Vicarious Liability

Introduction The law of tort has been used for many centuries centuries to protect personal interests interests such as property, property, reput reputat atio ion, n, body body etc. etc. It ensu ensure ress just justic icee is done done by looki looking ng into into the the clai claima mant nt's 's need need for for compensation, which is paid by the defendant who has committed a breach of duty. The general rule in tort law is that liability liability is personal, personal, i.e., liability liability is generally generally linked to a breach of one’s own duty and a person is liable liable for the wrongs committed committed by him only. However, in certain certain scenarios, the law makes one person being liable for the harm caused by another, because of some legally relevant relationship between the two. This is known as the doctrine of vicarious liability.

The word 'vicar 'vicariou ious' s' is derive derived d from from the Latin word word for 'change' 'change' or ‘alter ‘alterati ation’ on’.. Vicari Vicarious ous liability liability is an aberration aberration from the norm of holding the tortfeasor tortfeasor liable for damage caused by their own tortious liability. It is also referred to as imputed negligence. Legal relationships that can lead to imputed negligence include the relationship between parent and child, husband and wife, owner of a vehicle vehicle and driver, driver, and employer employer and employee employee etc. The persons who are held vicariously liable need not be personally connected to the tort or be in anyway responsible. Thus vicarious liability is a form of strict liability.

Many Many reason reasonss have have been advanced advanced to justif justify y this this departu departure re from from the fault principl principle. e. It is commonly said that the reasons behind the doctrine of vicarious liability are first, that the employer is in a better position to absorb the legal costs either by purchasing insurance or increasing his prices. Secondly, that the imposition of liability should encourage the employer to ensure the highest possible safety standards in running his business. The Latin maxim ‘qui facit per alium facit per se’ that means he who who acts through another shall deemed to have acted on his own and ‘respo ‘respondea ndeatt superi superior’ or’ (“let (“let the master master answer answer”) ”) is common commonly ly used used in employ employereremployee relationships. In Bartonshill In Bartonshill Coal Co. v McGuire ,1 Lord Chelmsford LC said: ‘every act which is done by an employee in the course of his duty is regarded as done by his employer’s orders, and consequently is the same as if it were his employer’s own act.’ It is said that the doctrine of vicarious liability has not grown from any very clear, logical or legal principle but from social convenience and rough justice2. Another justification for it is that since the employer 1 (1853) 3 Macq 300 2 Per Lord Pearce in Imperial Chemical Industries v Shatwell [1964] All ER 999

1

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makes profit from the employee’s activities, it is only reasonable that the he bear any losses caused by the same. The most common example of o f vicarious liability is the liability of an employer for the torts of his employees committed in the course of employment. It is not necessary in such circumstances for the employer to have breached any duty that was owed to the injured party, and therefore it operates as strict or no-fault liability. The most important element to establishing a case for vicarious vicarious liability liability is that the wrongdoer be acting acting as an employee employee or employee, employee, and that the wrong done be connected to the employee’s course of employment.











Extent Extent of Vicariou Vicariouss Liabil Lia bility ity The master (or employer) is liable for the torts committed by his servant (or employee) only when it committed committed during the course of employment employment.. It is important important to note that the vicarious liability of the employer is additional to the ‘primary’ liability of the employee for negligence. Both are liable— ‘jointly and severally’, as it is put. The common law implies into the contract of employment a term to the effect that the employee will perform the contract with reasonable care. On the basis of this term, the employer is entitled to recover from the employee a contribution to any damages which the employer is liable to pay to the person injured or killed. If the employer was not negligent at all, it will be entitled to be fully indemnified by the employee. There There are three three basic basic requir requireme ements nts to attrib attribute ute liabil liability ity to the employ employer. er. Firstl Firstly, y, it must must be established that the tort was committed by the employee; secondly, the relationship between the master and employee should be established; thirdly, the tort must have been committed in the course of employment.

Is the worker an employee? In order to establish vicarious liability, it is very important to be able to identify an employee; howe however ver the the law law is rath rather er unce uncert rtai ain n on the the defi defini niti tion on of ‘emp ‘emplo loye yee’ e’ (or (or ‘ser ‘serva vant nt’) ’).. An independent contractor is said to have a contract for his services with his employer, while an employee (or servant) works under a contract of service. A convenient starting point for inquiry is the terms of the contract between the parties: how does the contract classify the person in question—as an employee or as an independent contractor? In the case of an independent contractor, a contract for services exists between the employer and the contracto contractor. r. A 'contra 'contracto ctor' r' is a person person who, in the pursuit pursuit of an indepe independen ndentt busines business, s, undertakes to do specific jobs of work for other persons, without submitting himself to their control control in respect respect to the details of the work 3. The employer is not liable for the torts committed by the independent contractor except under exceptional circumstances such as strict liability,











The difference between a contract of service (employee) and one for services ([independent contra contracto ctor) r) must must reside reside,, essent essential ially ly,, in the terms terms of the princi principal pal obliga obligatio tion n agreed agreed to be undertaken by the employee. In a contract of service, the principal obligation is to provide himself to serve: whereas in a contract for services the principal obligation is to provide his services for the use of the employer.4 This distinction was also explained in the case Honeywill & Stein Ltd v. Larkin Bros Ltd 5 by Slesser LJ. LJ. An employer is not liable for the acts of his independent contractor in the same way as he is for the acts of his employees or agents, even though these acts are done in carrying out the work for his benefit under the contract. The determination whether the actual wrongdoer is a employee or agent on the one hand or an independent contractor on the other depends on whether or not the employer not only determines what is to be done, but retains the control of the actual performance, in which case the doer is a employee or agent; but if the employer, while prescribing the work to be done, leaves the manner of doing it to the control of the doer, the latter is an independent contractor. Now, the question arises how to establish the relationship between a master and an employee? It is important to determine who is an employee not just for the purpose of vicarious liability, but also for issues such as tax, social security, copyright etc. There is no single test for determining this, but tests have been formulated in the cases. The oldest of these is the ‘control’ test. The control test effectively imposed liability where an employer dictated both what work was to be done, and how h ow it was to be done. This is aptly suited for situations where precise instructions are given by an employer; it can clearly be seen that the employer employer is the causal causal link for any harm which follows. follows. If on the other hand an employer employer does not determine how an act should be carried out, then the relationship would instead be one of employer and independent contractor. The weakness of this traditional approach is that in the case of modern, highly specialized tasks it is difficult for the employer to exercise control over the method of doing the work Therefore, this test is not universally correct. The control test was explicitly disapproved in the case of Union of India v. Abdul Rehman and it was stated that control test was a product of the primitive











which the work is to be done, as in the case of lawyers, surgeons and captains of ship etc. However, the Privy Council held that “Control will no doubt always have to be considered, but it can no longer be regarded as the sole determining factor; and that factor A new test evolved with times to determine whether the contract is that “of service” or “for servic services” es” A test test was formed formed to determ determine ine whether whether the employee employee was an integr integral al part part of the business. business. This test was proposed by Lord Denning. The reasoning is that under a contract 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. The court will decide the status of each individual in the light of all the circumstances of each case. Ways of determining whether the worker is an employee or independent contractor include determining who owns the tools, is the worker paid wages or commission/lump sum amount for the job, was the worker in business on his own etc. He said: 'It is often easy to recognize a contract of service when you see it, but difficult to say wherei wherein n the differe difference nce lies. A ship's ship's master, master, a chauffe chauffeur, ur, and a report reporter er 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 newspaper contributor contributor are employed employed under a contract contract for services. services. One feature 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.' 7 The test nowadays is to look at all of the circumstances of the relationship before making a Ready Mixed Mixed Concret Concretee v Minist Ministry ry Of Pensio Pensions ns And Nation National al Insuranc Insurancee8 the decision. decision. In Ready following criteria were put forward to determine whether a c ontract of service exists: 1. The employee employee agrees agrees that, in conside consideratio ration n of a wage/other wage/other remunerati remuneration, on, he will provide provide his own work and skill in the performance of some task for his employer. 2. The employee employee agrees agrees expressly expressly or or impliedly impliedly to to be subject subject to his employe employer’s r’s control. control. 3. The other provisions provisions of the the contract contract should should be consistent consistent with with it being being a contract contract of service or employment.











Another test is to determine the employer is the 4 indicia of contract of service. It was brought out by Lord Thankerton in Short V.J. & W. Henderson Ltd.9 (i)

Master’s pow power to to se select servant

(ii) (ii)

Paym Paymen entt of of wage wagess or othe otherr rem remun uner erat atio ion n

(iii (iii))

Mast Master er’s ’s right right to contr control ol met metho hod d of doing doing wor work k

(iv) (iv)

Mast Master er’s ’s right right of susp suspen ensi sion on or dism dismis issa sall

The latest test to determine whether a worker is an employee is called the ‘hire and fire’ test. The person who retains the power pow er of dismissal is usually the employer for the purposes of vicarious liability. One cannot always use any one test exclusively. In practice, it is difficult to predict which tests the court will apply and a lmost impossible to assess in advance the outcome of individual cases.

Course of Employment An empl employ oyer er will will only only be liabl liablee for for tort tortss which which the the empl employ oyee ee comm commit itss in the the cour course se of employment. Although this is a question of fact in each case, there is little consistency in the decisions. It is therefore extremely difficult to state the law simply. Course Course of employment employment is a legal considerati consideration on of all circumstan circumstances ces which may occur in the performance of a person's job, especially during a period of time where specific objectives are given given by the the empl employ oyer er to the the empl employ oyee ee are are bein being g fulf fulfil ille led. d. The The cour course se of empl employ oyme ment nt encompasses the actual period of employment and the period during which the employee, while on the employer's premises, prepares to commence or to depart from work, such as by changing clothes. Employer-sponsored recreational activities are also considered part of the course of employment when organized, encouraged, or supported by the employer for business purposes, such as the promotion of efficiency. For an act to be considered within the course of employment it must either be authorized or be so connected with an authorized act that it can be considered a mode, though an improper mode, of per perfo form rmin ing g it. it. In othe otherr words words,, an act act can can be said said to be with within in the the real realm m of “cour “course se of employment” if it is either an authorized act or a wrongful way of doing an authorized act.













by implication. This 'implied authority' approach seems to have lost currency but it was accepted in the early 20th century 10 and it was even then probably little more than a means of justifying the outcome which the courts desired. An employer will usually be liable for acts which are wrongful ways of doing something author authorize ized d by the employ employer, er, even even if the acts acts themse themselve lvess were were expres expressly sly forbidde forbidden n by the employer.11 The court should determine the fundamental question of whether the wrongful act is sufficiently related to conduct authorized by the employer to justify the imposition of vicarious liability. Where there is a significant connection between the creation or enhancement of a risk and the wrong that occurs, the employer can be held vicariously liable. To determine the sufficiency of the connection, the following factors should be considered: 1. the opportuni opportunity ty afforde afforded d for the employe employeee to abuse abuse his his power; power; 2. the extent extent to which which the act is furthered furthered by the employe employer's r's aims; aims; 3. the extent extent to which which the act is relat related ed to friction, friction, confront confrontation ation,, or any other other kind of tort tort 4. the extent extent of the power power of the employe employeee over the the victim; victim; and, 5. The vulne vulnerab rabil ility ity of the the potent potential ial victi victims. ms. This principle was applied in many cases like Rose like Rose v. Plenty v. Plenty..12 In this case, a milkman had been forbidden by his employer to allow young boys to ride on the milk floats and assist in delivering milk. However, he took a 13-year-old boy to help him on his round, and the boy was injured through the milkman's negligent driving. The boy sued both the milkman and the dairy. The Court of Appeal held that the milkman was carrying out, albeit in a prohibited manner, the task











An act in defiance of a prohibition which deals with “conduct within sphere of employment” (i.e.: how, when, where etc tasks are performed) performed) will not be outside the scope of employment the employee would be doing the right services but in the wrong way: employer is liable

However, a master will not be liable for the servant’s negligence in doing something which he was merely permitted to do and does so for his own purposes. This was seen in the case Crook v. Crook v. Derbyshire Derbyshire Stone Ltd .14 it was held that the employer was not liable when a collision occurred between the employee and a motor cyclist caused by his negligence. The lorry driver had stopped at a way side café and crossed one section of a dual carriage way on foot in order to get refreshment which was an act done while he was employed and with his employer’s permission. The act of getting refreshments was just incidental to his employment.











Vicarious Liability in cases of borrowed servants When one employer lends his servant under a contract contract or otherwise otherwise to another person there is a change of master for a period the servant is doing the specific work of that other person. This concept is known as lending of a servant. The servant is said to be borrowed by his new employer from his general employer for that brief period. General rule is that vicarious liability can’t be shared. It must be assigned to one employer. Courts Courts seem to uniformly uniformly hold that an employee employee is presumed presumed to continue continue in the employment employment of the general employer, employer, and that, in order to show that he has become the servant or employee of the special employer, the burden of proof to establish such a shift is on the general employer. So, whenever an employee commits a tort during such a course of borrowed employment, the person wrong wronged ed can can take take only only the the gene general ral empl employ oyer er liab liable le.. It also also seem seemss to be agree agreed d that that the the rela relati tions onshi hip p betw between een an empl employ oyee ee and and the the gener general al or speci special al empl employ oyer er is a quest questio ion n of fact. Because of this, similar or even identical factual situations may produce different results, because different tiers tiers of fact may put greater weight on different different factors. This general rule was Board v. Coggins and Griffiths Liverpool Ltd 15. applied in the case of Mersey of Mersey Docks & Harbour Board v The two prevailing tests for determining borrowed employee status can be summarized as follows. The “whose business” test inquires as to which employer’s work was being performed performed at the time the accident occurred. The “right of control” test focuses on which employer employer had the right to control the specific acts of the employee at the time of the accident, the reasoning being that that employer is in the best position to prevent the injury The two tests tend to overlap since











servants and he appellants continued to be the master and were, therefore liable for negligence of the servant. The House of Lords took all the facts into account, but regarded it to be of paramount importance that the original employer retained the control over the manner in which the work was to be done. Accordingly, it was held that the original employer carried vicarious liability for the tort of the driver. The original employer bears the burden of proving that the responsibility for the torts of the employee has shifted to the second employer, and the statements in the contract of hire are not to be treated as conclusive co nclusive on this matter. The primary method to establish vicarious liability remains the test of control. The person who tells the employee the way in which he is supposed to do the work upon which he is engaged, is the person liable for the negligence or torts committed by the employee. It is not enough that the task must be performed under his control; he should also control the method of performing it. The same principal was used in Bhoomidas v. Port of Singapore Authority. Authority.16 In another case, a bus which met with an accident was hired along with the driver by a corporation from a private owner. Although the driver continued to be in the pay roll of the owner, his services were transferred along with complete control to the corporation under whose directions, instructions and commands the driver was to ply or not ply the bus on the road. In these circumstances, the corporation and not the private owner was held vicariously liable for the tort committed by the driver.

17

The test of control was applied to the above case, and the party

that held the control of the method of performing the work is liable. Sometimes, the concept of dual liability is followed. Under this concept, both the general and the











The court held that the driver was the servant of both Byers and Hazlett, and therefore both were vicari vicarious ously ly liable liable.. Byers Byers control controlled led him as a demons demonstra trator tor for the purpos purposee of selli selling ng the truck. Hazlett controlled him in delivering the gas. Each had a power or right of control, whether whether it was exercised or not. The driver was acting acting on behalf of both and for the benefit benefit of both. A number of courts have adopted the dual liability liability approach over the years. years. They follow the rationale expressed in Brickner in Brickner v. Normandy Normandy Osteopathic Osteopathic Hospital, Hospital, Inc. Inc.19, that notwithstanding the biblical admonition that a man cannot serve two masters, a person can indeed “serve two masters simultaneously, provided the interest of the masters are not so adverse and antagonistic that the intent to serve one necessarily excludes an intent to serve the othe r.”













Vicarious Liability of Hospital Authorities The principle of vicarious liability is very often sought to be imposed on hospital authorities for the negligence negligence of doctors and other medical medical staff in the hospital. hospital. In the twentieth twentieth century, century, the hospital's sole responsibility was “to provide a properly equipped medical facility”. Over the years the function of the hospital has slowly changed from a venue for treatment to a provider of treatment. The patient has a right to expect a certain standard of care when he puts himself in the hands of the hospital authority or health care providers. When a hospital fails to uphold this responsibility, the institution may be held liable for causing damage to its patients. They can be vicariously as well as directly liable for providing health care facilities. The hospital-patient relationship creates a duty of due care on the part of a hospital or a hospital administr administration. ation. Doctors and surgeons are not expected to perform perform miracles or guarantee guarantee a cure. The The stand standar ard d of care care dema demand nded ed of hosp hospit ital alss and medi medica call and and other other staf stafff is a reas reasona onabl blee professional standard. There will be breach of this du ty if the hospital (or its staff):











A plaintiff must establish all four elements of the tort of negligence for a successful medical malpractice claim: ○

A duty was owed - a legal duty exists whenever a hospital undertakes care of a patient.

○

A duty was breached – the provider failed to conform to the relevant standard of care. The standard of care is proved by expert testimony or by obvious errors (the doctrine of res ipsa loquitur or loquitur or the thing speaks for itself).

○

The breach caused an injury – The breach of duty was a proximate cause of the injury.

○

Damages – Without damages (losses which may be pecuniary or emotional), there is no basis for a claim, regardless of whether the medical provider was negligent.

In earlier times, hospitals were not held vicariously liable for the negligence of its professional staff in matters involving professional care and skill.22 Mr. Hilleyer suffered severe burns due to negligence of hospital nurses. The hospital was excluded from liability. The rationale behind the judgm judgment ent was that the nurse nurse was not under under the direct direct control control of the hospital hospital author authorit ities ies.. However, However, in Cassidy v. Ministry of Health23 the claimant underwent a routine operation on his hand. The operation was incompetently performed, and made the claimant's condition much











In India too, the concept of vicarious liability is applicable to hospital authorities. The state is liable for negligence of staff of Government Hospital.24 The Apex Court held that “The medical ethics require certain duties to be performed by the medical practitioners with reasonable degree of care and skill, failing which, such negligence of the medical practitioners working in the Government Hospitals vicariously gets shifted on the Employer State.”25 In Rukmani In Rukmani v. State of Tamil Nadu26 , it was held that the complainant entitled to damages caused by medical negligence on the part of the doctors working in the hospital and the State is vicariously liable for such damages. In this case, the petitioner sought damages complaining that the sterilization operation undergone by her in a government hospital was a failure and subsequently she alleged unwanted pregnancies. The court held both the Doctor and the State responsible for damages of the failed sterilization operation performed by the doctor on account of his negligence. The court held that this is directly directly responsible responsible for another birth in the family, creating creating additional additional economic burden on the person who had chosen to be operated upon for sterilization. In Arpana In Arpana Dutta v. Apollo v. Apollo Hospitals Enterprises and Ors.,27 the court awarded Rs. 5, 00,000/- as damages awarded to the plaintiff for the pain, suffering and mental agony undergone by her due to negligent way in which surgery was done on her. In this case, the defendant doctor negligently











Vicarious Liability of School Authorities Just as hospitals hospitals are liable for torts torts committed committed by its staff, school authorities authorities too can be held vicariously liable for the torts committed by the scho ol staff. Cases that involve the negligence neg ligence of teachers, principals, or other school employees usually result in a court's finding that the relevant school board is liable under the doctrine of "vicarious liability" If a teacher or other employee of the school board is negligent, he is personally liable for the damages sustained by the injured person., However, the school board that employs him, which is usually in a better financial position to compensate the victim is often the primary defendant of the law suit.

Sood v. State of H.P., H.P., the Himachal Pradesh High Court had held the school In Deep Chand Sood v. liable liable in negligence negligence for the death by drowning of 14 children children while on a school picnic. In M.S. Grewal Grewal v. Deep Deep Chand Chand Sood, Sood, in appeal appeal before before the Supreme Supreme Court, Court, the court court reiterat reiterated ed the principle principle of vicarious vicarious liability liability of the school for the negligence negligence of its teachers teachers and located located it within within the grid grid of "impli "implied ed author authority ity"" and the master master-an -and-s d-serv ervant ant relati relations onship hip where where the employee was seen to be acting in the "course of employment" and not on a "frolic of his own"











Vicarious

Liability

of

Employers

in

case

of

carelessness of employee Employers Employers are vicariously vicariously liable for torts torts of their employees. employees. An employer employer is usually usually liable for the uninte unintenti ntional onal torts torts commi committe tted d by the employ employee ee during during the course course of the employ employmen ment. t. Unintentional torts are mistake, carelessness etc. A different set of rules apply in deciding cases when intention of the employee exist such as willful wrongdoing, theft, fraud, assault etc. We shall now look at the liability of the employer in the circumstance of carelessness of employee By far the commonest kind of wrong which the servant commits is one due to unlawful carelessness, whether it be negligence of the kind which is in itself a tort, or negligence is imma immate teri rial al;; the the doer doer is liab liable le eith either er way. way. In case casess of this this sort sort the the empl employ oyer er may may well well be responsible for conduct of the servant to which no moral blame attaches. But assuming that the tort is negligence or that it is one in which inadvertence is a possible element in its commission, it may still be in the course of employment even if the servant is not acting strictly in the













One of the leading cases to illustrate vicarious liability in case of negligence or carelessness of Corporation..31 the employee is Century Insurance Co. Ltd. v. Northern Ireland Road Transport Corporation In this case, a lorry belonging to the respondents and driven by one of their employees was delivering petrol in bulk from Larne Depot of H & Co. to a garage in Belfast. While the petrol was flowing from the lorry to the tank at the garage, the driver lit a cigarette and threw the match. It was held that the negligent act of the driver was done in the course of his employment by the respondents. Thus, they would be liable for his negligence and the appellants were entitled to claim damages under the terms of the policy. In Jefferson In Jefferson v. Derbyshire Farmers Ltd.32 , the defendants were using the plaintiff’s premises as a











Master's right to recover damages from servants An employee may be liable to make good damages or other compensation which the employer has been liable to pay to some third person as a result of the act or omission of the employee in the course of employment. The liability is vicarious, that is, the employer is liable because the act of the employee is attributed to the employer and not because the employer has been guilty of any any negli neglige gent nt or othe otherr wron wrongf gful ul act or omis omissi sion on.. In othe otherr words words,, when when an empl employ oyer er is successfully sued, they have the option of suing the tortfeasor for an indemnity to recover the damages back. The person who is vicariously liable can seek it from the tortfeasor.











is that when the government or a public authority is made to pay damages the burden really falls on the citizens as taxpayers and there is no justification for burdening them for malicious and oppressive conduct of the officers. The next thing that has to be established is that the tort was committed during the course of empl employ oyme ment nt.. Cour Course se of empl employ oyme ment nt can can be defi define ned d as all all the activ activit itie iess engag engaged ed in, in, the the circumstances that exist, and the events that occur that are normally part of an employee’s job, especially those directly related to the work that the employee was hired to do. The time that the employee takes to complete his or her assigned tasks also comes under “course of employment” The law is very very clear clear on what constit constitute utess course course of employ employmen mentt throug through h many many differ different ent











Conclusion We have seen the meaning of vicarious liability and its application under tort law under many circumstances as mentioned above. Vicarious liability is a legal concept which refers to one party being held liable for the injury or damage sustained by another party, in spite of the fact that they had no active involvement in the incident. The intent behind vicarious liability is to hold the proper party accountable when harm is committed. The victim needs compensation and the law provides so so by applying the principle











vicarious liability. It is because the employer has better financial capacity to compensate the victim. It encourages the employer to provide safe working conditions that are accident free to the employees and most importantly, since the employer derives the benefits of the actions of the employee, it is only fair that he bears the brunt if any loss has occurred due to the same. An employer can be held liable for the torts of the employee only if the following claims are established. Firstly, a tort must be committed. Secondly, the tortfeasor must be an employee and lastly, the tort must have been committed in the “course of employment” Once Once the the firs firstt clai claim m is esta establ blis ishe hed, d, one one has has to prov provee that that the the work worker er was was inde indeed ed a serv servant ant/e /empl mploy oyee ee and and not not an inde indepen pende dent nt cont contra ract ctor or (emp (emplo loye yers rs are are not not liab liable le for for tort tortss













employees, so they cannot be held vicariously liable. This was accepted by the court earlier, for instan instance ce in the case case of Hilley Hilleyer er v. S.L. S.L. Bartho Bartholom lomew’ ew’ss Hospit Hospital al36. However later the court rejected this stand and held that the employer must be made liable as the hospital owed a duty of











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Vicarious Liability

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