Vicarious Liability

Vicarious liability applied where it is fair, just and convenient to do so. (Viasystems v Thermal
Transfer) Discuss the justification for VL and whether the recent developments in case law have
overcome the limitations in VL in modern conditions.
Vicarious liability (VL) is a form of joint liability in both person who committed the tort and the
employer can be sued. VL arises when the relationship between the tortfeasor and the party who
becomes VL which justifies giving the latter responsibility for the acts of the former. In modern law,
this is usually the relationship between the employer and employee and so VL cases usually involve
events which happen at or in connection with work.
VL has become a practical tool and several justifications. Firstly, it helps to compensate the victims
since it allow liability to be placed on a party who is likely to be insured, where the tortfeasor will
probably not have the resources to meet the claim. It is obvious that the employer is in the best
financial position to meet a claim either because its resources are simply greater or more often, they
have relevant insurance coverage. However, the doctrine of VL is a form of strict liability and has the
repercussions of placing undue burdens on businesses with negative economic impacts while
distorting the ideas of corrective justice.
Secondly, it gives effect to the principle of loss distribution so that claimant is able to obtain
compensation from a party who has the funds to actually pay. The rationale is that since the
employers benefit from the work of their employees and ought to be liable for any damage the
employee may have caused in his performance. This is linked to the profits target set and it would
beunfair if employees were sued for negligence which mainly caused by the cost-cutting practice of
the employer.Thirdly, this leads to theories of tort which is to underpin the justification namely
economic efficiency and deterrence. By placing the burden on the employer, hence, this increases
the insurance premium forcing their business cost will increase, reducing their competitiveness. This
is a strong deterrent factor in causing employees not to cause injury to others. Thirdly, this is based
on the overall justification based on social convenience and rough justice as illustrated in ICI Ltd v
Shatwell.
Liability is not automatically placed on the employer, where the general rule is the VL arises from a
contract of services (employee) and not a contract for services (independent contractors). The courts
would have to consider the following tests. In the past, the usual way of deciding whether the
person is the employee is to look at the degree of control exercised over the employee. If the
employer retained control over the work and gives instructions, the person is an employee. (Yemen
v Noakes) The control test is however, an unrealistic way of distinguishing in modern employment
situations where employers lack the necessary expertise to supervise.
The integration test was put forward by Lord Denning in Stevenson, Jordan and Harrison v
Mcdonald and Evans, where it has to be asked whether the employee was the integral part of the
business i.e whether he is part of the organisation structure. Hence, an independent contractor
would work for the business but as an accessory rather than an integral part of it. In practice, the
test is too vague to apply. Today, the courts would look at the economic test (multiple test) where as
illustrated in Ready Mixed Concrete (South East) v Minister of Pensions. The courts would consider
the following factors namely whether the employee provides work in return for payment, have
agreed to work under the control of the employer and the situation characterised as a contract of
employment is the method of payment, tax and insurance, provision of tools, working hours and the
level of independence.
Until recently, rules governed under Mersey Docks and Harbour Board v Coggins and Griffiths,
where someone was injured by a negligently-driven crane. The crane and the crane driver had been
leant to a firm of stevedores. The stevedores had immediate control over the relevant operation
which the crane was performing, but had no power to direct how the crane driver should control the
crane. The stevedores and the Harbour Board disputed who was vicariously-liable for the crane
drivers negligence. The House of Lords upheld decisions of lower courts that the Harbour Board,
being the crane drivers general employer, retained responsibility for his negligence. A number of
principles were laid out, namely, permanent employee is usually liable unless they can show good
reasons why responsibility should be placed on employer who borrowed, reference should be made
to the terms of contract, though this is not conclusive and where the employee is lent it is inferred
that the hirer is the employer if the equipment and the employer is hired.
The Mersey Docks principle has enabled the courts to choose between two possible employees.
Today, in Viasystems (Tyneside) Limited v Thermal Transfer (Northern) Limited & Others, the
principle of double indemnity was introduced. It was considered to be more appropriate to use the
principles of double indemnity to share principles between two possible employers. It now, seems
that joint liability will apply in many borrowed employee cases since there is always shared
responsibility. Even if, the permanent employer is not present, they would have usually instructed
the employee how to do the job, perhaps given training while borrowing employer will usually give
day-to-day instructions. (though this depends on the type of work involved)This is a landmark case,
and a brave decision, in that it overturns the long-standing assumption, stemming back to Laugher v
Pointer (1826) 5 B&C 547 that there could be no dual vicarious liability.
Viasystemsis a landmark case, and a brave decision, in that it overturns the long-standing
assumption, stemming back to Laugher v Pointer (1826) that there could be no dual vicarious
liability.Giving the leading judgment, May LJ held that the enquiry should concentrate on the
relevant negligent act and then ask whose responsibility it was to prevent it. The identity of the
employer was not determinative. The circumstances in which dual vicarious liability will exist will no
doubt be developed in future case-law, and in the meantime the boundaries are likely to be tested
by defendants adding other defendants in cases where the point is arguable. Given that out-
sourcing, sub-contracting and the use of agency staff is an integral part of the modern economy,
such situations are likely to occur relatively frequently. This is a bold decision that reflects the reality
of the modern economy, and this will be an exciting area of law to watch.
An employer is only liable when the employee commits the tory within the course of employment.
Hence, the employer will not be liable if the conduct falls outside the course of employment that is
when he is in the frolic of his own. (Joel v Morison) As such, the employee has to be within the
reasonable time and space of the employment (Stanton v NCB; Hilton v Thomas Burton) and within
the work mode (Century Insurance v Northern Ireland), which does not include criminal acts such as
personal vengeance (Warren v Henleys)
Today, area of VL for criminal acts is not quite tidy because of the case of Lister v Hesley Hall which
laid down the close connection test. The boys at a school for children with emotional difficulties
had been sexually abused by the warden by the employee of the defendant, where the claimants
claimed that the defendants were VL. Clearly, the abuse could not be described as warden merely
doing the job in an unauthorised way as was stated in the Salmond test. Here, the House of Lords
deported from this approach in cases where the wrongdoing was intentional rather than careless. In
order to answer this, it is necessary to look at the task an employer had delegated to their
employee. The school had the task of looking after the boys in its care, where it was the wardens
duty. The sexual abuse was inextricably interwoven with his performing the task since it was carried
out on the defendants time on their premise and during the day-to-day routine of looking after the
children. Some argued that this is far from being closely linked and sexually abusing children could
be said to be the complete opposite of the job of looking after them.
In Dubai Aluminium v Salaam, the House of Lords confirmed that the correct test was whether
there was close and direct connection between the employees duties and the criminal acts.
Unfortunately, the phrase is fallible considering that the test of closeness is to be passed when it is
fair for liability to be imposed. What exactly makes it fair or unfair to impose liability is not imposed.
In fact, Lord Nicholls admits that what is fair and proper inevitably involves a value-judgement
based on all of the circumstances and precedents. The Salmond test was just that one test and did
not provide a conclusive answer in every circumstances and it was possible that the employees
behaviour might satisfy the Salmond test and yet the facts when taken as a whole might suggest that
there was no VL.
In Mattis v Pollock, VL likely to be found in cases where using violence was an expected part of the
employees job than where it was not. Here, the case concerns a bouncer who went back home to
retrieve weapon to seek revenge by stabbing a customer thereafter. The act was a culmination of a
series of incidents in which he behaved in an intimidating way to customers. It was held that it was
not a separate event but part of the whole series of event springing from the bouncers violent
behaviour towards the group of customers. The limits of Lister principle was seen in N v Merseyside
Police where the claimant who came out drunk from a nightclub was offered a ride home by a police
officer who raped her. The judge distinguished this case from Lister because the warden had been
given the duty of looking after the boys and not in N.The only connection that existed was the
uniform and warrant card to persuade the victim.
However, the Lister principles was questioned in the latest case of Maga v Birmingham Roman
Catholic Archdiocese Trustees (2010), whether a Roman Catholic priest (Father Clonan), who had
sexually abused a non-Catholic boy he had befriended and employed to undertake work related to
the church and otherwise, couldbe said to be acting in the course of employment. in MagaLord
Neuberger M.R. found thatdespite the fact that the contact between priest and victim was based on
attendance at a church disco andperforming odd jobs within and outside the church, Father Clonan's
role as a priest had allowed him todraw the claimant further into his sexually abusive orbit by
ostensibly respectable means connected withhis employment as a priest at the church. In view of his
work in bringing the gospel to othersand thereby gaining their trust, he was never off duty. One
obvious difficulty which derives from the failure of the HL in Lister is to provide a single version of its
close connection test. It was contended that the focus should be on the relationship between the
employer and the victim i.e. the nature of the duties given to the employee rather than the facts of
each case or drawing questionable analogies as illustrated in the case of Maga.

There is also another problem of the doctrine of VL which is employers indemnity. Because VL
makes employer and employee are joint tortfeasors, employers are allowed to in turn recover some
damages from the employee based on the Civil Liability (Contribution) Act 1978 or the common
principles in Lister v Romford Ice and Cold Storage, where the lorry driver ran over his own father. It
was held that it was not only a tort against the father but also a breach of an implied term in the
employment contract. The employer is entitled to damages equivalent to that paid to the father. The
employers indemnity was criticised for undermining the whole principle of VL which is based on the
employers best ability to pay out of insurance.
In conclusion, the doctrine is justified today even in situations like Lister which gives effect to the
foundation principles of tort which is to ensure that tortious conducts are corrected through
compensatory payments and spreading losses to those able to bear them. While the phrase fair, just
and convenient is vague, this allows flexibility to develop and to be applied in new situations like in
Lister and being mindful of the need to uphold fairness.