Vicarious Liability

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Vicarious liability is a doctrine of English tort law that imposes strict liability on employers for the wrongdoings of their employees.

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In WHPT Housing Associations v Secretary of State for Social Services, it was stated that it is necessary to consider the obligations agreed to be undertaken, and whether the contract is of service, or for service. Lord Denning distinguished the two in Stevenson Jordan & Harrison v MacDonald & Evans - in a contract for service the master can order what is to be done, while in the other, he can order what is to be done and how.

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Often there is doubt or ambiguity, therefore other criteria are taken into account. In Ferguson v Dawson, it was illustrated that it need not matter that a worker is classified as a subcontractor, if other factors such as the intention of the parties represent a relationship of employee.

(The plaintiff had fallen from a roof whilst working for the defendants, and had claimed damages for breach of statutory duty. The parties disputed whether the plaintiff was an employee, that he had the benefits of such as avoiding tax, or a self-employed independent contractor, of which he was officially labeled. )

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The control test effectively imposes liability where an employer dictates both what work was to be done, and how it was to be done. Liability is generally not extended to acts of independent contractors. However, in cases involving high risks of damage, a duty to have a certain level of control will be imposed. Therefore, liability for independent contractors was found in Honeywill and Stein Ltd v Larkin Brothers Ltd where photographers who were subcontractors hazardously undertook to photograph in a theatre interior, and set alight to it. There is also no strict rule about the relative weight each of the various considerations should carry in a particular case. The control test can be a determining factor such as in Sime v Sutcliffe Catering, however in Lane v Shire Roofing, the control test took a less decisive role. In Salmon on Torts, it was stated that ‘control is a necessary but not a sufficient mark of service.’ In recent years, as the duties of employees have grown ever more specialised and far reaching, and the control test has seen less primary use in establishing liability. It is difficult to state, for example, that a hospital administrator controls the method and actions of a professional doctor, despite liability having been clearly established in such cases.

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The integration test relates to whether the individual is an accessory or integral part of the business, proposed by Lord Denning in Stevenson Jordan & Harrison v MacDonald & Evans where the question was whether an author was under a contract of employment of which his employer would own the copyright of his work. Lord Denning distinguished that a ship’s master, a chauffeur, and a reporter on the staff of a newspaper are integral, while a ship’s pilot, a taxi-man, and a newspaper contributor are an accessory.

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Lord Wright suggested a complex test (allocation of financial risks/multiple test) involving control, ownership of the tools, chance of profit, and risk of loss. Factors of importance include whether the person may hire their own helpers, and the degree of responsibility for investment and management. Tests based on the economic relationship between an employer and employee have been favoured in subsequent cases such as Ready Mixed Concrete v Minister of Pensions & National Insurance, where the owner-drivers, who had ownership of the vehicles, and bore their own chance of profit, and chance of loss, were deemed to be employed under a contract for service. Its limitations led to the multiple test, which takes into account all relevant terms of the agreement, including whether wages are paid net of tax, how payment is made (weekly, monthly or lump sum), holiday entitlement, the provision of tools, equipment or transportation, whether the employee is obliged to take commands, and so on.

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An employer will also be vicariously for the torts of employees they lend to another employer on a temporary basis. In Mersey Docks & Harbour Board v Coggins, the Board was liable for the negligence of a crane driver that was hired to Coggins, as the Board was still in charge of wages or dismissal, while Coggins only had authority over what job the driver should do. Other situations include O’Kelly v Trusthouse Forte plc, where it was held that contracts require a mutuality of obligation. Due to the fact that the waiters were casual workers who had no obligation to turn up during their shifts, nor did the employer have any obligation to call them, their contract lacked ‘mutuality’. The legal question beings asked for policy reasons should also be considered. In Airfix Footwear Ltd v Cope, a self-employed worker could be classified as an employee for purposes of unfair dismissal.

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It has been stated judicially that no one test can adequately cover all types and instances of employment, nor is there an exhaustive list of relevant considerations or strict rule about the relative weight of the various considerations should carry in a particular case. Thus, generally, the tests used and ultimate determination rest upon the individual aspects of each case, looking at all the factors as a whole.

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An employer will only be liable for torts which the employee commits in the course of employment, even if they are wrongful ways of doing them or were expressly forbidden by the employer.

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In Kay v ITW, the defendants employee injured the claimant while moving a large lorry in order to make way for his forklift. Although this was a folly of the employee and not authorised by the employer, it was still within the course of employment. In Jefferson v Derbyshire Farms, the employee was carrying out the task when he set fire to the garage, and so the employer was held vicariously liable. Similarly, in Century Insurance v Northern Ireland Road Transport, vicarious liability was found when the employee’s lit cigarette caused a fire while carrying out his duties of delivering petrol. Even skylarking will lead to vicarious liability. In Harrison v Michelin Tyre Co Ltd, the courts found the employer vicariously liable as the employee was still acting in the course of employment when he pushed a trolley under the duckboard the claimant was standing on, injuring him.It has been established that course of employment generally starts travelling to and from work. In Compton v McClure, the employee injured another employee when driving too fast into the employer’s premise in an effort to clock in on time. In this case, course of employment started at the gates of the employer’s premises, where speed limits and supervised conduct should be established.

An employer will not be liable for the employees ‘frolic of his own’. In Storey v Ashton, the employer was not liable when the employee injured the plaintiff whilst deviating from his route to collect wine for a friend.

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The distinctions drawn between prohibited acts, and acts which take employees employees out of the course of employment is illustrated in the contrasting cases, Limpus v London General Omnibus Company and Iqbal v London Transport Executive. In the former, the employer was held liable when the driver drove to obstruct a rival omnibus despite express prohibitions, as he was still acting on the course of employment. By contrast, in the latter case, the bus company was not liable when a conductor negligent chose to drive the vehicle instead, which went beyond his authorised duties.In Rose v Plenty, liability was imposed where a small boy was injured in a road accident while helping a milkman on his rounds, as even though this was prohibited, the employee was not acting outside of his employment but in furtherance of it. However, in Twine v Bean’s Express ltd, the express prohibition upon giving lifts was not only a prohibition but a limiting factor on the scope of employment, and therefore exempted the employer from liability.

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Vicarious liability can also be imposed based on implied authority. In, Poland v Parr & Sons, the employer was held liable as the employee was acting on his implied authority to protect his employer’s goods when he assaulted a boy he suspected was stealing.

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An employer will not usually be liable for criminal acts of the employees. For example, in Keppel Bus Co v Ahmad, it was argued that the conductor’s act of hitting the plaintiff passenger over the head with his ticket machine was not part of his duty, or implied authority as it was not an emergency situation that required such action. Compare the case with Petterson v Royal Oak Hotel, where it was held that the barman's act of throwing the glass which injured the plaintiff was part of his duties of keeping order, although an unauthorised and improper manner of doing so.

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Liability is also extended to fraudulent actions which were not a benefit to the employer, if it remains within an employee’s actual, or outwardly appearing, authority. In Lloyd v Grace Smith, the company was liable for the fraud of the employee as the crime was committed in the course of employment.

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Several reasons have been advanced as a justification for the imposition of vicarious liability. The first is that employers generally have larger assets, and greater means with which to offset any losses (deep pocket compensation) Secondly, as the employer can be seen to gain from the duties of their employees, they should bear the consequences of any wrongdoings committed by them. Lastly, encourages accident prevention by giving an employer a financial interest in ensuring that adequate precautions are taken in conducting business.