Vicarious Liability

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Vicarious Liability

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Lord Phillips said that "the law of vicarious liability is on the move" in Various Claimants v Catholic Child Welfare Society (2012, UKSC).

Various Claimants is about the recent sexual abuse scandals, often the claims for the abuse suffered are brought vicariously against the body as the individual either has no money or is dead.

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Three key questions for vicarious liability:

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1. What kind of relationship between the person sought to be made liable and the person who's committed the offence needs to be shown?

2. Can there be more than one person vicariously liable?

3. What's the connection between the wrongful conduct and the relationship in question?

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Orthodox view of VL:

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The common law doctrine imposes liability on one person in relation to the tort committed by another and it is a form of strict liability on the basis that the person being held liable is not the person who is blameworthy - most common relationship is employer/employee.

Liability is imposed on the employer for torts committed "in the course of employment".

Employer has a right to indemnity from the employee as a matter of legal theory but it is rarely exercised.

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The basis for VL:

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Two suggested bases:

(1) the act of the employee is treated as the indirect act of the employer who has committed an act through the employee (the master's tort theory)

(2) liability is imposed on the employer not for actually committing a tort but because they are responsible in law for the employee's torts (servant's tort theory).

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The basis for VL (2):

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The servant's tort theory is the correct one - states in Majrowski v Guy and St Thomas' NHA Trust (2007, HL). Lord Nicholls said this approach has had wide academic support and is settled law in the UK and likely is in Australia too.

Stevens says that what is attributable to the employer is the employee's action as opposed to the employee's tort. He argues that the justifications commonly offered for VL need to be changed. He is a supporter of the master's tort theory.

If the master's tort theory was correct then seemingly the principle of vicarious liability doesn't exist as the liability is personal. Rules of attribution of personal liability operate separately to VL.

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The basis for VL (3):

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Better (and orthodox) view is that recognised by the SC in Majrowski.

Stevens argues that employers can be held liable for exemplary damages if the liability is personal but not for VL.

Kuddus v Chief Constable of Leicester (HL, 2001) - Lord Scott was highly critical of imposing a vicarious liability for exemplary damages.

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Policy

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ICI v Shatwell [1965] - "the doctrine of vicarious liability has not grown from any clear, logical or legal principle but from social convenience and rough justice".

Why should we impose vicarious liability? Bazley v Curry has had a lot of impact - McLoughlin LJ identified the provision of a just and practical remedy and also deterrence of future harm as the two fundamental concerns of VL.

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Policy (2)

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Just and practical remedy: argues that the person who employs someone to advance their own interest should have a corresponding liability for losses incurred. It has to be fair to impose the liability and arguably it isas the enterprise creates a risk and therefore the person who creates the riskshould bear the liability. The employer is often in the best position to spreadthe loss through mechanisms like insurance or higher prices.

Deterrence: it operates on the employer encouraging the reduction of accidents and intentional wrongs by provision of safety and supervision. There was a vast area where efficient administration could reduce the risk and holding employers liable ensured that they do this.

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Policy (3)

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Servants mightcommit acts which were so unconnected with the employment that it would beunreasonable to impose liability on the employer. To impose vicarious liabilityfor these kinds of acts would be unfair.

Majrowski per Lord Nicholls: "an employer's liability is not confined to responsibility for acts done by an employee inthe course of employment. Rather, the employer is liable for the wrongs of theemployee committed in the course of employment. The employee’s wrong is imputedto the employer”.

The whole idea of fairness is that the person benefitting from the enterprise should bear the risk – the court is making a normative judgement based on the concept of social responsibility.

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Policy (4)

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Are employers in a better position to pay damages? Is thatwhy we impose VL? There is the idea that it spreads losses although we do notusually worry about whether the defendant has the ability to pay so courts donot usually refer to insurance issues.

Tame v Annets –the law is concerned not only with the compensation of injured plaintiffs, alsowith the imposition of liability on defendants and the impact of that on thefreedom and security with which people conduct their affairs.

Deterrence argument? It encourages employers to take asafety conscious approach and prevent their enterprise from causing harm. Howfar tort liability does deter is a complex question – it seems likely thatdeterrence will more likely operate in institutional settings and some sort ofmarket which may affect how employers behave.

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Vicarious and personal liability

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You can assume responsibility for another’s behaviour andthen be liable if you do not exercise that with reasonable care. This would bepersonal liability e.g. Dorset Yachtcase.

- Mitchell vGlasgow CC (2009, HL) - no duty owed by local authority landlord to victimof attack by another tenant

- Couch vA-G (2008, NZSC) - probation service arguably owed duty to victim of attackby parolee

- Everitt vComojo Ltd (2011, EWCA) - nightclub owner owed duty to patron stabbed byanother patron.

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Vicarious liability - of whom?

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Relationships giving rise to VL:

- Employer and employee

- Relationships which are analogous to employment

- Principal and agent

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Vicarious liability - of whom? (2)

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Employer/employee relationship: there's a lot of discussion about whether someone is an employee or an independent contractor.

Lee Ting Sang v Chung Chi-Keung - the fundamental test is whether the person concerned hasengaged himself to perform services and to do so on his own account. If “yes”then they are an independent contractor as it is a contract for services; if“no” it is a contract of service and they are an employee.

VL has been extended a lot as it has been said that it canapply to relationships which are analogous to employment and where the conductis closely connected with that relationship.

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Relationships analogous to employment

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Key developments recently in Canada:

John Doe v Bennett (2004, SCC) - Roman Catholic priest had sexually assaulted boys in his Parish, was the Diocese vicariously liable for these actions? Chief Justice McLoughlin said that vicarious liability imputes liability because the person responsible for the activity or enterprise and so they should be held responsible. But what's the relationship?

"The relationship betweenthe bishop and a priest in a diocese was not only spiritual, but temporal. The priest took a vow of obedience to thebishop. The bishop exercised extensivecontrol over the priest, including the power of assignment, the power to removethe priest from his post and the power to discipline him. It was akin to an employment relationship.”

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Relationships analogous to employment (2)

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KLB v British Columbia (2003) - vicarious liability does not extend to the government on behalf of abuse by foster parents.

Maga v Archbishop of Birmingham [2010] - it was admitted that an abusive priest had been an employee of the Diocese and in all the circumstances VL was imposed.

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Relationships analogous to employment (3)

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E v English Province of Our Lady of Charity [2012] - claimant (when she was 6) was placed in a Roman Catholic children's home and alleged she was abused by Father B, the parish priest for the parish in which the home was situated. Trustees of the local Diocesan trust were claimed against – could the relationship attract VL? CA accepted that he wasn’t an employee but the relationship was sufficiently akin to employment for a relationship to be attached so there could be VL.

B was accountable to the bishop, subject to the bishop's sanction and was fully integrated into the organisation of the church and he pursued their aims on its behalf.

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Relationships analogous to employment (4)

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Various Claimants confirmed the thinking in E. The question there was whether the De La Salle Institute was responsible for sexual and physical abuse of children committed by its brothers who were sent to teach at, but not employed by, a residential institute for boys. The Middlesbrough defendants, managers of the school and employers of the Brother teachers were VL, but the De La Salle defendants were not liable as they didn’t employ the brothers. But SC on appeal said there could be VL on behalf of the De La Salle.

Paragraph 45 –where the defendant is not bound by a contractual employment contract but the relationship has the same incidence then the relationship can give rise to VL – this is the approach taken in E.

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Relationships analogous to employment (5)

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Per Lord Phillips: “The relationship between the teaching brothers and the Institute had all the essential elements of the relationship between employer and employee: the Institute was subdivided into a hierarchical structure and conducted its activities as if it were a corporate body; the teaching activity of the brothers was undertaken because the provincial head directed the brothers to undertake it, and was undertaken in furtherance of the mission of the Institute; and the manner in which the brother teachers were obliged to conduct themselves as teachers was dictated by the Institute's rules.”

Claim succeeded, De La Salle Institute was liable to pay compensation – it is liable for its brothers.

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Relationships analogous to employment (6)

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Cox v Ministry of Justice (CA, 2014) - claimant was a prison catering manager and was injured (accidentally) when a prisoner disobeyed her orders. CA held that the Ministry were vicariously liable. LJ Comm pointed to the individual's ability to compensate, creation of the risk of a tort through the activity and the element of control over the tortfeasor. The prisoners doing this work relieved them of taking on employees. The Various Claimants approach was applied.

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Can there be dual vicarious liability?

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Viasystems v Thermal Transfer Ltd (2005, EWCA) - LJ May said that you should look at the relevant negligent act and see who's responsibility it was to prevent it from happening. Absolute control is not necessary so dual control and thus dual vicarious liability is possible.

LJ Rix said that the courts had been moving from using the test of control as determining the relationship (of employer and employee) to using it as a test of vicarious liability. What you are looking for is a situation where the employee in question is so much part of the work, business and organisation of both employers that it is just to make both employers answer for his negligence. First case in the UK which recognised the possibility of dual vicarious liability.

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Can there be dual vicarious liability? (2)

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Viasystems wasspecifically approved in VariousClaimants - Lord Phillips preferred the wider approach of LJ Rix. He saidwhere two defendants were potentially vicariously liable for the act of atortfeasor it was necessary to give independent consideration to therelationship of the tortfeasor with each defendant in order to decide whetherthat defendant was vicariously liable.

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What is the connection between the relationship and the wrongdoing?

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Courts have developed the "close connection" test, applied in Bazley v Curry [1999], per McLachlin CJ: "the fundamental question is whether the wrongful act is sufficiently related to conduct authorised by the employer to justify the imposition of vicarious liability. Vicarious liability is generally appropriate where there is a significant connection between the creation or enhancement of a risk and the wrong that accrues therefrom even if unrelated to the employer's desires".

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What is the connection between the relationship and the wrongdoing? (2)

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Relevant factors may include, but are not limited to:

- the opportunity that the enterprise afforded the employee to abuse his or her power

- the extent to which the wrongful act may have furthered the employer's aims

- the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer's enterprise

- the extent of power conferred on the employee in relation to the victim

- the vulnerability of potential victims to wrongful exercise of the employee's power

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What is the connection between the relationship and the wrongdoing? (3)

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Bazley involved residential care for troubled children and an employee committed paedophilic assaults on the children and McLaughlin CJ said there was a strong connection between the employee’s role and the opportunity to commit the acts. The employee’s duties involved general supervision but also intimate activities such as bathing and putting them to bed so she was satisfied that the employer had indeed created or enhanced the chance of the employee’s sexual abuse.

John Doe v Bennett– abuser was a priest and his relationship with the Diocese was akin to employment and the court applied the close connection test. The priest’s wrongful acts were closely connected to the psychological intimacy related to the job of the priest as it created the opportunity for the abuse and also the submission of the victim to the perceived power of the priest – there was an unprecedented level of power on the priest as the area was geographically isolated and he was in a great position of authority.

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What is the connection between the relationship and the wrongdoing? (4)

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The mere opportunity is not enough: Jacobi v Griffiths – close connection test was not satisfied whenan employee of a children’s club abused a child outside of working hours awayfrom the premises because the employee was not placed in any special positionof care and protection in relation to the child.

B v Order of theOblates of Mary Immaculate (2005) – close connection test was not satisfiedwhen a school pupil was sexually abused by an employee because there was noconnection between what the employee was required to do and the abuse.

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What is the connection between the relationship and the wrongdoing? (5)

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All Canadian cases below.

Lister v Hesley Hall [2001] - the court cited Bazley v Curry but saw the connection test as a way of avoiding talking about unauthorised modes of doing authorised work. It was suggested that vicarious liability should be decided on the relative closeness of the misconduct to the nature of the employment and on the facts of the case the abuse was "inextricably interwoven" with the carrying out by the warden of his duties at the school so there was a sufficient connection and vicarious liability was established. Lord Millett also said look at the closeness of connection between the duties and the opportunity for abuse and said there was an inherent risk that abuse may be committed on vulnerable people (i.e. old people, young people) by those placed in authority.

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What is the connection between the relationship and the wrongdoing? (6)

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Lister has been applied in a number of cases since then, such as A v Trustees of the Watchtower Bible and Trust Society [2015] - trustees held vicariously liable for abuse committed by a minister in the course of their ministerial duties.

Another key case about the close connection test is Dubai Aluminium v Salaam [2003] in which Lord Millett said that vicarious liability mayarise even if the act of the employee is “an independent act in itself” and (atpara 128) he underlined that “the mere fact that he was acting dishonestly orfor his own benefit is seldom likely to be sufficient” to show that an employeewas not acting in the course of his employment.

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What is the connection between the relationship and the wrongdoing? (7)

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Various Claimants took the next step, saying that VL can be imposed "where a defendant, whose relationship with the abuser put it in a position to use the abuser to carry on its business or to further its own interests, has done so in a manner which has created or significantly enhanced the risk that the victim or victims would suffer the relevant abuse". There needs to be a strong causative link.

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What is the connection between the relationship and the wrongdoing? (8)

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Applying what was said in Various Claimants about the close connection test to the facts:

- De La Salle could place them at the school (in fact one of them was headmaster) and there was a close connection.

- The boys were vulnerable, Lord Phillips said they were “virtually prisoners” and were in quite a hopeless position, there wasn’t a lot they could do about the abuse.

- The brother teachers were placed at the school to care for educational and religious needs and abusing the boys was the complete opposite of those objectives and that very fact provided the necessary close connection applying the risk approach.

- It was fair, just and reasonable of the institute to share liability.

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What is the connection between the relationship and the wrongdoing? (Other jurisdictions)

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In NZ the close connection test was satisfied in S v Attorney-General [2003] which was a case concerning foster parents.

In Australia, there’s a decision of the High Court in State of NSW v Lepore [2003] where the High Court was split on this so there’s no definitive answer. They looked at the English and Canadian cases and two members of the court favoured that approach but two others merely spoke about course of employment and one rejected vicarious liability in the case of intentional misconduct.

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Vicarious liability - drawing the line

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It has expanded in significant ways as we’ve seen, both by widening the relationship factor and adopting the close connection test – where might this lead?

It seems that the key factor lies in the position of authority which provides the potential for abuse. It is obvious that the relationship may be created by relationships other than employment:

- Police and suspect – that situation may well give rise to a relationship of power over the victim

- Celebrity entertainer and fan – calls to mind the Jimmy Saville case

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Vicarious liability - drawing the line (2)

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- Priest and parishoner

Maga v Archbishop of Birmingham [2010] - claimant brought a claim against the Archbishop alleging he’d been sexually abused by him as a child. The claimant had met C through social events at the church and had done jobs for him at the presbytery and elsewhere. Should there be VL? Court held it should but doubtful that is right – the general moral authority vested in the Priest met the relationship requirement but does it meet the closely connected test? It is not entirely clear that the relationship caused an additional risk of the abuse. The Priest in charge was negligent in being inappropriately casual in supervising C. Strange application of the Lister rule about close connection but Lord Neuberger said this was satisfied as the priest was always dressed in clerical garb so was never “off duty”.

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Vicarious liability - drawing the line (3)

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- Foster parent and child

NA [2015] –vicarious liability of a local authority when placing children with fosterparents. Is this the sort of relationship which can give rise to vicarious liability? Seems that it is not because the very nature of fostering is that it should give the children a family life, it is not a situation that the local authority is akin to employing the foster parents so local authority not VL for foster parents’ abuse. This is consistent with the Canadian decision KLB v British Columbia [2003].

S v Attorney-General– NZ case where the court held that foster parents were in the position of agents of the local authority so imposed VL on the basis of that. Seems largely incorrect.

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Vicarious liability - drawing the line (4)

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Question that still remains is what about cases of other intentional wrongdoing which isn’t sexual abuse? The “close connection” test has also been applied in other circumstances.

Weddall v Barchester Healthcare; Wallbank v Wallbank Fox Designs (CA, 2012) – In Weddall he was attacked by a drunk employee who thought he was being mocked after being called in to cover a shift, and this employee was prosecuted and imprisoned for it. In Wallbank the plaintiff was employed by the defendant and spoke to B (an employee) about his shortcomings and B attacked W.

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Vicarious liability - drawing the line (5)

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Was there VL in these two cases? Claim in Weddall failed as it was an independent venture of M’s own, no close connection between that and his employment. But the claim in Wallbank succeeded as the risk of an overly robust reaction to an instruction was a risk created by employment.

Todd thinks the distinction between the two is quite arbitrary and suggests that the geographical and temporal connection between the order and the action is relevant and might also be important if the assault happens away from work.

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Vicarious liability - drawing the line (6)

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Mohamud v Morrisons(CA, 2014) - petrol pump attendant assaulted a customer, racially motivated. Held it was not in the course of his employment so no VL.

Vaickuviene v JSainsbury plc [2013] - no VL when employee was murdered at work, as no close connection between the employment and the risk of murder.

Graham v Commercial Body Works [2015] - employer was not liable where an employee (for fun) applied a flammable fluid to his friends overalls and then set them alight.

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Vicarious liability for agents

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Relationship of principal and agent is effectively when one person (as principal) authorises someone to act on their behalf then there is an agency relationship. May include independent contractors which would defeat the purpose of VL. There may be VL in two situations:

1. Where the agent is a person who is engaged for the purpose of bringing the principal into contractual relations with third parties: Nathan v Dollars & Sense Ltd [2008] - SC in NZ affirmed VL in this situation.

2. Where the agent is authorised to act in relation to the principal's clients: Lloyd v Grace, Smith & Co [1912] - agent defrauded principal's clients, held unanimously by HOL that the defendants were vicariously liable.

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Vicarious liability for agents (2)

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Can justify these cases as it is an abuse of a power conferring situation, there is a risk of economic loss. In the case of true agents in the contractual sense, VL can be imposed.

Morgans v Launchbury - there is VL when you get someone to drive your car on your behalf. If anything it is just an anomalous exception and only stands in the context of car driving.

Cannot use agency argument with foster parents.

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Non-delegable duties (1)

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In some situations you can't delegate the duty to take care and if you do delegate you remain liable for any negligence by the person you have delegated it to.

There are two broad categories where a non-delegable duty has been held to arise:

1. First is a varied and anomalous class where the defendant employs independent contractors to perform extra-hazardous operations

2. Second category comprises cases with three critical characteristics:

a. It arises not from the negligent character of the act itself but because of an antecedent relationship between the defendant and the claimant

b. The duty is a positive and affirmative duty to protect a particular class of persons against a particular class of risks, and not simply a duty to refrain from acting in a way that foreseeably causes injury

c. The duty is by virtue of that relationship personal to the defendant

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Non-delegable duties (2)

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No real discussion of these until the recent case of Woodland v Essex CC [2013] UKSC. Lord Sumption said that English law has long recognised this duty and he seeks to explain it and put some order into this area.

He identified certain broad categories of case – a key category was where “there is an antecedent relationship between the claimant and the defendant (i) which places the claimant in the actual custody, charge of care of the defendant and (ii) from which it is possible to impute to the defendant the assumption of a positive duty to protect the claimant from harm”.

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Non-delegable duties (3)

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These factors characterise cases where a non-delegable duty exists:

• The claimant is a patient or a child, or for some other reason is especially vulnerable or dependent on the protection of the defendant against the risk of injury

• The claimant has no control over how the defendant chooses to perform those obligations

• The defendant has delegated to a third party some function which is an integral part of the positive duty which he has assumed towards the claimant; and the third party is exercising the defendant’s custody or care of the claimant and the element of control that goes with it.

• The third party has been negligent in the performance of the very function assumed by the defendant and delegated by the defendant to him.

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Non-delegable duties (4)

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Even if all these factors above are present, “the courts should be sensitive about imposing unreasonable financial burdens on those providing critical public services. A non-delegable duty of care should be imputed to schools only so far as it would be fair, just and reasonable to do so. But I do not accept that any unreasonable burden would be cast on them by recognising the existence of a non-delegable duty on the criteria which I have summarised above”.

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Non-delegable duties (5)

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In Woodland (school swimming lessons case) it couldn't be VL as there was an independent contractor but held that there was a non-delegable duty owed by the educational authority vis-a-vis the conduct of the swimming lessons and the above factors were satisfied.

Lord Sumption emphasised that it was only where the obligation of the authority was to perform the relevant function but they delegated that function to someone else that a non-delegable duty could be owed.

This was a big development in the law.

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Non-delegable duties (6): differences with VL

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Focus in VL is the relationship between the defendant and the wrongdoer, whereas here we are focusing on the relationship between the defendant and the vulnerable claimant.

Sometimes it seems that either principle can apply e.g. in Lister v Hesley Hall.

Various Claimants could not have been argued as a non-delegable duty as the De La Salle Institute had not assumed protective custody over the children, so it is vicarious liability or nothing. Whereas Woodland could not be argued as vicarious liability as it cannot be extended to conduct of independent contractors.

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Non-delegable duties (7)

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NA v Nottingham City Council – foster parents case, could it be a non-delegable duty? It is certainly arguable if you apply Lord Sumption’s factors to the fostering of children you could argue they are satisfied but the argument failed in this case.

The three members of the court gave three different reasons as to why not:

1. Tomlinson LJ said in order to be non-delegable the duty had to relate to a duty that the delegator had assumed itself and fostering was an activity which the authority had to entrust to someone else – by arranging foster placements they discarded rather than delegated the duty.

2. BurnettLJ said you can’t use non-delegable duty in the case of an action for an assault, it is only for negligence.

3. Black LJ said no non-delegable duty should be imposed, even though the Woodland features were present, on the ground that it would not be fair, just and reasonable to do so – it would have imposed an unreasonable financial burden and would have meant that scarce resources were channelled into preventing and insuring against liability and it would lead to defensive practices in the placement of children in order to avoid liability.