controlling violent incidents happening
32
on campus.
In the light of Skandinaviska
decision, consider these cases:
2 students entered into a scuffle over a
mobile phone, just outside the entrance to
the library. Andy tried to separate them to
no avail. In the end he pulled both arms of
one of the students and pinned them
behind the student’s back but it was done
with so much force that he dislocated both
arms from the student’s shoulder.

Would either TP or VSSM be vicariously 33

liable for Andy’s actions?