Carlos, an employee of Toys R Good, is restocking the shelves when he carelessly drops a

large metal box on a customer breaking their leg. The same afternoon, while driving the
store’s delivery van, he takes a detour in order to place a bet on a horse at the local betting
office. On the way he causes a road traffic accident in which a child is killed.
a) With respect to suing in tort explain to the directors of Toys R Good the principle of
vicarious liability, and how it is applied in a business context.
b) Discuss the liability in tort, if any, of Toys R Good in respect of these incidents.

If an employee has committed a wrongful act which was authorized by the employer and
subsequently has harmed a third party then the employer will be said to have full liability to the
injured party.  However, when it is not clear whether the act committed by the employee was
authorized the details of the case need to be examined in more detail.

Vicarious liability is governed by the law of tort meaning that it is dealt with in a civil court and is
concerned with a claim between individual parties as opposed to the state bringing a claim against
an individual party.

If an employee commits a wrongful act against a third party while undertaking his employment the
employer will be said to be vicariously liable for the act committed by his employee. The employer
will then be treated as if he had also committed the act. This means that in the case of vicarious
liability the third party is able to bring the claim against both the employer and the employee.

The most important element to establishing a case for vicarious liability is that the wrongdoer be
acting as a servant or employee, and that the wrong done be connected to the employee’s course of
employment. Vicarious liability can only be imposed if it is proved that the employee was acting “in
the course of employment.” This criteria is essential, and requires a clear connection between the
employment duties and the employee’s acts complained of. As such, most employer’s will be
insured in order to avoid such liability. In addition, in order to establish vicarious liability, it is
necessary to show that an employee was employed under a contract of service, or in the case of an
independent contractor, a contract for services. English law has also established that an employer
can be held vicariously liable for a breach of statutory duty by an employee, for example in
circumstances such harassment or bullying within the workplace.

For an employer to be held liable, the wrong must be committed “within the course of employment.”
This criteria is a question of fact, and it is immaterial whether the wrong committed by the employee
was authorised or not. An employer will only avoid liability in this situation if it can be shown that an
employee acted “on a frolic of his own,” or in other words, if the employee acted in a way that was
unconnected with his employment. Recently, the courts have been willing to impose liability in far-
reaching circumstances on the issue of whether the wrong was committed “in the course of
employment.” Important in this context is the case of Lister v. Hesley Hall Ltd. This case establishes
that an employer cannot avoid liability by showing that an employee engaged in an intentional and
unauthorised wrongdoing. Thus, the important factor in establishing vicarious liability is the
connection with the “course of employment.” However, it is important to note that an employer
cannot avoid liability if an employee acts in a way that could be described as “incidental” to his
employment and the duties to which he is entrusted with. Therefore, in establishing whether
vicarious liability exists, the question to be asked is firstly, whether the act complained of was
committed “in the course of employment” and secondly, whether the act is reasonably “incidental” to
the employee’s employment duties. If there is a connection, it is irrelevant whether the employee’s
act was unauthorised.

In the wake of Lister, a more recent trend has been to impose liability upon an employer for violent
acts committed by employees. In the Court of Appeal case of Mattis v. Pollock (t/a Flamingos
Nightclub) a nightclub owner was held vicariously liable for the violent acts of an employed doorman.
The Court of Appeal applied the rationale of Lister and held that a “broad” approach was required in
assessing whether an individuals acts were sufficiently connected with the duties of his employment
so as to justify imposing vicarious liability.

• Why is vicarious liability imposed upon employers?

a) Employer benefits from employees work
b) Recruitment and selection
c) Solvent defendant

Aspects of Vicarious Liability

 Mode of doing the work
 Express prohibition
 Connection with work
 Fraud
 Criminal assaults
1) Carlos breaking a customers leg by accidentally dropping a large metal box whilst restocking the
shelves; and

2) The death of a child in a RTA caused by Carlos when driving the store’s delivery van after
betting on a horse.

The claimant will only be able to successfully sue toys r good for the injury to his/her leg if he can
prove:
A. The act was committed by an employee of toys r good and not an IC
B. The employee did actually commit a tort
C. The act was committed in the course of the employee’s employment.

A. Is Carlos an employee?
o Yes! Straightforward. We are told he is and even though the courts will at times look beyond
the description’s given by the actual parties to ascertain the real nature of the relationship
there is nothing to suggest that Carlos is an IC.

B. Did Carlos Commit a tort?

o Did he owe a duty of care to the claimant?
o Yes! Reasonably foreseeable that stacking the shelves in a careless way could cause
injury to a person of close proximity (neighbour principle, Donoghue v Stevenson)
o Did Carlos breach his duty of care?
o Yes! Reasonable man would have been less careless when stacking the shelves.
o Did Carlos’s breach of duty cause the C to break his/her leg?
o Yes! But for Carlos dropping the metal box the leg would not have broken (Barnett v
Chelsea....); and
o personal injury to customer was a reasonably foreseeable consequence of the
breach (Wagon Mound).
o Does carlos have any defence?
o Not really!

c. Did Carlos commit the tort in the course of his employment?

o He was restocking the shelves. Assuming that this was one of his duties as an employee, he
dropped the box when carrying out an act authorised by his employer, and Toys R Good wd
therefore be liable.
o Toys R Good may try to argue that he was not authorised to carry heavy boxes up ladders during
restocking but even then they would still be liable as Carlos would still be carrying out an
authorised act in an unauthorised way as in Century Insurance v N1 Transport Board:
The deceased child’s estate will only be able to sue Toys R Good for the child’s death if they can
establish:
A. The act was committed by an employee of toys r good and not an IC
B. The employee did actually commit a tort
C. The act was committed in the course of the employee’s employment.

A. Carlos is an employee of Toys R Good

B. Tort?
a. Clearly Carlos, as a driver owed a duty of care to all other road users. This is an established
duty of care.
b. If he caused the RTA, it can be assumed that he did not meet the standard of care of a
reasonably competent driver.
c. It would seem that his breach of duty caused the RTA that killed the child (clearly more
evidence needed!).
d. Defence?

C. Was Carlos acting in the course of his employment?

o Was he carrying out an authorised act? Doubtful. May have been authorised to drive store van
but went on detour to place a bet at betting which has nothing to do with his job and seems akin
to the 4 workmen in Hilton v Thomas Burton (Rhodes) Ltd (1961) who were on a frolic of their
own and hence not acting within the course of their employment.

b) Problem
Application of law to the problem
 Mode of doing the work
Limpus v General Omnibus [1862]
Racing bus drivers
Cf Beard v London General Omnibus Co [1900]
Bus conductor driving
Century Insurance Co Ltd v NIR Transport [1942]
Petrol tanker driver threw away a lighted match
Authorised act done in unauthorised way
 Frolics of their own
FHilton v Thomas Burton Ltd [1961]
Vehicle detour case
VICARIOUS LIABILITY
INTRODUCTION
Employers are vicariously liable for the torts of their employees that are committed during the course of
employment.
Reasons for vicarious liability
According to Michael A. Jones, Textbook on Torts, 2000, p379, several reasons have been advanced as a
justification for the imposition of vicarious liability:

(1) The master has the 'deepest pockets'. The wealth of a defendant, or the fact that he has
access to resources via insurance, has in some cases had an unconscious influence on the
development of legal principles.
(2) Vicarious liability encourages accident prevention by giving an employer a financial interest
in encouraging his employees to take care for the safety of others.
(3) As the employer makes a profit from the activities of his employees, he should also bear
any losses that those activities cause.

Liability
Three questions must be asked in order to establish liability:

(1) Was a tort committed?

(2) Was the tortfeasor an employee?
(3) Was the employee acting in the course of employment when the tort was committed?

EMPLOYEE OR INDEPENDENT CONTRACTOR?

Employers/masters will only be liable for the torts of their employees/servants. They will not usually be liable
for the torts of their independent contractors (see below). It is therefore necessary to establish the status of the
tortfeasor.
The intention of the parties is not necessarily conclusive. Contrast, for example:

· Ferguson v Dawson Partners [1976] 3 All ER 817 - a building worker who at the time of
hiring was expressed to be a 'labour only subcontractor' was held to be an employee because
in all other respects he was treated as an employee. The statement had been made for tax
and national insurance purposes.

· Massey v Crown Life Insurance [1978] 2 All ER 576 - there was a detailed written contract
and the parties' intention prevailed.

Various tests for establishing an individual's employment status have been developed through the cases:
(a) The control test
This was the traditional test. In Collins v Hertfordshire CC [1947] 1 All ER 633, Hilbery J said: "The distinction
between a contract for services and a contract of service can be summarised in this way: In one case the
master can order or require what is to be done, while in the other case he can not only order or require what is
to be done, but how it shall be done."
But in Cassidy v Ministry of Health [1951] 1 All ER 574, Somervell LJ pointed out that this test is not
universally correct. There are many contracts of service where the master cannot control the manner in which
the work is to be done, as in the case of a captain of a ship. He went on to say: "One perhaps cannot get
much beyond this 'Was the contract a contract of service within the meaning which an ordinary person would
give under the words?'"
(b) The nature of the employment test
One accepted view is that people who have a 'contract of service' (an employment contract) are employees,
but people who have a 'contract for services' (a service contract) are independent contractors (Ready Mixed
Concrete v Minister of Pensions and NI [1968] 1 All ER 433).
(c) The 'integral part of the business' test
This test was proposed by Lord Denning in Stevenson, Jordan and Harrison Ltd v McDonald and Evans [1952]
1 TLR 101: 'It is often easy to recognise a contract of service when you see it, but difficult to say wherein the
difference lies. A ship's master, a chauffeur, and a reporter 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 contributor are employed under a
contract for services. One 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.'
(d) Allocation of financial risk/the economic reality test/multiple test
Lord Wright suggested a complex test involving (i) control; (ii) ownership of the tools; (iii) chance of profit; (iv)
risk of loss (Montreal v Montreal Locomotive Works [1947] 1 DLR 161). In a later case, Cooke J referred to
these factors and said that the fundamental test was: 'Is the person who has engaged himself to perform these
services performing them as a person in business on his own account?' If the answer is yes, it is a contract for
services; if no, it is a contract of service. There is no exhaustive list of considerations relevant to determining
this question, and no strict rules about the relative weight the various considerations should carry in a
particular case. Factors which could be of importance were: (i) whether the person hires his own helpers; and
(ii) what degree of responsibility for investment and management he has (Market Investigations v Minister of
Social Security [1968] 3 All ER 732).
These factors were considered to be significant in:

· Ready Mixed Concrete v Minister of Pensions and NI [1968] 1 All ER 433 - 'owner-drivers'
who delivered concrete in vehicles purchased on HP from an associated company, painted in
company colours and which could not be used for private purposes or other haulage business,
were employed under a contract of carriage than of service. Ownership of the assets (the
vehicle), the chance of profit and the risk of loss were the driver's. These factors were
inconsistent with a master-servant relationship.

Lending an employee
If an employer lends an employee to another employer on a temporary basis, as a general rule it will be
difficult for the first employer to shift responsibility to the temporary employer. See:

· Mersey Docks & Harbour Board v Coggins Ltd [1946] 2 All ER 345 - the Board was liable for
the negligence of a crane driver hired, along with a crane, to Coggins. The contract provided
that the driver was to be the servant of Coggins but the Board continued to pay his wage and
had the power to dismiss him. Coggins had immediate control over what the driver should do,
 but no power over how the crane should be operated. The HL held that the driver remained
the servant of the Board.

THE COURSE OF EMPLOYMENT

An employer will only be liable for torts which the employee commits in the course of employment. There is no
single test for this, although Parke B famously stated in Joel v Morison (1834) 6 C&P 501 at 503, that the
servant must be engaged on his master's business, not 'on a frolic of his own'.
An employer will usually be liable for (a) wrongful acts which are actually authorised by him, and for (b) acts
which are wrongful ways of doing something authorised by the employer, even if the acts themselves were
expressly forbidden by the employer (Salmond & Heuston on the Law of Torts, 1996, p443). Liability for
criminal acts will also be considered.

Authorised acts
If an employer expressly authorises an unlawful act he or she will be primarily liable.

Wrongful modes of doing authorised acts

In the following cases it was held that the employer was vicariously liable for torts of the employee:

· Limpus v London General Omnibus Co (1862) 1 H&C 526 - bus drivers racing, despite a
prohibition, caused a collision.

· Bayley v Manchester, Sheffield and Lincolnshire Railway Co (1873) LR 8 CP 148 - a porter,

believing a passenger was on the wrong train, violently pulled him off, causing injury.

· Century Insurance Co v Northern Ireland Transport Board [1942] 1 All ER 491 - a petrol
tanker driver, smoking a cigarette threw away a match, causing an explosion.

· Rose v Plenty [1976] 1 All ER 97 - a milkman, contrary to express instructions, employed a

13-year-old assistant, injured by the milkman's negligent driving. The act here was done for
the employers' business.

In the following cases it was held that the employer was not vicariously liable:

· Beard v London General Omnibus Co [1900] 2 QB 530 - a bus conductor drove a bus
injuring a pedestrian.

· Twine v Bean's Express Ltd [1946] 1 All ER 202 - a hitchhiker had been given a lift contrary
to express instructions and was fatally injured. Lord Greene MR said that the servant was
doing something totally outside the scope of his employment, namely, giving a lift to a person
who had no right whatsoever to be there.

· Hilton v Thomas Burton (Rhodes) Ltd [1961] 1 All ER 74 - workmen drove seven or eight
miles for tea, immediately after finishing their lunch in a pub. The van overturned and a
passenger was killed
Criminal acts
An employer will not usually be liable for the criminal acts of employees. For example:

· Keppel Bus Co v Ahmad [1974] 2 All ER 700 - a passenger who objected to a bus
conductor's treatment of another passenger and then insulting language was assaulted by the
conductor. The employer was held not liable by the Privy Council. Lord Kilbrandon said that
insults to passengers are not part of the due performance of a conductor's duty.

· ST v N. Yorkshire CC [1999] IRLR 98 - a deputy headmaster of a special school, responsible

for caring for a handicapped teenager on a foreign holiday, sexually assaulted him. Butler-
Sloss LJ said that this was not an unauthorised mode of carrying out a teacher's duties on
behalf of his employer. Rather it was a negation of the duty of the council to look after children
for whom it was responsible.

However, if the employee performs their duties in a criminal manner, an employer may be liable. See:

· Morris v Martin Ltd [1965] 2 All ER 725 - a fur coat sent to cleaners was stolen by the
employee whose job it was to clean the coat. The cleaners were liable for the theft.

· Nahhas v Pier House Management (1984) 270 EG 328 - a porter entrusted with keys by a
tenant, entered her flat and stole jewellery. The employers were liable for negligently
employing a 'professional thief' and breaching a duty to protect the plaintiff's flat.

· Vasey v Surrey Free Inns [1996] PIQR P373 - the plaintiff was attacked by two doormen and
a manager employed by the defendant after he had kicked a door, breaking glass. The CA
held the defendants vicariously liable because the attack was a reaction to the damage to the
door for the protection of the employer's property and was not a private quarrel unrelated to
the employer's duties.

THE INDEMNITY PRINCIPLE

There is a term implied at common law into contracts of employment that an employee will exercise all
reasonable care and skill during the course of employment. An employee who is negligent is in breach of such
a term and the employer who has been held vicariously liable for the tort may seek an indemnity from the
employee to make good the loss.

· Lister v Romford Ice [1957] 1 All ER 125. A father was knocked down by his son, who was
employed by Romford Ice, while backing his lorry in a yard. The employers were vicariously
liable for the son's negligence and their insurers met the father's claim. The insurers sued the
son in the company's name, exercising their right of subrogation under the contract of
insurance. By a majority, the House of Lords held that the son was liable to indemnify the
employer and consequently the insurers.

This case lead to controversy about insurers forcing employers to sue employees, which would lead to poor
industrial relations. Employers' liability insurers later entered into a 'gentleman's agreement' not to pursue such
claims unless there was evidence of collusion or wilful misconduct (See further: Gardiner (1959) 22 MLR 552;
Hepple & Matthews, Tort: Cases and Materials, 1991, p881).

LIABILITY FOR INDEPENDENT CONTRACTORS

In Alcock v Wraith [1991] 59 BLR 16, Neill LJ stated: "where someone employs an independent contractor to
do work on his behalf he is not in the ordinary way responsible for any tort committed by the contractor in the
course of the execution of the work …
The main exceptions to the principle fall into the following categories:

(a) Cases where the employer is under some statutory duty which he cannot delegate.
(b) Cases involving the withdrawal of support from neighbouring land.
(c) Cases involving the escape of fire.
(d) Cases involving the escape of substances, such as explosives, which have been brought
on to the land and which are likely to do damage if they escape; liability will attach under the
rule in Rylands v Fletcher (1868) LR 3 HL 330.
(e) Cases involving operations on the highway which may cause danger to persons using the
highway.
(f) Cases involving non-delegable duties of an employer for the safety of his employees.
(g) Cases involving extra-hazardous acts."

Neill LJ then examined whether there was a further exception which could be relied upon in cases of nuisance.
He referred to Matania v National Provincial Bank [1936] 2 All ER 633, where the Court of Appeal was
concerned with a claim for damages for nuisance caused by dust and noise during building operations;
Slesser LJ concluded that the work did constitute a hazardous operation within the exception to the general
rule. Neill LJ then stated that both the general rule and the exceptions apply whether the action is framed in
negligence or nuisance. Furthermore, he was not aware of any different approach being adopted in an action
for trespass.

Vicarious Liability
 General Rule: a person who commits the tort will be personally liable.
 Exception: Vicarious liability –gives the C the ability to hold someone other than the person
who commits the tort, liable.
 The Claimant can sue both the person that committed the tort and their employer.
 Q: Why often advantageous for C to sue employer instead of employee who committed the
tort?
o A: more likely that employer will be able to pay damages (either personally or under
insurance policy).

Vicarious Liability arises most frequently in relation to employer’s liability for employees, but can also
exist between
o Principal and agent;
o Business Partners;
o Vehicle Owners and Delegated Drivers.

General Principles Employee/employer

A relationship that is recognised as giving The person who commits the tort must be an
rise to vicarious liability must exist employee cf independent contractor.
 A tort must have been committed by the The employee must have committed a tort
relevant party
The tort must have been commited as The tort must have been committed in the
part of the dealings of that relationship course of the employees employment

Principle 1: person committing the tort must be an employee

-Employer only liable for torts committed by employees, not independent contractors (‘IC’s).
Distinction between employees and IC’s not always clear cut.
Key: way in which work is done, not the type of work.
The control test: (traditional test). Distinguishes an employee and IC according to whether the
employer had the right to control the nature of the work done/how it must be done. If the person was
engaged to do a particular task but allowed discretion as to how/when to do it he would be more like
an IC.
BUT: unrealistic to determine relationship purely on level of control exercised by employer. Many
types of work are skilled and those in a managerial position cannot dictate to their skilled employees
how to carry out their work eg. an airline company cd not tell a pilot how to fly a plane!
In Ready Mixed Concrete ltd v Minister of Pensions (1968), it was held that 3 conditions had to
be met before a worker wd be considered to be an employee:
i) The employee must provide work/skill for the employer in return for wage/some other
remuneration.
ii) Employee agrees expressly/impliedly that they will work under employer’s control.
iii) All other circumstances are consistent with it being characterised as a contract of
employment.

Other circumstances that might be inconsistent/consistent with it being a contract of employment?

- Provision of Equipment: where the person is required to pay for his own materials or is
allowed to employ his own staff to do the job, more like an IC.
- TAX/NI: Employees usually have NI and paye deductions made at source, IC’s are
responsible for own contributions
- Method of payment: employees usually receive regular payments (weekly/monthly). IC’s
more likely to receive lump sum.
- Working Hours: employees have fixed/regular working hrs. IC’s more likely to set their own
work schedule.

- Principle 2: Tort must actually have been committed

-
- Eg if claimant alleging employer is liable for employee’s negligence , must first establish:
-
- I) Employee owed claimaint a duty of care (remember Donoghue v Stevenson’s neighbour
principle/ Caparo v Dickman for new duty situations)
-
- Ii) Employee breached duty of care
-
- Iii) breach of duty caused damage to the claimant (factually and legally)
- Iv) employee has no defence
 - Principle 3:Employer only liable for torts committed in the course of the employee’s
employment (and not those committed when employee on frolic of his own)

Employee will be acting within scope of employment when performs:

- Acts that are authorised by his/her employer:
o straightforward – if the employee commits a tort by when carrying out an act
authorised by his employer, the employer will be liable.
- Acts which although not authorised by the employer are so closely connected with what the
employee was supposed to be doing that they are carrying out an authorised act in an
unauthorised way
 eg Century Insurance v N1 Transport Board: driver employed to deliver
petrol by transferring it from his lorry to a storage tank. When doing so he lit a
cigarette and threw the match on the ground causing an explosion. Held driver
was acting in course of employment (doing what he was supposed to be doing
just in a careless manor).
 Express prohibitions: an employer may still be liable if the employee commits
a tort when carrying out their job in an expressly prohibited manner. In
Limpus v London General Omnibus Co (1862) a bus driver who had been
given written instructions not to race, disobeyed the order and while racing
another bus he collided with the C’s bus and damaged it. The ct held that he
was doing a job he was authorised to do just in a prohibited manner and so
was still acting in the course of his employment.
 Unlawful acts: even where an employee commits a criminal act, the employer
may still be vicariously liable if there is a ‘closeness of connection’ between
the employee’s wrongful act and the tasks that he was supposed to be
carrying out. In Lister and Others V Hesley Hall Ltd [2002] , C’s were at a
boarding school for difficult children when they were sexually abused by one
of the warden employees. The Ct held that the school was vicariously liable
because the abuse occurred on the employer’s premises whilst the employee
was engaged in performing his duties and the school shd have been aware of
the obvious risk of sexual abuse.

Employer will not be vicariously liable when:

- Employee acting beyond the scope of the employment eg: Beard v London Omnibus Co
(1900) where a bus conductor drove a bus around the front of the depot as he knew it was
urgently needed and a driver cd not be found. Whilst doing so he injured a mechanic. As it
was no part of the conductors duties to drive a bus he was acting beyond the scope of his
employment and the bus company was not vicariously liable.
- Frolics of their own: employers not responsible for employee’s acts that have nothing to do
with their employment. In Hilton v Thomas Burton (Rhodes) Ltd (1961) 4 workmen were
authorised to use their employers van to travel to work on a demolition site. After half a days
work, they decided to stop and drive to a cafe 7 miles away for tea. On the return journey
(they changed their mind mid way and turned back) they were involved in a crash and one of
the workmen was killed because of the others’ negligent driving. The employee was not
vicariously liable because the men were not acting in the course of their employment but
were on a frolic of their own.