Vicarious liability
Encyclopedia
Vicarious liability is a form of strict
, secondary liability
that arises under the common law
doctrine of agency
– respondeat superior
– the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability or duty to control" the activities of a violator. It can be distinguished from contributory liability, another form of secondary liability, which is rooted in the tort
theory of enterprise liability
.
doctrine, for negligent acts or omissions by their employees in the course of employment
(sometimes referred to as 'scope of employment'). For an act to be considered within the course of employment it must either be authorised or be so connected with an authorised act that it can be considered a mode, though an improper mode, of performing it.
Courts sometimes distinguish between an employee's "detour" or "frolic
". For instance, an employer will be held liable if it is shown that the employee had gone on a mere detour in carrying out their duties, whereas an employee acting in his or her own right rather than on the employer's business is undertaking a "frolic" and will not subject the employer to liability.
Neither, generally, will an employer be held liable for assault
or battery
committed by employees, unless the use of force
was part of their employment (e.g. police officer
s), or they were in a field likely to create friction with persons they encountered (e.g. car re-possessors). However, the employer of an independent contractor
is not held vicariously liable for the tortious acts of the contractor, except where the contractor injures someone to whom the employer owes a non-delegable duty of care
, such as where the employer is a school authority and the injured party a pupil.
Employers are also liable under the common law
principle represented in the Latin phrase, "qui facit per alium facit per se", i.e. the one who acts through another, acts in his or her own interests. This is a parallel concept to vicarious liability and strict liability in which one person is held liable in criminal law
or tort
for the acts or omissions of another.
One example is in the case of a bank, finance company or other lienholder performing a repossession of an automobile from the registered owner
for non-payment, the lienholder has a non-delegatable duty not to cause a breach of the peace in performing the repossession, or it will be liable for damages even if the repossession is performed by an agent. This requirement means that whether a repossession is performed by the lienholder or by an agent, the repossessor must not cause a breach of the peace or the lienholder will be held responsible.
This requirement not to breach the peace is held upon the lienholder even if the breach is caused by, say, the debtor objecting to the repossession or resists the repossession. In the court case of MBank El Paso v. Sanchez, 836 S.W.2d 151, where a hired repossessor towed away a car even after the registered owner locked herself in it, the court decided that this was an unlawful breach of the peace and declared the repossession invalid. The debtor was also awarded $1,200,000 in damages from the bank.
, the question of parental responsibility
generally and the issue of parental vicarious liability for the torts of their children is evolving. What is clear is that parents can be held liable for their own negligent acts, such as failure to supervise a child, or failure to keep a dangerous instrument such as a handgun
outside the reach of their children.
, a corporation
can only act through its employees and agents so it is necessary to decide in which circumstances the law of agency or vicarious liability will apply to hold the corporation liable in tort for the fraud
s of its directors or senior officers.
If liability for the particular tort requires a state of mind, then to be liable, the director or senior officer must have that state of mind and it must be attributed to the company. In Meridian Global Funds Management Asia Limited v. Securities Commission [1995] 2 AC 500, two employees of the company, acting within the scope of their authority but unknown to the directors, used company funds to acquire some shares. The question was whether the company knew, or ought to have known that it had acquired those shares.
The Privy Council
held that it did. Whether by virtue of their actual or ostensible authority as agents acting within their authority (see Lloyd v Grace, Smith & Co. [1912] AC 716) or as employees acting in the course of their employment (see Armagas Limited v Mundogas S.A. [1986] 1 AC 717), their acts and omissions and their knowledge could be attributed to the company, and this could give rise to liability as joint tortfeasors where the directors have assumed responsibility on their own behalf and not just on behalf of the company.
So if a director or officer is expressly authorised to make representations of a particular class on behalf of the company, and fraudulently makes a representation of that class to a Third Party causing loss, the company will be liable even though the particular representation was an improper way of doing what he was authorised to do. The extent of authority is a question of fact and is significantly more than the fact of an employment which gave the employee the opportunity to carry out the fraud.
In Panorama Developments (Guildford) Limited v Fidelis Furnishing Fabrics Limited [1971] 2 QB 711, a company secretary fraudulently hired cars for his own use without the knowledge of the managing director. A company secretary routinely enters into contracts in the company's name and has administrative responsibilities that would give apparent authority to hire cars. Hence, the company was liable.
, the Supreme Court of Canada ruled that in cases of abuse scandals involving Catholic priests, liability derives from the power and authority over parishioners that the Church gave to its clergymen.
Strict liability
In law, strict liability is a standard for liability which may exist in either a criminal or civil context. A rule specifying strict liability makes a person legally responsible for the damage and loss caused by his or her acts and omissions regardless of culpability...
, secondary liability
Secondary liability
Secondary liability, or indirect infringement, arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried out by another party. The US has statutorily codified secondary liability rules for trademarks and patents; however,...
that arises under the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
doctrine of agency
Agency (law)
The law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another to create a legal relationship with a third party...
– respondeat superior
Respondeat superior
Respondeat superior is a legal doctrine which states that, in many circumstances, an employer is responsible for the actions of employees performed within the course of their employment...
– the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability or duty to control" the activities of a violator. It can be distinguished from contributory liability, another form of secondary liability, which is rooted in the tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
theory of enterprise liability
Enterprise Liability
Enterprise liability is a legal doctrine under which individual entities can be held jointly liable for some action on the basis of being part of a shared enterprise...
.
Employers' liability
Employers are vicariously liable, under the respondeat superiorRespondeat superior
Respondeat superior is a legal doctrine which states that, in many circumstances, an employer is responsible for the actions of employees performed within the course of their employment...
doctrine, for negligent acts or omissions by their employees in the course of employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...
(sometimes referred to as 'scope of employment'). For an act to be considered within the course of employment it must either be authorised or be so connected with an authorised act that it can be considered a mode, though an improper mode, of performing it.
Courts sometimes distinguish between an employee's "detour" or "frolic
Frolic (law)
Frolic and detour in the law of torts occur when an employee makes a physical departure from the service of his employer...
". For instance, an employer will be held liable if it is shown that the employee had gone on a mere detour in carrying out their duties, whereas an employee acting in his or her own right rather than on the employer's business is undertaking a "frolic" and will not subject the employer to liability.
Neither, generally, will an employer be held liable for assault
Assault (tort)
In common law, assault is the tort of acting intentionally, that is with either general or specific intent, causing the reasonable apprehension of an immediate harmful or offensive contact. Because assault requires intent, it is considered an intentional tort, as opposed to a tort of negligence...
or battery
Battery (tort)
At common law, battery is the tort of intentionally and voluntarily bringing about an unconsented harmful or offensive contact with a person or to something closely associated with them . Unlike assault, battery involves an actual contact...
committed by employees, unless the use of force
Use of force
The term use of force describes a right of an individual or authority to settle conflicts or prevent certain actions by applying measures to either: a) dissuade another party from a particular course of action, or b) physically intervene to stop them...
was part of their employment (e.g. police officer
Police officer
A police officer is a warranted employee of a police force...
s), or they were in a field likely to create friction with persons they encountered (e.g. car re-possessors). However, the employer of an independent contractor
Independent contractor
An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when...
is not held vicariously liable for the tortious acts of the contractor, except where the contractor injures someone to whom the employer owes a non-delegable duty of care
Duty of care
In tort law, a duty of care is a legal obligation imposed on an individual requiring that they adhere to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be established to proceed with an action in negligence. The claimant...
, such as where the employer is a school authority and the injured party a pupil.
Employers are also liable under the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
principle represented in the Latin phrase, "qui facit per alium facit per se", i.e. the one who acts through another, acts in his or her own interests. This is a parallel concept to vicarious liability and strict liability in which one person is held liable in criminal law
Criminal law
Criminal law, is the body of law that relates to crime. It might be defined as the body of rules that defines conduct that is not allowed because it is held to threaten, harm or endanger the safety and welfare of people, and that sets out the punishment to be imposed on people who do not obey...
or tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
for the acts or omissions of another.
Principals' liability
The owner of an automobile can be held vicariously liable for negligence committed by a person to whom the car has been loaned, as if the owner was a principal and the driver his or her agent, if the driver is using the car primarily for the purpose of performing a task for the owner. Courts have been reluctant to extend this liability to the owners of other kinds of chattel. For example, the owner of a plane will not be vicariously liable for the actions of a pilot to whom he or she has lent it to perform the owner's purpose. In the United States, vicarious liability for automobiles has since been outlawed with respect to car leasing and rental in all 50 states.One example is in the case of a bank, finance company or other lienholder performing a repossession of an automobile from the registered owner
Registered owner
The term registered owner is usually used in instances of title of a vehicle to refer to the person who has right of possession of the vehicle, as opposed to the party that has right of property...
for non-payment, the lienholder has a non-delegatable duty not to cause a breach of the peace in performing the repossession, or it will be liable for damages even if the repossession is performed by an agent. This requirement means that whether a repossession is performed by the lienholder or by an agent, the repossessor must not cause a breach of the peace or the lienholder will be held responsible.
This requirement not to breach the peace is held upon the lienholder even if the breach is caused by, say, the debtor objecting to the repossession or resists the repossession. In the court case of MBank El Paso v. Sanchez, 836 S.W.2d 151, where a hired repossessor towed away a car even after the registered owner locked herself in it, the court decided that this was an unlawful breach of the peace and declared the repossession invalid. The debtor was also awarded $1,200,000 in damages from the bank.
Parental liability
In the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the question of parental responsibility
Parental responsibility (criminal)
In Canada and the United States, the term parental responsibility refers to the potential or actual liability that may be incurred by parents for the behaviour of their children.-The Canadian law:...
generally and the issue of parental vicarious liability for the torts of their children is evolving. What is clear is that parents can be held liable for their own negligent acts, such as failure to supervise a child, or failure to keep a dangerous instrument such as a handgun
Handgun
A handgun is a firearm designed to be held and operated by one hand. This characteristic differentiates handguns as a general class of firearms from long guns such as rifles and shotguns ....
outside the reach of their children.
The liability of corporations in tort
In English lawEnglish law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
, a corporation
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
can only act through its employees and agents so it is necessary to decide in which circumstances the law of agency or vicarious liability will apply to hold the corporation liable in tort for the fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
s of its directors or senior officers.
If liability for the particular tort requires a state of mind, then to be liable, the director or senior officer must have that state of mind and it must be attributed to the company. In Meridian Global Funds Management Asia Limited v. Securities Commission [1995] 2 AC 500, two employees of the company, acting within the scope of their authority but unknown to the directors, used company funds to acquire some shares. The question was whether the company knew, or ought to have known that it had acquired those shares.
The Privy Council
Privy council
A privy council is a body that advises the head of state of a nation, typically, but not always, in the context of a monarchic government. The word "privy" means "private" or "secret"; thus, a privy council was originally a committee of the monarch's closest advisors to give confidential advice on...
held that it did. Whether by virtue of their actual or ostensible authority as agents acting within their authority (see Lloyd v Grace, Smith & Co. [1912] AC 716) or as employees acting in the course of their employment (see Armagas Limited v Mundogas S.A. [1986] 1 AC 717), their acts and omissions and their knowledge could be attributed to the company, and this could give rise to liability as joint tortfeasors where the directors have assumed responsibility on their own behalf and not just on behalf of the company.
So if a director or officer is expressly authorised to make representations of a particular class on behalf of the company, and fraudulently makes a representation of that class to a Third Party causing loss, the company will be liable even though the particular representation was an improper way of doing what he was authorised to do. The extent of authority is a question of fact and is significantly more than the fact of an employment which gave the employee the opportunity to carry out the fraud.
In Panorama Developments (Guildford) Limited v Fidelis Furnishing Fabrics Limited [1971] 2 QB 711, a company secretary fraudulently hired cars for his own use without the knowledge of the managing director. A company secretary routinely enters into contracts in the company's name and has administrative responsibilities that would give apparent authority to hire cars. Hence, the company was liable.
Employers' indemnity
The principle of vicarious liability can also be bypassed with a legal instrument known as Employers' indemnity. When an employer is successfully sued, they have the option of suing the tortfeasor for an indemnity to recover the damages back. This principle is greatly criticised when used in the case of Lister v Romford Ice Cold StorageEcclesiastical corporations
In the 2003 decision Doe v. BennettDoe v. Bennett
John Doe v. Bennett, 2004 SCC 17 is a legal ruling by the Supreme Court of Canada which upheld the lower court's decision that the ecclesiastical corporation, Roman Catholic Episcopal Corporation of St...
, the Supreme Court of Canada ruled that in cases of abuse scandals involving Catholic priests, liability derives from the power and authority over parishioners that the Church gave to its clergymen.