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"The English law on vicarious liability is the best compromise which could have been reached between the needs of tort victims for compensation and the freedom of businesses to operate without excessive burdens."

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Introduction

Ryan Dale 0304056 "The English law on vicarious liability is the best compromise which could have been reached between the needs of tort victims for compensation and the freedom of businesses to operate without excessive burdens." An employer is responsible for damage caused by the torts of his employees acting in the course of employment. This is known as 'vicarious liability'1. Essentially, vicarious liability is where the employer is generally substituted in terms of liability for the employee, the employee also has liability but the resources of the employer such as insurance makes them more financially attractive to the claimant. The mechanism of vicarious liability is arguably the best compromise between the needs of tort victims and the freedom of businesses as the employer usually has insurance to cover the tort of the employee, making it more financially viable to the employer than directly compensating the claimant. Also, the tort victim is usually sufficiently compensated through insurance rather than if they claimed against the employee as the master has the 'deepest pocket'2. However, recent developments in the law on vicarious liability not only makes the employer liable for acts that are 'directly' connected with what they are employed to do, but it is now established that an employer may be liable for the unauthorised acts of an employee, where those acts are 'closely connected' with the nature of the wrongdoer's employment. ...read more.

Middle

This is a rather weak argument based on fairness but is associated with a far more convincing point that vicarious liability also serves as a 'loss distribution mechanism'.QUOTE-FLEMING In economic terms this means that compensation claims should be regarded as a 'cost' of producing goods. The employer is able to insure against these 'costs' and then recover the cost of insurance through higher prices. In effect this means that the customer actually pays for the risks created as a by-product of production making the process effiecient in terms of the price of the product reflecting the social cost.footnote?. These points demonstrate that vicarious liability is a suitable mechanism to protect the needs of the tort victims without being too restrictive upon business practice. However, it is argued that while the principle adequately compensates the tort victims, it does indeed place too much of a burden upon employers. The case of Lister and Others v. Hesley Hall Limited demonstrates the view that employers can now be liable for the actions of their employees even when they are not directly performing the actions that they are employed to do. The issue centred around a school boarding house where the warden sexually abused the boys living there. There were no complaints at the time but in the early 1990's when the boys had left they brought a complaint that led to the warden being imprisoned for 7 years. ...read more.

Conclusion

The public sector is also hampered by the threat of civil action as health authorities are liable for the NHS staff and the Chief Officer of police is liable for their constables. The objective of these areas of the public sector is to provide a service, but the quality of this service could theoretically be hindered if the threat of civil action is present when people are simply performing their duties. However, the principle of vicarious liability is generally a beneficial mechanism that adequately compensates the tort victim without placing an undue burden on the business sector. There is undoubtedly a burden, but not an undue burden; employers in many cases have successfully incorporated this burden into a cost of production that consumers effectively pay for, and in any case the insurance premium that covers the claim is generally cheaper than if the employer was to directly compensate the tort victim. Therefore, the principle of vicarious liability is the best compromise which could have been reached between the needs of tort victims for compensation and the freedom of businesses to operate without excessive burdens. 1 P418. Textbook on Torts 8th edition. Michael A.Jones 2 P419. Textbook on Torts 8th edition. Michael A.Jones 3 The Law of Torts. 9th edition. Chapter 19. p413. John G.Fleming 4 P419. Textbook on Torts 8th edition. Michael A.Jones 5 Vicarious Liability for Employers. Andrew Scott-Howman. 14th June 2001. http://www.bellgully.com/publications/emp_2001_06_14_liabilty.html 1 ...read more.

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