LEGAL THEORY METHOD

A RESEARCH PROJECT ON VICARIOUS LIABILITY

Submitted to : Professor Vivekananda, Department of Legal Theory Method, TNNLS

Submitted by : Reuben Philip Abraham

Roll No.:48

Class : 1st Year

Semester: 1

The Tamil Nadu National Law School

RESEARCH METHODOLOGY

AIM AND OBJECTIVES :

This research paper is an attempt to understand the concepts of Vicarious Liability and the ideas related to it.

RESEARCH ISSUES :

What is the definition of Vicarious Liability? What is the purpose of this doctrine?

SCOPE AND LIMITATION

This research paper is limited in the sense that it mainly tries to understand the all around idea about vicarious liability and its relevance.

SOURCE :

The researcher has primarily referred to secondary sources such as books and articles while

writing this research paper.

MODE OF CITATION :

A uniform mode of citation has been used throughout this research paper which is based loosely

on the style prescribed in The Bluebook: A Uniform System of Citation.

INTRODUCTION

The TORT doctrine that imposes responsibility upon one person for the failure of another, with

whom the person has a special relationship (such as Parent and Child, employer and employee,

or owner of vehicle and driver), to exercise such care as a reasonably prudent person would use

under similar circumstances.

Vicarious liability is a legal doctrine that assigns liability for an injury to a person who did not

cause the injury but who has a particular legal relationship to the person who did act negligently.

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 and driver, and employer and employee. Ordinarily the independent negligence of one

person is not imputable to another person.

Other theories of liability that are premised on imputed negligence include the Respondeat

Superior doctrine and the family car doctrine.

The doctrine of respondeat superior (Latin for "let the master answer") is based on the employer-

employee relationship. The doctrine makes the employer responsible for a lack of care on the

part of an employee in relation to those to whom the employer owes a duty of care. For

respondeat superior to apply, the employee's negligence must occur within the scope of her

employment.

The employer is charged with legal responsibility for the negligence of the employee because the

employee is held to be an agent of the employer. If a negligent act is committed by an employee

acting within the general scope of her or his employment, the employer will be held liable for

damages. For example, if the driver of a gasoline delivery truck runs a red light on the way to a

gas station and strikes another car, causing injury, the gasoline delivery company will be

responsible for the damages if the driver is found to be negligent. Because the company will

automatically be found liable if the driver is negligent, respondeat superior is a form of Strict

Liability.

1Another common example of imputed negligence is attributing liability to the owner of a car,

where the driver of the car committed a negligent act. This type of relationship has been labeled

the family car doctrine. The doctrine is based on the assumption that the head of the household

provides a car for the family's use and, therefore, the operator of the car acts as an agent of the

owner. When, for example, a child drives a car, registered to a parent, for a family purpose, the

parent is responsible for the negligent acts of the child at the wheel.

Liability can also be imputed to an owner of a car who lends it to a friend. Again, the driver of

the car is acting as the agent of the owner. If the owner is injured by the driver's negligence and

sues the driver, the owner can lose the lawsuit because the negligence of the driver can be

imputed to the owner, thereby rendering him contributory negligent. This concept is known as

imputed contributory negligence.

EMPLOYER’S LIABILITY

2Employers are vicariously liable, under the respondeat superior doctrine, for negligent acts or

omissions by their employees in the course of employment (sometimes referred to as 'scope of

employment'). 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 performing it.

Courts sometimes distinguish between an employee's "detour" vs. "frolic". For instance, an

employer will be held liable if it is shown that the employee had gone on a mere detour in

carrying out their duties, whereas an employee acting in his or her own right rather than on the

employer's business is undertaking a "frolic" and will not subject the employer to liability.

Generally, an employer will not be held liable for assault or battery committed by employees,

unless the use of force was part of their employment (such as a police officers), or they were in a

field likely to create friction with persons they encountered (such as car re-possessors). However,

the employer of an independent contractor is not held vicariously liable for the tortious acts of

the contractor, unless the contractor injures someone to whom the employer owes a non-

delegable duty of care, as when the employer is a school authority and the injured party a pupil.

1 http://legal-dictionary.thefreedictionary.com/Vicarious+Liability2 http://en.wikipedia.org/wiki/Vicarious_liability

Employers are also liable under the common law principle represented in the Latin phrase, "qui

facit per alium facit per se" (one who acts through another acts in one's own interests). That is a

parallel concept to vicarious liability and strict liability, in which one person is held liable

in criminal law or tort for the acts or omissions of another.

PRINCIPAL’S LIABILITY

The owner of an automobile can be held vicariously liable for negligence committed by a person

to whom the car has been loaned, as if the owner was a principal and the driver his or her

agent, if the driver is using the car primarily for the purpose of performing a task for the owner.

Courts have been reluctant to extend this liability to the owners of other kinds of chattel. For

example, the owner of a plane will not be vicariously liable for the actions of a pilot to whom he

or she has lent it to perform the owner's purpose. In the United States, vicarious liability for

automobiles has since been outlawed with respect to car leasing and rental in all 50 states.

One example is in the case of a bank, finance company or other lienholder performing

a repossession of an automobile from theregistered owner for non-payment, the lienholder has a

non-delegatable duty not to cause a breach of the peace in performing the repossession, or it will

be liable for damages even if the repossession is performed by an agent. This requirement means

that whether a repossession is performed by the lienholder or by an agent, the repossessor must

not cause a breach of the peace or the lienholder will be held responsible.

This requirement not to breach the peace is held upon the lienholder even if the breach is caused

by, say, the debtor objecting to the repossession or resists the repossession. In the court case

of MBank El Paso v. Sanchez, 836 S.W.2d 151, where a hired repossessor towed away a car

even after the registered owner locked herself in it, the court decided that this was an unlawful

breach of the peace and declared the repossession invalid. The debtor was also awarded

$1,200,000 in damages from the bank.

LIABILITY OF CORPORATION IN TORT

3In English law, a corporation can only act through its employees and agents so it is necessary to

decide in which circumstances the law of agency or vicarious liability will apply to hold the

corporation liable in tort for the frauds of its directors or senior officers.

If liability for the particular tort requires a state of mind, then to be liable, the director or senior

officer must have that state of mind and it must be attributed to the company. InMeridian Global

Funds Management Asia Limited v. Securities Commission [1995] 2 AC 500, two employees of

the company, acting within the scope of their authority but unknown to the directors, used

company funds to acquire some shares. The question was whether the company knew, or ought

to have known that it had acquired those shares.

The Privy Council held that it did. Whether by virtue of their actual or ostensible authority as

agents acting within their authority (see Lloyd v Grace, Smith & Co. [1912] AC 716) or as

employees acting in the course of their employment (see Armagas Limited v Mundogas

S.A. [1986] 1 AC 717), their acts and omissions and their knowledge could be attributed to the

company, and this could give rise to liability as joint tortfeasors where the directors have

assumed responsibility on their own behalf and not just on behalf of the company.

So if a director or officer is expressly authorised to make representations of a particular class on

behalf of the company, and fraudulently makes a representation of that class to a Third Party

causing loss, the company will be liable even though the particular representation was an

improper way of doing what he was authorised to do. The extent of authority is a question of fact

and is significantly more than the fact of an employment which gave the employee the

opportunity to carry out the fraud.

In Panorama Developments (Guildford) Limited v Fidelis Furnishing Fabrics Limited [1971] 2

QB 711, a company secretary fraudulently hired cars for his own use without the knowledge of

the managing director. A company secretary routinely enters into contracts in the company's

name and has administrative responsibilities that would give apparent authority to hire cars.

Hence, the company was liable.

3 Id

RESPONDEAT SUPERIOR

[Latin, Let the master answer.] A common-law doctrine that makes an employer liable for the

actions of an employee when the actions take place within the scope of employment.

4The common-law doctrine of respondeat superior was established in seventeenth-century

England to define the legal liability of an employer for the actions of an employee. The doctrine

was adopted in the United States and has been a fixture of agency law. It provides a better

chance for an injured party to actually recover damages, because under respondeat superior the

employer is liable for the injuries caused by an employee who is working within the scope of his

employment relationship.The legal relationship between an employer and an employee is called

agency. The employer is called the principal when engaging someone to act for him. The person

who does the work for the employer is called the agent. The theory behind respondeat superior is

that the principal controls the agent's behavior and must then assume some responsibility for the

agent's actions.

An employee is an agent for her employer to the extent that the employee is authorized to act for

the employer and is partially entrusted with the employer's business. The employer controls, or

has a right to control, the time, place, and method of doing work. When the facts show that an

employer-employee (principal-agent) relationship exists, the employer can be held responsible

for the injuries caused by the employee in the course of employment.

In general, employee conduct that bears some relationship to the work will usually be considered

within the scope of employment. The question whether an employee was acting within the scope

of employment at the time of the event depends on the particular facts of the case. A court may

consider the employee's job description or assigned duties, the time, place, and purpose of the

employee's act, the extent to which the employee's actions conformed to what she was hired to

do, and whether such an occurrence could reasonably have been expected.

4 http://legal-dictionary.thefreedictionary.com/Respondeat+Superior

WHEN IS AN EMPLOYEE ON JOB?

5The crucial question in a respondeat superior claim is whether the employee was acting within

the scope of employment: Was the employee involved in some activity related to the job? In

1991 the Supreme Court of Virginia decided a case, Sayles v. Piccadilly Cafeterias, Inc.,242 Va.

328, 410 S.E.2d 632, that illustrates how difficult answering this question can sometimes be.

The case began with a Christmas Eve accident in 1987. Charles Sayles was a passenger in an

automobile hit by another car, driven by Stephen Belcastro. Both men were leaving the

Christmas party held on the premises of their company, Piccadilly Cafeterias, Inc, of Richmond,

Virginia. Belcastro had become intoxicated at the party and, later, explained that he was "fooling

around" when he drove his car into the left-hand lane of the road, lost control, and struck the

other car, injuring Sayles.

Because Belcastro was intoxicated as a result of having drinks provided by their employer at a

company-sponsored event, Sayles sued Piccadilly under the doctrine of respondeat superior. The

jury returned a verdict in Sayles's favor and awarded him damages of $11.5 million. The trial

court set aside the judgment, however, ruling that Belcastro had been acting outside the scope of

his employment when the accident occurred.

On appeal, Sayles cited a Virginia appellate case, Kim v. Sportswear, 10 Va. App. 460, 393

S.E.2d (1990), from the previous year. Kimwas a Workers' Compensation case whose facts were

similar: it involved an employee fatally injured while attending a Korean New Year's party

sponsored and hosted by the employer. The appellate court had allowed recovery of damages

against the employer.

The Supreme Court of Virginia declined to follow Kim, however. The court noted first that Kim

was a workers' compensation case, governed by a statute that is to be "liberally construed in

favor of the claimant." The court also made several factual distinctions: employees were

expected to attend the party in the Kim case, whereas the party in Sayles did not carry such

expectations. Further, the injury in Kimtook place on the employer's premises, in contrast to

Sayles, where the collision did not occur until five minutes after the drivers had left the party.

5 Id

Based on these facts, the Saylescourt held that Belcastro was not engaged in the business of

serving his employer at the time of the accident and therefore the employer could not be held

liable.

An employee is not necessarily acting outside the scope of employment merely because she does

something that she should not do. An employer cannot disclaim liability simply by showing that

the employee had been directed not to do what she did. A forbidden act is within the scope of

employment for purposes of respondeat superior if it is necessary to accomplish an assigned task

or if it might reasonably be expected that an employee would perform it.

Relatively minor deviations from the acts necessary to do assigned work usually will not be

outside the scope of employment. Personal acts such as visiting the bathroom, smoking, or

getting a cup of coffee are ordinarily within the scope of employment, even though they do not

directly entail work. When an employee substantially departs from the work routine by engaging

in a frolic—an activity solely for the employee's benefit—the employee is not acting within the

scope of her employment.

An employer is liable for harm done by the employee within the scope of employment, whether

the act was accidental or reckless. The employer is even responsible for intentional wrongs if

they are committed, at least in part, on the employer's behalf. For example, a bill collector who

commits Assault and Battery to extract an overdue payment subjects the employer to legal

liability.

Where the employer is someone who legally owes a duty of special care and protection, such as a

common carrier (airplane, bus, passenger train), motel owner, or a hospital, the employer is

usually liable to the customer or patient even if the employee acts for purely personal reasons.

The theory underlying such liability is that employers should not hire dangerous people and

expose the public to a risk while the employee is under the employer's supervision.

The employer may also be liable for her own actions, such as in hiring a diagnosed psychopath to

be an armed guard. An employer, therefore, can be liable for her own carelessness and as a

principal whose employee is an agent.

These rules do not allow the employee to evade responsibility for harm she has caused. Injured

parties generally sue both the employee and employer, but because the employee usually is

unable to afford to pay the amount of damages awarded in a lawsuit, the employer is the party

who is more likely to pay.

WHAT IS THE PURPOSE SERVED BY THIS DOCTRINE?

6Vicarious liability is a system whereby A is liable to C for damage caused to C by B. The most

commonplace scenario which arises in case law is the one in which A is B’s employer, and B is

in legal terms A’s ‘servant’. In such situations there is deemed to be a ‘special relationship’

between A and B, which renders A liable for B’s tortious acts. The criteria for establishing

liability is as follows: A must stand in a particular relationship to B, B must commit a tort, and

the tort must be referable in a certain manner to that relationship. A himself need not have

participated in the tort, nor breached any duty of care to C.

The legal theory behind the doctrine is complex. It is too simplistic to say that an employer is

liable just because his servant is liable – examples can be found of cases where A is held liable

despite the fact that had C sued B his claim would have failed. Note Broom v Morgan, where B

and C were husband and wife who were employed by the same firm (A); B negligently injured C

at a time when the law did not allow wives to sue their spouses, but A was held liable for the

injury nonetheless. See also the Canadian case of Buckley v Smith Transport where the question

was raised as to whether an employer could be held liable for acts committed by an insane

employee, providing no conclusive or authoritative answer.

Furthermore, as Winfield and Jolowicz point out in Tort 17th ed., the traditional justifications

have been heavily criticised – ‘respondeat superior’ (‘let the master answer’) as being merely a

bald statement of the principle, and ‘qui facit per alium facit per se’ (‘he or she who acts through

another, acts personally’) as a superficial and fictional explanation of it. In short, the theoretical

reason why vicarious liability is imposed is unclear – is it because the employee is liable, or

because the acts and state of mind of the employee are attributed to the employer, or because the

acts are attributed to the employer who would be liable if he had carried them out himself?

6 http://www.oxbridgeessays.com/archive/services/law/gdl-cpe/law-essays/examples/ex03.pdf

Consequently, it may be argued that a far more effective way to analyse the concept would be to

identify and evaluate the purposes served by its implementation, and then turn to the case law to

see how far they are adequately reflected in the current law.

There are three main distinct purposes served by the doctrine of vicarious liability. The first is

underpinned by the ‘deep seated and intuitive idea’ that someone who sets a force in motion

generally for his own benefit, should take responsibility for its consequences. If there were no

vicarious liability, then there would be no incentive for employers to minimise the risks created

in the course of business. 7The second purpose is based on practicality. It is a compelling argument that the employer will

have the ‘deeper pocket’, and is therefore the most practical person to sue from the point of view

of the claimant, the employee, and the law itself. The claimant is more likely to receive any

damages awarded, the employee does not have to insure himself against liability (which would

inevitably have a detrimental effect on the economic and employment structures within society),

and the law of torts is prevented from becoming stultified and impracticable. It also solves the

problem of assigning responsibility and identifying the correct defendant (i.e. in cases that

involve multiple contracts along a line of subcontractors), and maximises the efficiency of

employees, who can work safe in the knowledge that their liability is covered and they do not

have to be constantly looking over their shoulders.

Its final purpose is economic: the facilitation of the ‘loss distribution theory’. The employers

most likely to be caught by the doctrine are those who employ large workforces, and who are in

turn probably supplying products or services to a vast consumer body. The cost of the

employer’s potential liability is reflected in the prices which it charges, effectively insuring the

employer against claims by incrementally increasing the cost of said products or services to its

customers. This means that there is always an adequate source from which the claimant can seek

compensation, the employer does not end up disabling itself through having to make huge

payouts on behalf of an indeterminate number of negligent employees, and the employees are not

hit with legal penalties which they are financially unable to meet.

So how adequately does the current law allow the doctrine to fulfil these purposes? In Mersey

Docks and Harbour Board v Coggins and Griffith ltd, A hired a crane and a driver, B, and let

them to X through a contract of hire. Under the contract, B was X’s employee, and X could tell

7 Id

him what work was to be undertaken, but he was paid and liable to be dismissed by A. When B

negligently injured C, the court held that A was vicariously liable. Lord Porter’s reasoning was

an acknowledgment of the practical and economic purposes of the doctrine; he emphasised the

importance of certainty – B may perform tasks for a number of different people each day, and be

under a contract of hire with each of them, but it would be impractical for a claimant to have to

go after all of these potential defendants, and for the courts to decide which should be held

liable/how liability should be apportioned. A test of control – in this case, not the party who sets

B his tasks, but the one who can instruct B how to operate the crane – is used to identify a

general employer who shoulders liability in an action in tort against B. He also highlighted the

importance of giving C someone worth suing – why should the claimant suffer if A chooses to

make a precarious and unknown contract with X? Or for that matter, with W or with Y or with Z,

or any number of parties?

The 2005 decision in Viasystems (Tyneside) ltd v Thermal Transfer (Northern) ltd reinforced the

role of vicarious liability in bringing certainty to the law. It was held that where more than one

party had control over B’s work, and where this work was equally a part of the business of both

parties, it was fair and just to make them both liable. This avoids situations where the claimant

may make the wrong decision as to who to sue. The importance of vicarious liability as an

instrument for procuring certainty was also highlighted in Cassidy v Ministry of Health, where it

was held that as long as it was found that at least one of the employer’s servants had been

negligent, it did not matter if the individual tortfeasor could not be identified – the employer was

still vicariously liable.

The ‘scope of employment’ test has also been broadened through common law in order to allow

the doctrine to operate in a wider range of scenarios, hence rendering it more effective in

fulfilling its intended purposes than previously. In Morris v C.W. Martin and Sons ltd, it was

held that it no longer mattered if B was acting for his own benefit, as long as the tort was

committed within the scope of employment in the technical sense of the word – that is, did the

position which his employment put him in facilitate B’s act? Atiyah described this decision as “a

striking and valuable extension of the law on vicarious liability”, and it has been followed in the

more recent cases of Lister v Hesley Hall ltd and Mattis v Pollock. In my opinion, the law’s

stance in this area effectively imposes strict liability upon an employer not just for the negligence

or carelessness of his servants, but also their wilful wrongs – a threat which is likely to result in

employers taking extra care when considering job applications (i.e. checking criminal records,

following up references etc.) 8Finally, the doctrine has been further extended by the 2006 decision in Majrowski v Guy’s and

St. Thomas’ NHS Trust, where it was held that it was not confined to common law but was also

applicable to equitable wrongs and statutory breach. This further reinforces the doctrine’s

adequacy in fulfilling its purposes – earlier decisions increased its scope so that it was equipped

to apply to a wider range of possible circumstances, and this decision now renders it operative in

more types of cases.

In conclusion, the trend in case law seems to be to extend the ambit and hence the adequacy of

the doctrine of vicarious liability. I believe that it is indisputable that the purposes which it is

designed to serve are highly valuable – a fact which is recognised even in foreign jurisdictions

which do not possess the doctrine in its purest form, but have gone to considerable lengths to

create a form of liability without fault in practice (i.e. German law does this through an extension

of contractual liability; the employer is liable unless he can show that he exercised due care in

choosing and supervising the servant.)

However, there is still some room for improvement. Fleming described the principle as “a

compromise between two conflicting policies; the social interest in furnishing an innocent tort

victim with recourse against a financially responsible defendant, and a hesitation to foist any

undue burden on business enterprise.” It could be argued that current law is far more adequate in

pursuing the first policy than it is the second. Furthermore, developments in the way businesses

are being run is creating a need for further concurrent development in the law to make sure the

proportion of the workforce for which employers are vicariously liable does not decrease.

8 Id

CONCLUSION

Ordinarily only that person is liable for a wrong which he has committed by another. However

there are certain cases where one person is made liable for the wrongs committed by another.

Such cases are examples of vicarious liability. As regards the liability of a master for the acts of

his servants , it is based on the legal presumption that all acts are done by his servants in and

about his master’s business are done by the express or implied authority of the master.9Some of the justification which can be given for such an idea of justice being that the master has

deeper pockets. Then also it encourages accident prevention by giving an employer a financial

interest in encouraging his employees to take care of the safety of others , also as the employer

makes profit out of his employees , he also got to bear any losses they cause.

BIBLIOGRAPHY

List of websites referred to :

http://legal-dictionary.thefreedictionary.com

http://en.wikipedia.org

http://www.oxbridgeessays.com/archive/services/law/gdl-cpe/law-essays/

examples/ex03.pdf

http://www.lawteacher.net/PDF/Vicarious%20Liability.pdf

9 http://www.lawteacher.net/PDF/Vicarious%20Liability.pdf