Vicarious Liability

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Definition

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Vicarious liability arises where an employer is liable for the torts, and sometimes crimes, of their employees, as first defined by Sir John Salmond in 1907, and recently developed from Lister v Hesley Hall (2002) to Barclays Bank v Various Claimants (2020).

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The two rules

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The TWO RULES are that the tortfeasor must be an employee or in a position ‘akin to employment’, and there must be a ‘close or sufficient connection’ between the tortfeasor’s wrongdoing and their employment.

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First rule

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FOR THE FIRST RULE, where there is doubt as to whether the tortfeasor is an employee, the ‘akin to employment test’ will be used as first set out in JGE v Trustees of the Portsmouth Roman Catholic Diocesan Trust (2012).

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5 criteria

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In Various Claimants v Catholic Child Welfare Society, Lord Phillips stated 5 criteria which can make it fair, just and reasonable to find a relationship ‘akin to employment’

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1st criteria-Means to compensate

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if the employer is more likely than the employee to have the means to compensate the victim and can be expected to have insured against liability

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2nd criteria-Employer control

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the employee was to a greater or lesser degree under the control of the employer

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3rd criteria-Employee's activity

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the employee’s activity was part of the employer’s business activity

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4th criteria- Employer's behalf

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the activity was undertaken on the employer’s behalf

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5th criteria- Risk creation

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and the risk was created by the employer by employing the employee to carry out the activity.

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Employer liability limit

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Responsibility for the actions of an employee can be shared by more than one employer, as in Viasystems v Thermal Transfer.

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Independent contractors

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Employers are not vicariously liable for the torts of independent contractors, confirmed in Barclays Bank v Various Claimants (2020). An independent contractor is not an employee, and is liable for their own actions.

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The economic reality test

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The economic reality test considers whether a regular salary is provided, a contract exists and if tax is paid, as in Ready Mixed Concrete v Minister of Pensions.

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3, 4 and 5 specialisation

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The test was subsequently confirmed in Cox v Ministry of Justice, which focussed on tests 3, 4 and 5, in Armes v Notts CC, and in Barclays Bank v Various Claimants where Lady Hale clarified that each case should be judged separately on its own facts.

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Purely careless acts

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The employer may even be vicariously liable for purely careless acts, when the employee is doing their job, as in Century Insurance v Northern Ireland Transport.

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Authorised act

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The employer will be vicariously liable for an ‘authorised act’, as in Poland v Parr, and even for an ‘unauthorised act’, either if the employer benefits from the tort, as in Rose v Plenty, or if the employee is actually doing their job, as in Limpus v London General Omnibus.

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IR: Course of employment test

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ONLY IF RELEVANT: When the employee has committed a tort, case law relevant under the old Salmond ‘course of employment’ test may also be considered.

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Second rule

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FOR THE SECOND RULE, there must be a ‘close or sufficient connection’ between the employee’s wrongdoing and the nature of their employment.

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The integration test

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The integration test asks whether the employee is fully integrated into the employer’s organisation, as in Stevenson Jordan and Harrison v MacDonald and Evans,

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Lister v Hesley Hall(2002)

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The test was first established in Lister v Hesley Hall (2002), and subsequently confirmed in Various Claimants v Catholic Child Welfare Society, Armes v Notts CC, Mohamud v Morrisons Supermarkets, Barclays Bank v Various Claimants and Morrisons Supermarkets v Various Claimants.

This test can apply to the torts, or intentional torts (crimes), of an employee.

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Two considerations for employer liability

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The court will ask two things: What was the field of activities entrusted by the employer to the relevant employee ie. what was the nature of his job? and, was there a sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable under the principle of social justice?

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Scope of employment

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The employer may not be vicariously liable where the employee goes beyond the scope of their employment, for example with an unauthorised act that did not benefit the employer as in Twine v Beans Express, and in Beard v London General Omnibus, or where the employee is ‘on a frolic of their own’ by doing something outside the time or area of their work, as in Hilton v Thomas Burton.

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Salmond Approach

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Under the old Salmond Approach, the court would use any of the 3 tests available to establish whether the tortfeasor was an employee.

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The control test

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The control test asks whether the employer is in control of the employee, as in Mersey Docks and Harbour Board v Coggins and Griffiths.