Vicarious liability is a legal mechanism which allows a claimant to fix responsibility on someone other than the impecunious actor. It is a controversial area of tort law as it seems to breach a fundamental principle of the law in that ‘innocent’ parties can be held liable for the conduct of guilty parties. It could be said that the concept has grown out of control as the case law has allowed for such wide claims which don’t seem to logically fit within the vicarious liability doctrine. A number of theories have been proposed to justify the doctrine, however, and these perhaps show that the concept is not out of control, as well as the importance of policy-based decisions in the law.
Firstly, it must be established exactly what vicarious liability is. It is a term used to explain the liability of one person for torts committed by another person. As a general rule in tort law, a person who commits a tort will be personally liable, and the claimant can bring an action against that person who has caused the harm or damage. Vicarious liability is an exception to this in that it gives the claimant the ability to hold someone other than the person who commits the tort liable. Vicarious liability arises in a number of different scenarios, but for the purposes of this essay, the most common form of vicarious liability will be discussed in detail: cases of employer-employee liability.
There are a number of elements which must be established for a claimant to have a successful claim in the case of employer-employee liability. It must be established that the person who commits the tort is an employee under the legal definition. If this vicariously liable relationship exists, it must be established that a tort has actually been committed. Although this seems obvious, there cannot be secondary liability in the form of vicarious liability, if there is no primary liability. It must then be established what torts were committed during the course of employment, and it is these for which the employer may be held liable. An analysis of these aspects in more detail, as well as the corresponding case law highlights some of the issues with vicarious liability and the reasons as to why it may be seen to be out of control.
The courts have to determine whether the person who commits the tort is an ‘employee’. A distinction must be made between an employee and an independent contractor. To aid this distinction, the courts have developed a number of tests. The oldest of these is the control test. This distinguishes an employee and an independent contractor on the basis of whether the employer had the right to control the nature of the work done and, most importantly, how it must be done. This test comes from the case of Yewen[i]. This test was based on the ‘master-servant’ nature of employment in the nineteenth century, and is less realistic in modern society where many employers do not have the expertise or knowledge to supervise the way in which skilled employees carry out their work. Indeed, Otto Kahn-Freund said of this test ‘To say of the captain of a ship, the pilot of an aeroplane, the driver of a railway engine, of a motor vehicle, or of a crane, that the employer “controls” the performance of the work is unrealistic and almost grotesque.’[ii]. Therefore, the courts have developed some more appropriate and modern tests. The integration test makes a distinction between a contract of service whereby ‘a man is employed as part of the business and his work is done as an integral part of the business’ and a contract for services whereby ‘work, although done for the business, is not integrated into it but is only accessory to it’[iii]. Perhaps the most complete test the courts have at their disposal, however, is the multiple test, as set down in Ready Mixed Concrete Ltd v Minister of Pensions [1968]. In this case, it was held that there were three conditions that had to be met before a worker would be considered an employee. These were: the person had to provide work or skill for the employer in return for payment of a wage or some other remuneration; the person agrees that they will work under contract; and, all other circumstances are consistent with the situation being characterised as a contract of employment (including method of payment, tax and national insurance, working hours, provision of equipment, level of independence etc.). The last of these requirements essentially means the courts have a very wide discretion as to who qualifies as an employee. No single test is accepted as authoritative by the courts, but the most widely used is the multiple test. Therefore, the first argument to say that vicarious liability is out of control is to say these tests are too wide, and allow for too many people to be classified as employees. However, the courts use these tests as guidelines to come to logical and just decisions, and so in this respect it seems there is no loss of control. The power remains firmly in the court room, and it seems judges will make policy based decisions so as to arrive at the bets outcomes.
Perhaps a more controversial area of vicarious liability when considering the employer-employee relationship is that of the ‘course of employment’. It must be established that, whilst committing the torts, the employee was acting in the course of employment. If the employee is off on a ‘frolic of their own’[iv], their employer will not be held liable for their actions. Acts authorised by the employer, or acts so closely connected with what the employee was supposed to be doing, will fall under the course of employment[v]. However, there are perhaps some more controversial ways in which an employee can be classified as acting under the course of employment which could add weight to the idea of vicarious liability being out of control. For example, if the employee is carrying out an authorised act but in an unauthorised manner, they can still fall under the course of employment. This was the case in Century Insurance v NI Road Transport Board [1942], where a petrol lorry driver lit a cigarette with a match and then threw the match causing an explosion. Although it seems that the driver was off ‘on a frolic of his own’, the company were nevertheless found to be liable for his actions as he was carrying out his duty but in an unauthorised manner. There is an element of policy behind this decision, as the courts saw it necessary to find the company liable so the damages from the explosion could be recovered. Another controversial area of the course of employment is that of unlawful acts. On the face of it, it seems that vicarious liability should not be applicable at all to cases involving criminal acts, but the courts have taken a different approach. Lister[vi] saw the House of Lords develop the ‘closeness of connection test’. It must be asked how close the connection is between the employment and the tortuous activity, and the closer this connection, the more likely the courts will find vicarious liability. The aim for vicarious liability is to be both fair and useful, and the relevant test which runs in line with this is that of closeness of connection. Again, policy underlined the decision in Lister, as the courts saw it necessary that someone compensate for the criminal activity.
It seems then, that the case law has identified a number of controversial areas with regards to vicarious liability. The very concept itself needs some justification, as vicarious liability is a process of loss shifting and blame shifting. If the concept cannot be adequately justified, it undermines the law as people are held liable, unfairly, for things they did not personally do.
Professor Atiyah notes that ‘in a complex modern society the justification for a particular legal principle may frequently have to be sought in many considerations. None of them taken by itself may be sufficient reason for the principle, but the combined effect of all of them may be overwhelming. Of course this means that in any particular case where some of the factors put forwards in justification are present and others are not, some sort of balancing operation needs to be made, but this is itself a familiar part of the legal process.’[vii] Therefore, a number of different arguments are proposed in an attempt to justify vicarious liability. The one which arguably carries the most weight is the loss spreading/deep pockets argument, but also discussed below are the justice and incentive/deterrence arguments.
The justice argument says that the defendant should take the risk of harm, either because they also take the benefit of the activity that creates the risk, or because of their role in creating the risk. This is a moral argument, which says it would be unfair to pass on the risks to someone else. The incentive/deterrence argument is that the employer has the opportunity to increase standards of safety, and it is best if there is an incentive for him or her to do so, through liability for the employee’s tort. Although this doesn’t explain cases where an unavoidable accident occurs, it does provide a means by which we can justify vicarious liability. Finally, there is the loss spreading/deep pockets argument. Atiyah describes this as the dominant justification: ‘in general the policy...is a sound one...because it is the most convenient way of ensuring that persons injured in the course of business enterprises do not go uncompensated”. This argument focuses on the need to compensate victims of tortuous conduct, and is the argument which most closely ties in with the policy decisions in the case law. The most promising and reliable route for compensation is through the liability of the employer, and they are the ‘people’ with deep pockets, and so can afford the demands of compensation. Insurance make this into a more modern argument: the risk of harm should be managed by the defendant and spread through a risk-bearing community, not placed entirely upon the vulnerable claimant[viii]. Therefore, if it weren’t for vicarious liability, and it’s wide span (particularly with regards to employer-employee situations) many tortuous wrongs would go uncompensated. Vicarious liability means that employers can pay for the wrongs of their employees, and it is unlikely that this cost will be so great as to have a detrimental effect on a firm’s finances.
To conclude, there are a number of arguments which justify the existence of vicarious liability. Many of the decisions have their reasoning grounded in policy. As McLachlin J said in Bazley v Curry [1999], ‘the best route to enduring principle may well lie through policy’. And it is the policy behind these decisions and behind vicarious liability which makes the law fair and just. Vicarious liability can seem out of control, particularly with regards to employer-employee relationships because of the wide number of ‘employees’ which fall under the ‘course of employment’, but each decision is again justified by policy. Therefore, the concept of vicarious liability may not seem clear to the reasonable person, but it is certainly not out of control.
[i] Yewen v Noakes [1880]
[ii] Otto Kahn-Freund; Servants and Independent Contractors; 14 Modern Law Review (1951) 504
[iii] Stevenson, Jordan and Harrison Ltd v McDonnell and Evans [1952].
[iv] Joel v Morison [1834]
[v] The Salmond Test
[vi] Lister and Others v Hesley Hall Ltd [2002]
[vii] Atiyah; Vicarious Liability in the Law of Tort
[viii] Tort Law, Texts, Cases and Materials; Jenny Steele; 2007; Oxford
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