Vicarious Liability is a type of strict liability where a person is held to be responsible for torts committed by someone else even though he himself is not at fault

“Although most torts are committed by individuals, almost all damages are paid by companies, usually employers or insurers: individuals are rarely worth suing”.

On social and policy grounds, it is not necessarily a bad thing that the onus of liability rests in practice on the employer.

In Hutchinson’s case  for example, Alderson B put forward the justification that the employer is in a better position with the “deepest pocket” to cover the costs. An employer is a much more attractive defendant since he is more likely to have the resources to meet an award of damages. If liability was passed on the negligent workman, it would crush him and his family financially, as the original injury was to the victim.

Moreover, the structure of the economic and business practices puts an employer in a better financial position than the employee to absorb and distribute these costs. Another argument is that since the employer is the one making the profit of his employee’s activities, it is only fair that he bears any losses that those activities cause.

 

A more convincing justification is the one that places the function of vicarious liability as a fair loss distribution mechanism in the economy. An employer can easily distribute such losses over product prices and wages than an employee. Additionally, there is a more general claim that tort liability not only contributes in compensating the victim but also contributes to accident prevention in general. Vicarious liability gives the employer a financial interest in encouraging his employees to take care for the safety of others; employing a more competent staff; provide more adequate materials and a safer place of work, and as a result business run smoothly.

     

But the law took into consideration the need of business to be free to operate without excessive burdens and imposed some requirements for the claimant to satisfy before claiming for vicarious liability. Firstly, the claimant must prove to the court that the person who caused him damage was the defendant’s employee and not an independent contractor. This distinction is crucial since an employer will be liable for torts of his employees but usually not for torts of independent contractors.  The courts came up with a number of tests to distinguish between the two.

The intention of the parties to the type of the relationship they want to create, the degree of control exercised by the employer and the degree of integration of the defendant within the business and the allocation of financial risk are all relevant factors to be examined by the courts in order to decide whether the defendant was an employee or an independent contractor. In Ferguson v Dawson Partners (Contractors ) Ltd, for example, even though the building worker was expressed to be a “labour only subcontractor”, was held by the court to be an employee because he was treated as an employee and the label was put for tax and national insurance purposes.

Secondly, the claimant must be able to show to the courts that the tort was committed by an employee acting in the course of employment. The problem of which acts fall in the course of employment is approached by the courts as a question of fact.

For example, in Rose v Plenty, Plenty (a milkman), engaged Rose aged 13, to help him with his rounds and injured him by driving the milk float negligently , even though in Plenty’s depot there was a notice saying “Children and young persons must not in any circumstances be employed by you in the performance of your duties”. The employers were held vicariously liable because Plenty was doing what he was employed to do, delivering milk, even though he did it in an unauthorised mode he was still in the course of employment.

Moreover an employee on the time of the tort must be engaged on his master’s business and not be acting on a “frolic of his own”

In Storey v Ashton, where a driver who was employed to deliver some wine and on the return journey after business hours he set of in a different direction from the defendant’s premises and hurt the claimant from his negligent driving, the court held that he was not acting on the course of employment but on a “frolic of his own” (taking another direction than the one he was instructed to take), so the employer was not liable.

All these requirements mentioned above which are needed to be fulfilled for vicarious liability to be imposed, limit down the number of claims against an employer since not everyone can claim for any tort in vicarious liability. These mechanisms can be seen as a shield to prevent excessive claims which could push a company into financial difficulties. Moreover, there is also legislation passed on this field to protect business from excessive burdens. An employer who is held vicariously liable for his employees’ torts may seek an indemnity from the employee under the Civil Liability (contribution) Act 1978 and recover his losses. In Merrett v Babb, an action was brought against an individual surveyor after the firm for which he had worked had ceased to trade.  Also there are the cases like  Shapland v Palmer where an employee and an employer were sued as co-defendants. These examples illustrate that if a business has gone to a point of having excessive burdens from vicarious liability claim, they have the right to sue the original wrongdoer who always remains in law as legally responsible for his torts.

In addition, after the Employers’ Liability (Compulsory Insurance) Act 1969 all businesses have to be insured against liability for their employees.  The companies therefore pay an annual amount of money that will cover them for the torts of their employees, so the insurance will pay.

It can be seen concluded that vicarious liability is an essential part of the law of tort. It might seem to be “rough” on business at a first glance, but after considering all the social convenience arguments, it is clear that it promotes justice in general. Vicarious liability therefore can be considered as the best compromise that could have been reached in the needs of tort for compensation and the freedom of business to operate without excessive burdens.

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