Vicarious Liability

Learning Outcomes
•Understand vicarious liability;
•Understand the rationale behind vicarious liability;
•Know what has to be established by the claimant for an employer to be held
vicariously liable;
•Understand circumstances when an employer could be held vicariously liable for the
torts of an employee
Introduction
• Usually, we see that a person is not liable for the acts done by the other person.
• However, under the law of torts, a person can be held liable for another person.
• Also, for this person to held accountable for the act of the other person, it is
necessary that there exists any form of relationship between the person who is
accused and the other person.
• In short, there must be some sort of connection between these people.
Introduction to Vicarious Liability
• Vicarious liability is where one party is held liable for the torts of another. It arises
because of a specific relationship between the parties. ‘Vicarious’ means ‘on behalf of
another’.
• Vicarious liability can arise in other situations than employer/employee relationships,
e.g. principal/agent, parent/child, liability of a firm for the torts of partners.
• It is most commonly based upon the employment relationship making the employer
liable for the acts of the employee.
• Vicarious liability is not a tort itself but a determination of who is potentially liable;
it’s a way of suing someone else other than the tortfeasor.
• Vicarious liability is strict liability; there is no need to show fault on part of defendant
(employer) - employer will be strictly liable, even in absence of fault.
• vicarious liability is a form of secondary liability;
o Primary liability: When D is held liable for his own wrong doing. For example, the
employer themselves is at fault – direct liability = employers’ liability.
o Secondary liability = vicarious liability, when suing someone else other than the
tortfeasor.
• An employer can be sued both directly and vicariously for the same event.
• Where vicarious liability applies, the Defendant and the Tortfeasor are treated as
joint tortfeasors, which means that the claimant can choose to sue both or either of
them; the employer is treated as if they have committed the tort.
• In reality, the party sued is often the one in the best position financially to meet any
judgement.
Background and Justification
• Vicarious liability is not a tort in it’s own right but a rule of responsibility which
renders the defendant liable for the torts committed by another; it is essentially a rule
of convenience.
• It does not mean that the tortfeasor is not personally liable for his negligence, but
that the claimant has a choice to sue be the tortfeasor or his employer.
• why should the employer be sued instead of the employee?
1) ‘Deep pockets’ argument: Employer in better financial position to pay
compensation-- has deep pockets (will most likely be insured, thus he will be able to
pay).
2) Employer exercises both control and supervision over its employees.
3) An employer may be careless in selecting negligent employees and should suffer
the consequences thereof;
4) Benefit/burden theory: Benefits and burdens of employees. Employer should have
the burden if they have the benefit. The employer gets benefit from employee’s
actions, so should bear burden if goes wrong.
5) High standards—employers will make efforts to see that employees don’t commit
torts, will encourage high standard of care.
6) Vicarious liability encourages better training, supervision and control of employees.
7) Loss distribution – the loss is borne by a large section as opposed to just the
tortfeasor i.e. the employer, insurance company, clients of the insurance company
who pay premiums.
Structure for a vicarious liability claim
• To establish vicarious liability against an employer, the claimant must show all the
following:
1) A tort has been committed by another (X)?
2) X is an employee of the Defendant (D) being sued.
3) The tort was committed in the course of employment
A tort has to be committed
1. A Tort has to be committed by another (X)
• If there is no tort committed, then no vicarious liability.
• In a vast majority of cases, the tort committed is negligence.
• Torts (on syllabus) that can be committed vicariously:
o Trespass torts, Battery, Assault, False imprisonment, Negligence, Defamation, Libel,
slander.
• The claimant must therefore prove that the employee’s conduct satisfies all the
elements of the tort in question.
• If the employee enjoys immunity from lawsuits by merit of their personal status,
their employer will not receive the same protection.
• This principle is best understood by reference to the case of Broom v Morgan
[1953] 1 QB 597.: The claimant was employed alongside her husband to run a pub.
o She was injured in an act of negligence by her husband. At the time, husbands and
wives could not sue each other in tort and so the defendant denied vicarious liability
(since the husband could not be sued by his wife, primary liability did not exist, and
so the employer argued secondary liability could not exist.)
HELD: The courts rejected this argument, holding that the spousal immunity was from
being sued, rather than being held responsible for a tort. Since the husband was not
the one being sued, the immunity did not apply.
The employer/employee relationship must exist
2. X is an employee of the defendant—the employment relationship
o The courts draw a distinction between employment (contract of service) and an
independent contractor (contract for services).
o Vicarious liability will not generally arise in a contract for services (not responsible
for actions of independent contractors).
o For example, the driver you hire is your servant. You can give me advice as to how
to drive the car and give him directions. While the taxi driver in this scenario will be
the independent contractor. Thus, you can only tell the direction to the taxi driver but
you cannot order him. One will therefore not be liable for the torts of the independent
contractor (Taxi driver).
• A number of factors can be identified as important to the courts in distinguishing
between contracts of employment and contracts for services.
• It is fair to state that each case is decided on a fact by fact basis
Who is an employee?
Three main tests are used to answer the question:
1. control test;
2. integration test;
3. economic reality/multiple factors test.
1) Control test - In the past, the control test was the primary indicator used by the
courts (original test).The Control Test asks who, exactly, is in control of the individual’s
work – who dictates who;
o Employees tend to have the nature of their task dictated specifically by their
employer (independent contractors tend to have more personal control).
o The source of the control test can be found in Yewen v Noakes [1880] 6 QBD
530 - The courts held that “the occupier was not an employee, since he was not ‘a
person who is subject to the command of his master as to the manner in which he
shall do his work.”
• CAUTION: Today, there are many employment situations which don’t come under
the Yewen definition, particularly where the employee is acting with a high level of
skill.
• A hospital trust will employ many surgeons and doctors, but is hardly well placed to
tell someone how to carry out brain surgery or deliver a baby.
• in modern case law this test lost favour as the sole determinant of an
employer/employee relationship - Market Investigations v Minister of Social
Security [1969] 2 QB 173 - – Cook J : ‘…control will no doubt always be considered
although it can no longer be regarded as the sole determining factor.’ The reason for
that is because the courts were recognising a lot of situations where the employer
doesn’t control the employees work, some employees are specialist in their fields, and
employers don’t tell them how to do their job.
• Read - Cassidy v Ministry of Health (1951) 2 K.B 343, CA
2. Integration/Organisation Test
o Distinguishes between people who sign contracts of service and those who contract
to provide services.
o Employees tend to do work which is integral to the business’s operations, whilst
independent contractors tend to do work which is ancillary to the main functions of
the business.
o See: Stevenson, Jordan & Harrison Ltd v MacDonald & Evans [1952] 1 TLR
101: 16. o “One feature which seems to run through the instances is that, under a
contract of service, a man is employed as part of the business; whereas under a
contract for services, his work, although done for the business, is not integrated into
it, but is only accessory to it.” - Lord Denning, at 111. Stevenson, Jordan & Harrison
Ltd v MacDonald & Evans
3. ’Economic reality’ test (more modern, practical approach)
• Sometimes referred to as the ‘multiple test’ or the ‘pragmatic test’.
• It involves examining the characteristics of the subject’s work arrangements against
a checklist of signs of conventional employment.
• The test appears in Ready Mixed Concrete Ltd v Minister of Pensions. [1968]
2 QB 497 – in casu, the claimant hired a number of drivers to deliver concrete, paying
the drivers a fixed rate per mile. These drivers were named in their contracts as
independent contractors. The drivers used vehicles which they had purchased from
the claimant in order to do this. The vehicles had to be painted in the claimant’s
company colours, had to bear the company’s logo, and was obliged to present their
accounts in a special manner dictated by the claimant. The drivers also had to wear
the company’s uniform. The drivers were responsible for maintaining the vehicles and
had flexible working arrangements. They could even, if they so wished, employ a
competent driver themselves to carry out the work on their behalf.
o The question arose as to whether the drivers were employees of the claimant or
not. The court ruled that the drivers were not employees.
• In Ready Mixed Concrete Ltd v Minister Of Pensions, the Court identified three criteria
which had to be met before employee status was granted:
1. the individual must provide work or skill for the employer in return for payment or
other remuneration.
[Link] individual must have agreed (either expressly or impliedly) that they will work
under the control of the employer.
[Link] other circumstances of the individual’s working arrangements must be consistent
with those of an employee - Look at working hours, tax, payment, equipment,
independence)
• The court also mentioned risk as a method of determining employment status.
• “He who owns the assets and bears the risk is unlikely to be acting as an agent or a
servant. If the man performing the service must provide the means of performance at
his own expense and accept payment by results, he will own the assets, bear the risk,
and be to that extent unlike a servant.” (Read ‘servant’ as ‘employee’.) -MacKenna J
at 521.
• Also read Market Investigations Ltd v Minister of Social Security [1969] 2
QB 173
Other Considerations include the following:
• Mutuality of Obligations - On the requirement of mutuality, see: O’Kelly v
Trusthouse Forte [1984] 1 QB 90 - o usually in an employment relationship, the
worker had to be offered work and have an obligation to accept it. There must be an
obligation to provide work and an obligation to accept it.
• Labelling (how parties describe their relationship) - Ferguson v John
Dawson(1976) WLR 1213 - HELD: you can’t just look at the labelling, labelling is
not conclusive, just a factor. It might be in interests of employer to make it look like
you are self-employed. Court said we’ll look at the label, but if that’s inconsistent with
the other factors, we’ll ignore it.
o The court was basically saying that it will not be governed by the wording of the
contract, but will examine the substance of the contract to determine if one is an
employee or not.
See also, Massey v Crown Life (1978) 1 WLR 676 CA
• In Warner Holidays v Secretary of State for Social Services (1983): McNeil
j, attempted to set out a list of points a court should consider for employment
relationships. He basically summarised everything that had previously been considered
(control, integration, obligations, pay, national insurance)—list everything about their
working condition, and decide overall whether they look like an employee.
• Consider the following:
o Level of control (see above)
o Provision of tools and equipment (see Ready Mixed Concrete, above).
o Salary – independent contractors are often paid per job, rather than per hour.
o The payment of Tax/PAYE/national insurance
o Sick pay
o Bearing the risk of profit and loss
o fixed place and time of performance - independent contractors often have multiple
employers, and often have less formalised working arrangements
o Right/ability to do other work
o Labelling (see above, Massey v Crown Life Insurance, and Ferguson v John Dawson).
Look at:
– The Standard Bank Ltd v The Attorney-general And Siafumba (1974) Z.R.
140 (H.C.);
– Dr Sultanova Zumrad v Kalinda & Another (Appeal No. 201/2015) [2018]
ZMSC 310 (19 September 2018).
• One particular problem which arises is the status of employees who are hired out to
work for a different company.
• Do such employees remain the employees of their general employer or do they
become the employees of the hiring company?
• This will determine who is liable for the employee’s torts
• See – Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool)
Ltd (1947) A.C 1 – Lord Porter indicated that the courts should consider a number
of factors including: who pays the employee’s wages, who has the power of dismissal,
how long the alternative work lasts and the complexity of the machinery used.
o The more complex the machinery, the more unlikely that the employee will be
deemed to work for the company hiring his or her services.
The Tort was committed in the Course of Employment
[Link] acts must be in the course of employment - An employer is not
responsible for all of the acts one of their employees carries out. It would be absurd
if an employer was held liable for a car crash one of their employees caused on their
day off.
o The tortious act must occur in the course of employment; an employee is acting in
the course of employment if his conduct is authorised by the employer, or it is
considered to be an unauthorised means of performing the job for which he is
employed (acts closely connected to the job for which he is employed) – Lister v
Hesley Hall Ltd (2002) 1 AC 215
o An authorised act could for instance be in a case where a waste disposal company
which orders an employee to dump toxic waste in a public waterway will have
committed a tort.
• Express authorisation is not an ever-present feature of many employment situations
-the key thing to ascertain is then whether an employee has been given implied
authority to act due to the scope of their employment.
• Implied authority can be seen in Poland v Parr & Sons [1927] 1 KB 236.
o In casu, the defendant’s employee believed that some children were stealing the
defendant company’s property. He struck one of the children, seriously injuring him.
It was held that although this was an unreasonable act, it was still done under his
employer’s implied authority. The court noted that in general employees have an
implied authority, in an emergency, to protect their employer’s property (although the
bench also noted that there was a limit if, for example, the employee had shot at the
boy, this would be beyond implied authority.) The claim, therefore, succeeded.
• Further Reading:
a) Industrial Gases Limited V Waraf Transport Limited And Mussah
Mogeehaid (1997) S.J. 6 (S.C.)
b) Giogio Fraschini And Motor Parts Industries (Copperbelt) v Attorney-
general (1984) Z.R. 29 (S.C.)
c) Acropolis Bakery Ltd v ZCCM Ltd (S.C.Z. Judgment No. 30 of 1985) [1985]
ZMSC 23 (9 December 1985);
d) GDC Hauliers (Z) Limited v Trans-Carriers Limited (SCZ Judgment No. 7
of 2001) [2001] ZMSC 17
• The Course of employment will depend on the facts of each particular case. The
cases below are an illustration of the approach adopted by the courts.
• Authorised acts in an unauthorised manner; here, an employee is undertaking
an authorised act, but does so in an unauthorised manner.
• See - Century Insurance v NI Road Transport Board [1942] AC 509:
o A driver was employed by the defendant company to deliver petrol. Part of this task
involved transferring the petrol from his lorry to a storage tank at the destination.
Whilst doing this, the employee lit a cigarette, threw the match to the ground, and
caused an explosion.
o The defendant was held vicariously liable for this conduct. Although the employee’s
conduct was clearly careless, he was nonetheless in the process of carrying out an
authorised act – delivering petrol.
• A distinction can be made between situations in which an employee acts within their
employment responsibilities (as in Century Insurance), and when they act outside of
them (albeit with the intention of aiding their employer.)
• The above distinction can be found in Beard v London Omnibus Co [1900] 2
QB 530: A bus conductor (i.e. not a driver) was at the bus depot, and realised that
a bus was urgently needed for its next journey. He could not find the driver, and so
decided to drive the bus around to the front of the depot, so that it was ready to go.
In doing so, he injured a mechanic working in the depot. A claim was made against
the employer bus company. The courts rejected vicarious liability – the conductor was
acting outside of the course of his employment.
o Distinguish the above case Limpus v London General Omnibus Co (1862) 158
ER 993
• Smith v Stages (1989) AC 928 – generally employees driving to and from work
are not acting within the course of employment unless special circumstances exist, i.e.
the employee is required under the employment contract to use the employer’s
transport to work or if the employees work requires travel – a sales rep.
• But, a deviation from a journey taken in the course of employment will, unless
incidental, take the employee out of the course of employment for the time being -
Storey v Ashton (1869) L.R 4 QB 476
• Explicitly Prohibited Acts; Courts will usually deny vicarious liability when an
employer has expressly prohibited an employee from taking a particular action.
• However, it is important to note that whilst a prohibition against taking a particular
action will be sufficient to break the link between the employee’s conduct and the
employer, the same cannot be said when an employer has merely prohibited an
employee from taking an authorised action in an unauthorised way – See Manfred
Kabanda And Kajeema Construction V Joseph Kasanga (1990 - 1992) Z.R.
145 (S.C.)
• If the prohibited conduct benefits the employer in some way the courts are willing
to find the employer vicariously liable – Limpus case
• Difficult cases are where the driver of a company vehicle gives a lift to an
unauthorised passenger, is the employer vicariously liable?
• In Twine v Bean’s Express (1946) 62 TLR 458 - Held: as regards the injuries
to the passenger, the negligence was outside the course of employment. Van driver
was told not to take passengers, he took a hitch hiker, when driving negligently, he
injured the hitch hiker.
o There is no vicarious liability here because the driver was doing something he was
told not to, he took himself outside the course of employment.
• In Rose v Plenty [1976] 1 WLR 141 – Driver of a milk cart whose employer told
him not to take passengers, but he allows a young boy to come along with him on the
milk rounds. the boy is injured because of the drivers negligence. Despite this
prohibition, this was within the course of employment, it didn’t prevent vicarious
liability. The employee’s negligence was within the course of employment. See
particularly Lord Denning’s explanation of how this case is to be distinguished from
other similar cases such as Twine, In rose v plenty, the child was providing benefit to
the employers business so doesn’t take him outside the employment course.
• Intentional Torts - For intentional torts, the general rule was traditionally
understood as being that intentional wrongs or criminal acts usually take the employee
outside the course of his employment.
• The current test for whether an intentional tort falls within the course of employment
comes from Lister v Hesley Hall which asks whether there is a ‘sufficient connection’
between the employment and the tort that it would be ‘just, fair and reasonable’ to
hold the employers vicariously liable.
o The Lister test has changed the scope of vicarious liability here so that this
intentional tort is more likely to be ‘within the course of employment’.
o See the reasoning of the court in :Heasmans v Clarity Cleaning [1987] ICR
949- decided before Lister.
• Can acts of assault/battery by an employee fall within the course of employment?
For the old position see: Poland v Parr & Sons [1927] 1 KB 236- an act of violence,
though excessive, in the course of protecting the employer’s interests did not take the
worker outside the course of employment.
• if it was protecting the employer’s reputation or property then they are still within
the course of employment. See; Warren v Henleys [1948] 2 All ER 935 - acts of
personal vengeance fell outside the course of employment and did not attract vicarious
liability. There was no vicarious liability in this case.
• But compare the approach in Warren v Henleys with the modern cases of - Mattis
v Pollock [2003] 1 WLR 2158 - The courts still said that employer was viciously
liable, because he was protecting the employer by keeping the man outside the club.
‘An independent act of self-indulgence or self-gratification’ could be within the course
of employment (therefore an assault arising out of resentment or spite did not
necessarily fall outside the course of employment).
Does sexual assault fall within the course of employment?
ST v North Yorkshire County Council [1999] IRLR 98 - applying Poland v Parr
the answer was ‘no.’ - When a teacher abused a pupil during a school trip to Spain,
CA said the employer could not be vicariously liable, this was in no way an authorised
mode of an authorised act.
Lister v Hesley - overturned the ST case, it illustrates vicarious liability for intentional
wrongdoing.
Liability for Independent Contractors
• whilst an employer cannot be vicariously liable for the actions of an independent
contractor, an employer can be liable if they are in breach of a no delegable duty to
the claimant or the employer has authorised the contractor to commit a tort.
• Examples of employer’s non delegable duty include: duty to care for employees and
liability under rule in the Rylands v Fletcher.
• However, courts are not prepared to find the employer liable, even when a non
delegable duty is owed, for collateral or casual negligence of the independent
contractor which is unconnected to with the job the independent contractor was
engaged to perform – Padbury v Holiday and Greenwood Ltd (1912) 28 T.L.R
494