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Vicarious Liability

legal subject




6/14/2013 WHAT WHAT IS VICARIOUS LIABILITY VICARIOUS LIABILITY • What is Vicarious Liability • Justification for the Liability Elements of Liability Employers are vicariously liable for the torts of their employees that are committed during the course of employment. For instance, A is liable to C for the damage or injury suffered by C due to the negligence committed by B, A’s employee. In the Course of Employment Dr. Noraiza Abdul Rahman JUSTIFICATION JUSTIFICATION FOR THE LIABILITY • ELEMENTS OF LIABILITY According to Michael A. Jones, Textbook on Torts, 2000, several reasons have been advanced as a  justification for the imposition of vicarious liability:  –  –  – (1) (1) Was Was a tort tort committed? (1) The master has the 'deepest pockets'. The wealth of a defendant, or the fact that he has access to resources via insurance, has in some cases had an unconscious influence on the development of legal principles. (2) Vicarious liability encourages accident prevention by giving an employer a financial interest in encouraging his employees to take care for the safety of others. (3) As the employer makes a profit from the activities of his employees, he should also bear any losses that those activities cause. Dr. Noraiza Abdul Rahman (2) Was the tortfeasor an employee? (3) Was the employee acting in the course of employment when the tort was committed? 3 Dr. Noraiza Abdul Rahman These questions lead to THREE requirements that must be satisfied in order to impose vicarious liability:  – There must be a wrongful or tortious act  – There exists a special relationship  – 4 ELEMENTS OF LIABILITY Wrongful Wrongful or Tortious Tortious Act ELEMENTS OF LIABILITY • 2 • The Court will first and foremost determine whether a tort has been committed. The tort is committed within the course of employment Dr. Noraiza Abdul Rahman 5 Dr. Noraiza Abdul Rahman 6 1 6/14/2013 ELEMENTS OF LIABILITY Special Relationship • ELEMENTS OF LIABILITY Special Relationship Control Test  –  –  – This was the traditional test In Collins v Hertfordshire County Council [1947] KB 598, Hilbery J said: "The distinction between a contract for services and a contract of service can be summarised in this way: In one case the master can order or require what is to be done, while in the other case he can not only order or require what is to be done, but how it shall be done." Dr. Noraiza Abdul Rahman  –  – 7 Dr. Noraiza Abdul Rahman ELEMENTS OF LIABILITY Special Relationship • • Organisation Test  –  – Dr. Noraiza Abdul Rahman 10 ELEMENTS OF LIABILITY Special Relationship 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.' • Multiple Test  –  – Dr. Noraiza Abdul Rahman This test was proposed by Lord Denning in Stevenson,  Jordan and Harrison Ltd v McDonald and Evans [1952] 1 TLR 101: 'It is often easy to recognise a contract of service when you see it, but difficult to say wherein the difference lies. A ship's master, and a reporter on the staff of a newspaper are all employed under a contract of service; but a ship's pilot, a taxi-man, and a newspaper contributor are employed under a contract for services. 9 ELEMENTS OF LIABILITY Special Relationship  – 8 ELEMENTS OF LIABILITY Special Relationship In other words, people who have a 'contract of service' (an employment contract) are employees, but people who have a 'contract for services' (a service contract) are independent contractors. Dr. Noraiza Abdul Rahman But in Cassidy v Ministry of Health , Somervell LJ pointed out that this test is not universally correct. There are many contracts of service where the master cannot control the manner in which the work is to be done, as in the case of a captain of a ship. He went on to say: "One perhaps cannot get much beyond this 'Was the contract a contract of service within the meaning which an ordinary person would give under the words?'" 11 The courts then recognised that a single test was not enough to determine employment status so the courts developed a multiple test in Ready Mixed Concrete v Minister of Pensions , whereby all factors in the relationship should be considered. All tests are open to interpretation and there is no conclusive or definitive test; in the case of Hall v Lorimer, the Court of Appeal said no single test is absolute. Dr. Noraiza Abdul Rahman 12 2 6/14/2013 ELEMENTS OF LIABILITY Special Relationship • • • • It has been suggested that hospital’s liability for the torts committed by its employees rests on the breach of its primary duty to patients. If an employer lends an employee to another employer on a temporary basis, as a general rule it will be difficult for the first employer to shift responsibility to the temporary employer. An employer will only be liable for torts which the employee commits in the course of employment. There is no single test for this, although Parke B famously stated in Joel v Morison (1834) 6 C&P 501 at 503, that the servant must be engaged on his master's business, not 'on a frolic of his own'. ELEMENTS OF LIABILITY The Course of Employment • Grey Areas: -Hospital Staff  -Lending a Staff  Dr. Noraiza Abdul Rahman • • 13 Dr. Noraiza Abdul Rahman ELEMENTS OF LIABILITY The Course of Employment • • • • • 15 • 16 ELEMENTS OF LIABILITY The Course of Employment Therefore, in establishing whether vicarious liability exists, the question to be asked is firstly, whether the act complained of was committed “in the course of employment” and secondly, whether the act is reasonably “incidental” to the employee's employment duties. • • • If there is a connection, it is irrelevant whether the employee's act was unauthorised. Dr. Noraiza Abdul Rahman Thus, the important factor in establishing vicarious liability is the connection with t he “course of employment.” However, it is important to note that an employer cannot avoid liability if an employee acts in a way that could be described as “incidental” to his employment and the duties to which he is entrusted with. Dr. Noraiza Abdul Rahman ELEMENTS OF LIABILITY The Course of Employment • 14 ELEMENTS OF LIABILITY The Course of Employment Recently, the courts have been willing to impose liability in far-reaching circumstances on the issue of whether the wrong was committed “in the course of employment.” Important in this context is the case of Lister v Hesley Hall Ltd. This case establishes that an employer cannot avoid liability by showing that an employee engaged in an intentional and unauthorised wrongdoing. Dr. Noraiza Abdul Rahman For an employer to be held liable, the wrong must be committed “within the course of employment.” This criteria is a question of fact, and it is immaterial whether the wrong committed by the employee was authorised or not. An employer will only avoid liability in this situation if it can be shown that an employee acted “on a frolic of his own,” or in other words, if the employee acted in a way that was unconnected with his employment. • 17 Carelessness of worker in the performance of his  job (√) Unauthorised mode of doing something (√) Tort committed in protection of employer’s property (√) Worker delegating his duty (X) • • • Worker acting for his own benefit (X) Acting against employer’s express prohibition (√) (X) Employee acting on a frolic of his own (X) • Fraud of the worker (X) • Commission of theft (X) • Sexual abuse by employee (√) Dr. Noraiza Abdul Rahman 18 3 6/14/2013 ELEMENTS OF LIABILITY The Course of Employment • • Vicarious liability for breach of statutory duty (√) • LIABILITY OF INDEPENDENT CONTRACTOR Location or premises on which the injury occurs (√) Time and its relevance in determining the course of employment (√) Dr. Noraiza Abdul Rahman 19 An employer may however be liable for the tort committed by his independent contractor if the employer is deemed to have committed a tort himself  Dr. Noraiza Abdul Rahman 20 LIABILITY OF AN AGENT • • The general principle is that an employer will be vicariously liable for the acts of his agents who are also his employees, but not for the acts of his employees or independent contractors. THE END The question is whether the agent is acting on behalf of, and within the scope of the authority conferred by the principal? Dr. Noraiza Abdul Rahman 21 Dr. Noraiza Abdul Rahman 22 4