Vicarious Liability

 L.O;

• Define vicarious liability
• Explain the tests for employee status
• Explain the liability of an employer for the torts of employees on a frolic of their own
• Explain the liability of an employer for the torts of employees doing an authorised act in an unauthorised manner
• Explain the liability of an employer for the torts of employees doing a criminal act

The Meaning of Vicarious Liability

• Vicarious liability is the term used to explain the liability of one person for the torts committed by another
• It mostly arises in employment when an employer might be liable for the torts of their employees
• Someone is only liable under vicarious liability if two questions are satisfied:
• Was the tortfeasor an employee of the defendant, and
• Was what they did committed in the course of their employment?
• For an employer to be liable the tortfeasor must:
• Be an employee of the defendant
• Be acting in the course of employment
• Have committed a tort

Tests

• The courts have established a number of different tests to establish if a person is an employee or not:
• The control test
• The organisation test
• The economic reality test

The Control Test

• The test was established in Yewen v Noakes (1880)
• It considers whether the employer has the power to control the nature of work done and how it is done. It is an old test that uses the concept of master-servant relationships
• Yewen v Noakes (1880)
• There was a statutory exemption for premises which were occupied by a "servant" or person occupying the premises "for the protection thereof". A man and his family occupied a number of rooms within an office building on the alleged basis that he was the caretaker of the building owner. The man was a clerk who was paid a salary of £150 per annum
• The question arose as to whether the man constituted an employee of the building owner for the purposes of exempting the premises from statutory tax duties
• HELD - The Court of Appeal held that an employee, or a servant to adopt the Court's nomenclature, is defined as a "person who is subject to the command of his master as to the manner in which he shall do his work". On the facts of the case, the Court held that the man was not a "servant" or an employee of the building owner as the owner had no right to control the man's work and manner in which it was done. The man earned a salary of 150 pounds per annum in his separate role as a clerk and merely enjoyed residence of the building with his family members. Thus, he did not constitute an employee of the building owner for tax purposes
• The oldest of the tests
• Derived from the days of the 'master and servant' laws
• In Yewen v Noakes (1880), the test was whether the master had the right to control what was done and the way in which it was done
• In Short v JW Henderson Ltd (1946), key features were identified that would show the master had control over the servant. These included the power to select the servant, the right to control the method of working, the right to suspend and dismiss, and the payment of wages
• Such a test is virtually impossible to apply accurately in modern circumstances. Nevertheless, there are circumstances in which a test of control is still useful, in the case of borrowed workers

Organisation Test

• This test relies on a distinction between a contract of service and a contract for service
• Stevenson, Jordan & Harrison Ltd v MacDonald & Evans [1952] established the organisation test
• The basis of the test is to ask who is entitled to tell the employee the way in which he is to do his work. It is not enough that the task being performed should be under his control, he must control the method of performing it
• According to this test, the master of a ship, a chauffeur and a reporter on the staff of a newspaper are all employees, when a pilot bringing a ship into port, a taxi driver and a freelance writer are not
• The test can work well in some circumstances, but there are still defects. Part-time examiners may be classed as employees for the purpose of deducting tax, but it is unlikely the exam board would be happy to pay redundancy when their services were no longer needed

Economic Reality Test

• The Economic Reality test was developed in Ready Mixed Concrete v Minister of Pensions (1968)
• The court had to decide whether lorry drivers contracted to move concrete made by the claimants were employees or not
• The drivers owned their own trucks but painted them with the company's logo and wore their uniform - so on the face of it they seemed like employees, but the court held differently
• HELD - The drivers were not employees but independent contractors because:
• They owned and maintained their lorries themselves
• They had the option of hiring replacement drivers if they themselves couldn't do a run for whatever reason
• They weren't guaranteed an income
• The Economic Reality test requires three things for a person to be considered an employee
• The person agrees to provide work or skill for the employer in return for payment
• He or she agrees (expressly or by implication) to be the subject of the employer's control
• The other terms of the contract are consistent with the existence of a contract of service
• Things that would suggest they were contractors might be:
• A requirement that the person pays for their own tools and equipment
• AND that they themselves have the right to hire someone else to do their job. Usually employment contracts state specifically that the person named on the contract has to do the work, or get paid sick pay if they can't
• Hall v Lorimer (1992)
• A claimant tried to say that he was an independent contractor because he didn't want to pay a higher rate of tax that he would have had to pay as an employee
• The Court of Appeal overturned a previous decision that he was freelance
• CoA stated that the following things made it more likely that he was an employee
• He didn't send out his own invoices
• He didn't have lots of different clients
• He didn't use his own kit
• He didn't have helpers or managerial responsibilities
• The Court added that just because someone performs a highly skilled function does not make them likely to be contractors - and it isn't really decisive if the person is described one way or another in their contracts - the court looks at all factors concerned
• Ferguson v Dawson (1976)
• The court said that simply calling someone self employed wasn't enough for them to be defined as such if circumstances suggested otherwise - such as type of work done and degree of control exercised
• Builder injured in industrial accident tried to sue his 'employer'
• HELD - he was in fact employed by the defendants as his work was 'provided' by them, the claimant didn't go out looking for it
• JGE v Trustees of the Portsmouth Roman Catholic Diocesan Trust (2012)
• A priest molested children (shock)
• ISSUE - Was his immediate superior (the Bishop) in the position of being an employer?
• HELD - Yes - the Bishop was vicariously liable as there was enough 'control' over what the priest

Position of Agency Workers

• The obvious advantage to using agency workers is that, wages aside, they are not as big of a responsibility as employees in terms of sick pay etc
• Hawley v Luminar Leisure (2006)
• Luminar leisure received the services of a bouncer from a separate agency. The bouncer injured the claimant, causing him brain damage
• The agency the bouncer came from went bust, so the claimant was trying to establish that Luminar effectively employed the bouncer. The court agreed
• The court noted that Luminar could've used their own people, and they told the bouncer when and where to work. There was control over what he did and Luminar would have been in a position to prevent the tort from occurring

Casual Workers

• Carmichael v National Power (2001)
• Claimants worked as tour guides at a power station on a 'casual basis'. At what point would these people have been employees?
• HELD - on the basis that the claimants turned up for work as and when they were needed, that they could refuse to work if they didn't fancy it, and that they would not face disciplinary action if they didn't, the court found that they were not employees
• There wasn't enough of an 'obligation' between the parties that would usually exist in an employer/employee relationship

The Position When Employees are Loaned to Other Companies - Who is Responsible for their Torts?

• Mersey Docks v Coggins (1947)
• The claimants loaned the defendants a crane driver who caused an accident due to his negligence. The issue was who employed him, as they would be responsible for paying damages to the victim of the negligencee
• HELD to be an employee of Mersey Docks, as a contract existed saying that he was an employee, they paid his wages, and had the power to sack him
• The court laid down a few guidelines for future similar cases
• The permanent employer will be the employer unless they can show that the person isn't their employee
• Who has the immediate right to control the employee's method of working?
• Identify the act of negligence and then work backwards to find who was best placed to prevent the act
• Who paid him? Who dismissed him? How long was the loan for?
• How the person is described in the contract is never conclusive - at best it is a statement of intent
• Viasystems v Thermal Transfer (2005)
• HELD - a worker can have more than one employer at the same time, who will be vicariously liable for the worker

Relationships that are Akin to Employment

• Various Claimants v Catholic Child Welfare Society (2012)
• Priests = nonces
• The school was deemed sufficiently in control of the priests for a relationship of employer/employee to exist
• The court established principles
• Who is likely to be in a financial position to compensate the victims?
• Tortious act done by employee on the behalf of the employer
• Was the tortious activity part of the employer's business activity?
• Has the employer essentially created the risk of the tort happening (they did allow nonces near children tbf)
• Was there control of the employee's activities (where, when, how, uniform)
• Cox v Ministry of Justice (2016)
• Where prisoners committed tortious acts it was obvious that the Prison Service was in the position of being able to pay out on claims, but more importantly, was best placed to assess what danger certain prisoners posed to others at key moments like meal times, and whether they were a risk in obviously dangerous areas like kitchens, Also, this was another case where the employer created the risk
•  Various Claimants v Barclays Bank PLC (2017)
• Bank arranged for potential employees to be medically examined by a doctor who abused the applicants
• HELD - the medical exams were to benefit the bank as they wanted to ensure the fitness of potential employees
• The bank may not have directed the doctor's actions, but created the conditions for the tort to be committed. The applicants didn't have much choice as a successful medical examination was a condition of employment set by the bank
• Armes v Nottinghamshire City Council (2017)
• Girl in foster care abused
• The council were vicariously liable - as this kind of liability was strict
• In addition, the council undertook a 'vetting and selection' process of parents, even though they didn't have control over the activities of the foster parents
• The council had the right to approve or disapprove of a placement and had the right to remove the child if they deemed it necessary

The Course of Employment

• An employer is not responsible for a tort committed by an employee outside the course of employment
• An employer may be responsible for a tort committed by an employee during the course of employment

A Frolic of his Own

• An employer is not liable for the torts committed by an employee who is on a frolic of his own. This means that if an employee does something not related to his work and is undertaken on his own count, then the employer will not be liable for a tort committed during the 'frolic'
• There are tests but the courts check vicarious liability on a case by case basis
• Storey v Ashton [1869]
• The defendant sent two employees in a horse and cart to deliver some wine. On the way back the two employees went on a diversion in order to do some business of their own. While doing this the claimant was run over, owing to the negligence of the employee driving the horse and cart
• HELD - the defendant was not liable for the negligence of his employee because he was on a frolic of his own
• Heasmans v Clarity Cleaning Co (1987)
• An employee hired to clean telephones was held to be acting outside his responsibilities when he used them for long distance calls

Frolics in the Context of Journeys and Detours

• Hilton v Thomas Burton (Rhodes) Ltd (1961)
• Four workmen allowed to use a van to travel to and from work were deemed to have acted outside their responsibilities by going to a cafe a short distance from the location of their job
• Employer not vicariously liable, as the journey was not permitted under the terms of employment
• Williams v Hemphill (1966)
• The employee's job was to carry passengers to Glasgow
• He took a detour
• The fact that he took a detour was not relevant. He had picked up passengers and so was still performing his role so the employers were vicariously liable
• Smith v Stages (1989)
• Employees who were paid for travel to and from work by means of being able to claim expenses caused an accident on the way home
• HELD - normally travel to and from work would not result in vicarious liability, unless the contract says otherwise. In this case the employer was vicariously liable as the employee was paid a normal day's wage for the day of travel
• The contract of employment is pretty much decisive in determining whether acts and journeys are things done in the course of a job for which an employer will be vicariously liable

An Authorised Act

• An employer is vicariously liable for the torts of his employee if the employee is doing an act authorised by the employer
• The general rule is that an employer is vicariously liable for an authorised act done in an unauthorised manner
• However, the employer is not responsible if the employee is acting beyond the scope of his or her employment
• Poland v Parr (1927)
• A contractor’s employee was, in the course of his employment, following close behind his employer’s wagon carrying sugar bags. Seeing a boy with a hand on one of the bags, the employee believed the boy to be stealing sugar and hit him. This caused the boy to fall and the wagon to run over his foot, leading to the loss of his leg. The boy had not, in fact, been stealing the sugar although the employee had believed so.
• Employer liable as there was an implied authority to act to protect the employer's property

An Authorised Act in an Unauthorised Manner

• Century Insurance v Northern Ireland Transport Board [1942]
• The defendants' employee, a petrol tanker driver, was unloading petrol from his tanker to underground storage in the claimant's garage when he struck a match to light a cigarette and then dropped the lighted match to the ground. This caused an explosion, damaging the claimant's property. The defendants were found to be vicariously liable for his negligence on the basis that what he was doing at the time was part of his job, even if he was doing it in a negligent way. It was agreed that the match was struck for his own purposes, not those of his employer, but nevertheless, in the circumstances in which it was done, it was still in the course of his employment
• Iqbal v London Transport Executive [1973]
• A bus conductor, trying to be helpful, drove a bus, although he was specifically forbidden to do so. His negligent driving caused damage
• HELD - the prohibition excluded a certain activity and therefore limited the sphere of the conductor's employment - hence the employers were not vicariously liable
• Why was the employer held to be vicariously liable in Century Insurance but not in Iqbal?
• In Century Insurance, the employee was acting in the course of his employment (i.e delivering petrol in a tanker) albeit in a negligent manner. However, in Iqbal, the employee was acting outside of the scope of his employment (i.e he was not employed as a driver) and there was an express prohibition forbidding him from driving a bus
• Bayley v Manchester Railway (1873)
• A railway porter pulled a passenger from a train, believing him to be on the wrong one, causing injury
• Employer held to be liable

Express Prohibition

• What happens when an employer specifically prohibits the employee from doing something, but they do it anyway?
• Limpus v London General Omnibus Co (1862)
• An omnibus driver who crashed whilst racing another bus was deemed to be performing his duties, albeit in a negligent wat, and the employer was still liable
• Twine v Bean´s Express Ltd (1942)
• A van driver was specifically told that he couldn't give lifts to certain classes of people
• He did and killed said person due to his negligent driving
• HELD - Employer not liable as picking up the person who died was not part of his job
• Rose v Plenty (1976)
• Milk float driver was told he couldn't pick up passengers or let children help with his deliveries
• Ignored both of these and hired a 13-year-old boy to help
• HELD - Employer liable, as the defendant was being negligent in the course of performing his duties
• SIDE NOTE - the courts may have been influenced in this case by the fact that the child had no one else to pursue for damages

An Unlawful Act of an Employee

• An employer will only be held to be vicariously liable for the unlawful acts of his/her employee if there is a closeness of connection between the employment and the unlawful act
• For instance, if a store security guard uses unreasonable and excessive force in stopping a shoplifter, then it is likely that their employer will be held to be vicariously liable. There is a closeness of connection between the employment and the unlawful act
• However, if the store detective punches a customer because she believes she is having an affair with her husband, then it is unlikely the employer will be vicariously liable. There is no closeness of connection between the employment and the unlawful act

What happens when the act is also a Tort?

• Lloyd v Grace, Smith & Co (1912)
• The solicitor's clerk's defrauding of the client was something that his employers were vicariously liable for because they should have been supervising him, as they were contracted to do as a part of his training
• Warren v Henley's Ltd (1948)
• Petrol pump attendant had a fight with a customer
• When the fight happened, the petrol had already been bought, so anything after that was not done in the course of the employee's job
• Employer not vicariously liable
• Lister and Others v Hesley Hall (2002)
• The claimants were residential students at a school for difficult children owned by the defendant. One of the wardens at the school had sexually abused a number of the children. The claimants argued that the owner of the school was vicariously liable for the harm they suffered as a result of the abuse
• HELD - The House of Lords held that the owner of the school was vicariously liable. They used a 'closeness of connection' test to determine the vicarious liability
• The test:
• A vicariously liable act was one in which:
• The wrongful act committed by the employee was authorised by the employer
• The employee carried out their duties in a wrongful or unauthorised way, but what they were doing was still their duty
• The court said an employer is liable for acts that they have not authorised, provided that the act itself is so connected with his authorised acts that it may be regarded simply as the way it was done
• The close link between the abuse and the duty of care of the warden made it fair to state that the employers were vicariously liable
• Dubai Aluminium v Salaam (2002)
• Where a fraud was perpetrated by someone who the solicitors in a firm had introduced to the claimants was deemed (under the Partnership Act 1980) to have been committed in the course of the solicitor's business
• The court used the 'so closely connected' test set out in Lister
• Which test do we use?
• The courts said that there isn't a definitive test. It involved a value judgment by the court based on all the facts. The Salmond test was only one such test
• Bernard v A-G of Jamaica (2004)
• A policeman who shot a member of the public over a disagreement concerning the use of a payphone was deemed to be acting in the course of his employment because:
• He had identified himself as a police officer
• He had shot the victim with a gun provided by his employers
• These two elements meant that what had happened was done in the performance of his duties
• Gravil v Carroll and another (2008)
• Fight between two rugby players during a match. Defendant broke a bone in Claimant's face
• CoA said that the defendant was doing his job (as a rugby player) in an unauthorised way, outside the instructions of his employer, but was still acting in the course of his employment, so the club was vicariously liable
• Mattis v Pollock (2003)
• Nightclub employed an unlicensed bouncer. After an altercation in the club, he went home, returned armed, and seriously assaulted the customer
• HELD - Club vicariously liable
• MAGA v Trustees of the Archdiocese of the Roman Catholic Church (2010)
• Issue whether or not the church was vicariously liable for child abuse committed against a non-catholic who had befriended the priest
• HELD - the church = vicariously liable
• The priest had a special role of working with young people and held a position of trust (passed the Lister test)
• Mohamud v Morrisons (2016)
• A cashier at a Morrisons petrol station got into a fight with a customer over printing a receipt
• Morrisons said there wasn't a sufficiently close connection between the cashier's job and his wrongdoing
• Supreme Court disagreed, stating that his job was to interact with the customers and respond to their enquiries 
• Unbroken series of events between attending to the claimant's enquiries and the fight so Morrisons held vicariously liable
• Various Claimants v Morrisons (2017)
• Employee committed a data breach
• The handling of data was something that the employee was authorised to do, but it was not done in the course of his duties and was therefore not so closely associated with his role that Morrisons should be held vicariously liable
• Frederick v Positive Solutions (2018)
• Fraudulent investment opportunity offered to the claimants via a virtual portal owned by the claimants did not give rise to vicarious liability
• The person they had been dealing with did work for the defendants, but the scam was part of a recognisably separate venture and not an integrated part of the defendant's business

Vicarious Liability and Statutory Duties

• Majrowski v Guy's and St Thomas' Hospital NHS Trust (2005)
• Claimant sought damages, saying that he had been bullied by his manager and that the bullying amounted to harassment under the 1997 Act
• HELD - employer liable
• BUT - is it fair in the circumstances to find vicarious liability on the part of the employer?
• NOTE - since everyone knows that harassment is an offence, if the person harassing demonstrates a pattern of behaviour that has not been addressed by the employer then they are much more likely to be vicariously liable

Violence Between Employees

• Weddall v Barchester Healthcare (2012)
• Employee was called by his boss and asked to do an extra shift
• Employee was drunk and formed the impression that the boss was mocking/making fun of him, so he went and assaulted him
• HELD - the 'close connection' test set out in Lister could not be established
• The employee was off duty at the time of the call
• Rather than acting spontaneously, the employee had to cycle for 20 minutes to the care home before the assault took place
• It was an independent venture for which the care home was not vicariously liable
• Wallbank v Wallbank Fox Designs (2012)
• CoA said that the employers were vicariously liable for the employee's act (the boss told him to do something and was attacked as a result) as it was a violent and instant response to what was being done by the boss
• EXAM TIP -Just deal with whether something has a 'close connection' with the employee's job and deal with it factually in terms of points that the court would think indicated vicarious liability

Employer's Indemnity for Liability Suffered in Vicarious Liability Situations

• A company/employer can successfully sue the employee in a separate claim to try and recover its losses paid out as a result of the employee's tortious act
• This type of damages recovery is called an indemnity
• Indemnity was established in a case called Lister v Romford Ice and Cold Storage (1957):
• A lorry driver employed by the defendants ran over and injured his own father who was also an employee of the firm. The firm then sued the son. This was allowed because:
• the careless driving was a tort and also a contractual breach of the implied duty of care to exercise reasonable care while exercising his duties
• CRITICISM OF DECISION
• under the principles of vicarious liability, the employer is frequently best placed to pay out damages. Allowing them to recover these sums essentially means that they aren't exposing themselves to any risk, and therefore they will not themselves be too careful about regulating the performance of the employees in doing their job
• PRESENT POSITION
• Insurers giving cover to employers have agreed that they will not take part in any indemnity payouts unless there is evidence a fraud had taken place in which the employer and employee have colluded

Position of Independent Contractors

• Principle - an employer is not usually responsible for the torts of an independent contractor on a vicarious liability basis
• Independent contractors CAN cause vicarious liability for employers when they complete jobs on behalf of them in certain circumstances
• This is where a duty exists on an employer for them to do something, but they delegate the performance of the job to a contractor. The problem in these situations is that the work might be capable of being delegated but the liability for poor performance is not

Delegation

• There are certain roles that cannot be delegated. If the employer tries to delegate one of said roles, and the contractor commits a tort, in certain circumstances they will never be able to avoid vicarious liability for the contractor's torts
• Typically, according to the Annie Woodland case, these would involve:
• Cases where duties to children, patients and other vulnerable persons are concerned
• Where a duty of care to protect from harm exists (both statute and common law available)
• Where the claimant had no control over the contractor's performance
• Where the employer had delegated an aspect of the duty of care to the contractor who then had control over the claimant's safety
• The contractor has simply been negligent in the performance of that duty - see also the duty of care imposed on Occupiers under the 1957 Occupier's liability Act - e.g a duty to pick a competent practitioner
• Razumas v Ministry of Justice
• The court found that there was a duty on the part of the ministry to provide access to healthcare - but especially NOT to oversee the quality of the treatment (they had delegated the duty to provide healthcare but they did not and could not control the quality of care
• Padbury
• Held that for an employer to be vicariously liable, the negligence of the contractor would have had to have been central to the work that they had been contracted to perform, and not merely incidental to it. Placing a tool required for the job in a position where it was likely to cause harm if it fell was deemed to be incidental to the main duties

Why is Vicarious Liability imposed? (Sean's summary)

• Where there is sufficient control by the employer over whatever it is the employee does as part of their job. Sometimes there is a question over employees that are very skilled, and the suggestion is that since they have a level of knowledge that no one else does, their work cannot be checked. In these circumstances, the employer should not be liable
• The courts have got around this by saying that as soon as employers start profiting from the work and expertise of staff, setting performance and fee earning targets for these people, so that sometimes there isn't enough time for them to do their job properly, then the employers should be responsible for any tort committed
• Benefits to employers
• If employers benefit, they must also shoulder the risk. There is also the argument that the party most financially able to meet a claim should therefore meet it
• Financial Resources
• Since the risk is usually passed on to the consumer in the case of big businesses - in the form of insurance and damage payouts, the courts are always reluctant to endorse an inequality of bargaining power
• Preventing Negligent Recruitment
• Vicarious liability will place this burden on employers, whose wrong selection of workers in technical/sensitive positions is often the prime source or tortious incidents in any event
• Recruitment aside, there is evidence that imposing vicarious liability promotes better standards