Discuss the justification for vicarious liability and whether the recent developments in case law have overcome the limitations in vicarious liability in modern conditions.

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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. There are three key elements to be satisfied for VL to arise namely that a tort must be committed, the person who commits the tort is an employee and the tort must be committed during the course of employment.

Justifications

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 be unfair 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.

Elements of VL

Firstly, a tort must be committed, as there can be no vicarious liability if there is no direct liability. If the employer does not commit a tort, there can obviously be no VL.

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Secondly, the tort must be committed by an employee. The 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 ...

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