Vicarious liability in English law
Encyclopedia
Vicarious liability in English law is a doctrine of English tort law
that imposes strict liability
on employers for the wrongdoings of their employees. Generally, an employer will be held liable for any tort
committed while an employee is conducting their duties. This liability has expanded in recent years following the decision in Lister v Hesley Hall Ltd to better cover intentional torts, such as sexual assault
and deceit. Historically, it was held that most intentional wrongdoings were not in the course of ordinary employment, but recent case law suggests that where an action is closely connected with an employee's duties, an employer can be found vicariously liable.
Justification for such wide recovery has been made in several areas. The first is that, as is common in tort law, policy reasons should allow those injured to have means of compensation. Employers generally have larger assets, and greater means with which to offset any losses(deep pocket compensation) Secondly, it is under the instruction of an employer by which a tort is committed; the employer can be seen to gain from the duties of their employees, and thus must bear the consequences of any wrongdoings committed by them. Lastly, it has been justified as a way to reduce the taking of risks by employers, and to ensure adequate precautions are taken in conducting business.
Historical tests centered around finding control between a supposed employer and an employee, in a form of master and servant relationship. The roots for such a test can be found in Yewens v Noakes, where Bramwell LJ stated that:
The control test effectively imposed liability where an employer dictated both what work was to be done, and how it was to be done. This is aptly suited for situations where precise instructions are given by an employer; it can clearly be seen that the employer is the causal link
for any harm which follows. If on the other hand an employer does not determine how an act should be carried out, then the relationship would instead be one of employer and independent contractor. This distinction was explained by Slesser LJ
:
In recent years, as the duties of employees have grown ever more specialised and far reaching, the control test has seen less primary use in establishing liability. It is difficult to state for example that a hospital administrator controls the method and actions of a professional doctor
, despite liability having been clearly established in such cases. Different formulations of the test have been proposed, in an attempt to rectify these problems. One such formulation focuses on the ability of an employer to specify where and when tasks be carried out, and with whose tools and materials.
Other tests of employment have focused on different contractual and external factors. Lord Denning proposed a test based on the integration of an individual to a business or organisation. Tests based on the economic relationship between an employer and employee have found favour in subsequent cases, notably Market Investigations Ltd v Minister of Social Security, in the decision of Lord Cooke. Here, it was argued that where a person was in business on their own account (and at their own risk), they would be under a contract for services, whilst otherwise they would be under a contract of service. This idea have been cited with approval by the Privy Council
, with several relevant factors being considered, such as risk of loss, and chance of profit.
As can be noted, liability is generally not extended to the acts of independent contractors. Though such a distinction has been criticised, there are several circumstances in which an employer may be liable for the acts of contractors. If an employer commissions a tort, this will render the employer a joint tortfeasor. Additionally, where an employer is negligent in selecting a competent third party contractor, liability may be imposed. The broadest exception however is where a non-delegable duty is imposed upon an employer, either by statute or through common law, to prevent the harm of others. Where a duty is imposed by statute, either to carry out work in a certain way, or to take due care in carrying out work, then this is non-delegable. Common law duties may arise in several exceptional circumstances. One such is where an activity is being undertaken which is especially hazardous, and involves obvious risks of damage. This duty was recognised in Honeywill and Stein Ltd v Larkin Brothers Ltd
, where photographers who negligently photographed the interior of a theatre
set alight to the building. Their employers were found vicariously liable, as the dangerous methods of photography created a fire hazard. Additionally, where work is being undertaken on a highway, a non-delegable duty is created not to endanger any road users. Lastly, occupiers are liable in full where an independent contractor, through negligence, allows fire to spread to neighbouring land.
Once it is established that the sufficient relationship of employer and employee exists, it is necessary that any tort be committed in the course of employment. As with distinguishing an employer and employee relationship, there is no one test which adequately establishes which acts employers are vicariously liable for. Such determinations rest upon precedent, and the facts of each individual case. A preferred test of the courts was formulated by John William Salmond
, some 100 years ago, which states that an employer will be held liable for either a wrongful act they have authorised, or a wrongful and unauthorised mode of an act that was authorised. The rationale for this is policy based; if an employer could simply issue detailed and long prohibitions on what an employee was not to do, they could never be found vicariously liable for the wrongdoings of their employees. However, a distinction can be drawn between acts which are prohibited, and acts which take employees out of the course of their employment. An illustration of the test is provided by two contrasting cases, Limpus v London General Omnibus Company and Beard v London General Omnibus Company, both involving road collisions. In the former, a driver pulled in front of another rival omnibus, in order to obstruct it. Despite express prohibitions from the employer, they were found liable; this was merely an unauthorised mode of the employee carrying out his duties (driving), not an entirely new activity. By contrast, in the latter case, London General Omnibus Company
were not liable where a conductor (employed to collect fares on board the bus) negligently chose to drive the vehicle instead; this was completely outside of his duties.
The surrounding circumstances of wrongdoings are often important in deciding whether an act is in the course of employment or not. For example, where a professional rugby player
was expressly prohibited in contract from assaulting another player, it was held that as it had been contemplated by the drafters, such an act was in the course of his employment. Where in Century Insurance Co v Northern Ireland Road Transport Board an employee set alight to a petrol station, by throwing a match carelessly away while refuelling a petrol tanker, this was adjudged to have been in the course of his employment.
There have been contrasting judgments where employees have given lifts in their vehicles, during hours of employment, as to whether their employers can be vicariously liable. Two similar cases demonstrate this problem. The first, Conway v George Wimpey & Co Ltd involved a driver, who, despite express prohibitions, gave a lift to an employee of another firm, and negligently injured him in an accident. No liability was imposed on the employer, as this was deemed to be an activity outside of the employee's duties. This can be compared to Rose v Plenty
, where liability was imposed where a small boy was injured in a road accident, while helping a milkman
on his rounds. It has been stated that these two decisions are not reconcilable. However, Lord Denning offered some justification in Rose v Plenty for the distinction, stating that the employee, in allowing the boy to assist him, was not acting outside of his employment, but acting in furtherance of it (through the boy assisting his duties).
Additional problems have arisen when attempting to establish where detours and leave from duty take an employee out of the course of his employment. One idea which is used in this area is that an employer will only be found liable where an employee is going about his business in a standard way. For example, a minor detour would not take an employee out of the course of his employment, but a 'frolic of his own', which did not at all involve his duties, would. Journeys to and from work, and whether these are regarded as in the course of employment, were considered in Smith v Stages, where Lord Lowry
established several factors for determining liability. Ordinarily, employees will not be in the course of employment travelling to and from work, unless their transport is provided by their employer. However, travelling to an alternative place of work or to a workplace, during the employer's time, will be in the course of employment. Where course of employment generally begins with travelling to work has been established in the case of Compton v McClure. Here, an employer was found liable for the negligent driving of an employee, who, in an effort to clock in on time, injured another employee at the place of employment. It was stated that the 'least artificial place' to establish employment began was at the gates of the employer's factory, where they established speed limits, and supervised conduct.
, for example establishes vicarious liability of thefts by an employee, where there is a non-delegable duty to keep the claimant's possessions safe. However, the scope of such liability was limited to torts committed in the course of employment, under the second limb of Salmond's course of employment test. This precluded recovery for torts committed while an employee was not involved in the furtherance of his employer's business. The importance vested in Salmond's test was not reconsidered until Lister v Hesley Hall Ltd, a case involving vicarious liability for sexual abuse. In following the ratio of the Supreme Court of Canada
in the case of Bazley v Curry, the House of Lords
established a newer test for finding liability in cases of intentional torts; where a tort committed by an employee is closely connected to their duties, their employer may be found liable. Although of undoubted greater use to claimants, the judicial latitude given to this test has been occasionally regarded as questionable. Lord Nicholls has stated that a "lack of precision is inevitable given the infinite range of circumstances where the issue arises."
, liability for assault
has been found in several cases prior to Lister v Hesley Hall Ltd. Poland v Parr & Sons involved an employee who assaulted a boy, believing him to be attempting to steal his employer's goods. Vicarious liability was imposed based on the employee's implied authority to protect his master's goods. Liability was also found where a tram
conductor - in his duties - pushed a passenger out a tram, after he had not paid his fare. However, assault involving personal vengeance and spite was generally not found to result in liability, as in Warren v Henlys Ltd. This represents a principal limitation of the previous position of liability: only where an act was in the course of employment could an employer be liable. Premeditation and personal motive would take an employee out of their course of employment, breaking liability. The establishment of the close connection test has produced different results in cases of intentional assault, as demonstrated in Mattis v Pollock
. Here, a bouncer
for a nightclub
was involved in a dispute with a customer. He subsequently went home and returned with a knife, stabbing the customer, resulting in serious injuries. The employer was held liable, despite the bouncer's intent on revenge, due to the close connection of the tort to the bouncer's employment and duties. It was of particular importance that the bouncer was employed to act in an aggressive and tough manner.
Morris v CW Martin & Sons Ltd
, involving an employee who stole a fur coat from a dry cleaners, saw the establishment of this principle, with Lord Denning stating:
Vicarious liability for theft has also been found due to poor selections of employees by an employer, as in Nahhas v Pier House Management. Here, the management company of a luxury block of flats employed a porter, who was an 'ex-professional thief', to manage their building. A tenant of the building entrusted him with her keys, and was subsequently robbed of expensive jewellery. The management company were found to have been negligent in hiring the porter, having not carried out sufficient checks on his background, address, or obtaining a written reference. It has been stated it is unlikely that as a general rule, where there are proper checks and systems to prevent such incidents, liability would be found; it is in the interests of society to allow rehabilitation of offenders.
overruled the earlier case, with Lord Steyn stating:
In overruling T v North Yorkshire CC, the Lords established that the relative closeness connecting the sexual abuse and the warden's duties established liability. It was of importance however that the warden's duties were closely linked to the abuse. The mere opportunity to abuse children was not the reason for liability; it has been suggested that if it were a groundsman who had carried out the abuse, it would not have resulted in liability.
of their employees since the mid-nineteenth century, under the decision of Barwick v English Joint Stock Bank. This liability was extended in the early 20th century, to cover fraudulent actions which were not of benefit to the employer, a previous requirement. Thereupon, the test for vicarious liability of fraud was whether it was within an employee's authority – either actual, or outwardly appearing – to carry out the fraudulent actions that he did. It was not enough that an employee merely asserted that he had supposed authority, however; the defrauded individual or company must have been assured or led to believe by the employer – or have inferred through standard dealings – that the employee in question had it.
As with other intentional torts, such liability was extended following Lister v Hesley Hall Ltd, to cover any fraud which is closely related to an employee's employment. The first case of fraud to be decided under this authority was Dubai Aluminium Co Ltd v Salaam, involving the fraud of a senior partner in a firm of solicitors. The House of Lords
chose to extend the principal liability of employers, to cover fraudulent representations made by employees with no actual or ostensible authority to make them. Here, despite the employer having made no representations to the claimants, it was found that the close connection between the partner's fraud and his duties established liability.
, that where an employer is found vicariously liable for an employee's actions, they are entitled to recover an indemnity
from them, to cover such losses. The House of Lords
accepted by a narrow margin that there may be an implied term
in the contracts of employees, by which they must exercise reasonable care and skill in their work. Such principles has received both criticism and support, for various reasons. Advocacy of the indemnity features on rules of principal liability; the person to commit a tort and to cause damage should pay damages arising from it. Critics state that the recovery of an indemnity is contrary to equity, due to the general lack of wealth of employees and servants. The advent of widespread insurance
of employers has led to the recovery of indemnities being widely abandoned. This is illustrated by the British Insurance Association entering into a gentlemen's agreement
not to utilise the rule:
As such, indemnities are not pursued from employers except in exceptional circumstances.
English tort law
English tort law concerns civil wrongs, as distinguished from criminal wrongs, in the law of England and Wales. Some wrongs are the concern of the state, and so the police can enforce the law on the wrongdoers in court – in a criminal case...
that imposes strict liability
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...
on employers for the wrongdoings of their employees. Generally, an employer will be held liable for any 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...
committed while an employee is conducting their duties. This liability has expanded in recent years following the decision in Lister v Hesley Hall Ltd to better cover intentional torts, such as sexual assault
Sexual assault
Sexual assault is an assault of a sexual nature on another person, or any sexual act committed without consent. Although sexual assaults most frequently are by a man on a woman, it may involve any combination of two or more men, women and children....
and deceit. Historically, it was held that most intentional wrongdoings were not in the course of ordinary employment, but recent case law suggests that where an action is closely connected with an employee's duties, an employer can be found vicariously liable.
Justification for such wide recovery has been made in several areas. The first is that, as is common in tort law, policy reasons should allow those injured to have means of compensation. Employers generally have larger assets, and greater means with which to offset any losses(deep pocket compensation) Secondly, it is under the instruction of an employer by which a tort is committed; the employer can be seen to gain from the duties of their employees, and thus must bear the consequences of any wrongdoings committed by them. Lastly, it has been justified as a way to reduce the taking of risks by employers, and to ensure adequate precautions are taken in conducting business.
Developments in establishing liability
An employer is strictly liable for torts committed by those under his command, when they are found to be his employees. To this end, the courts must find a sufficient relationship to this effect, where issues of vicarious liability are raised. It has been stated judicially that no one test can adequately cover all types and instances of employment; thus, generally, the tests used and ultimate determination rest upon the individual aspects of each case, looking at all the factors as a whole. For example, it need not matter that an employer classifies a relationship as one of independent contractor, if all the other factors represent a relationship of employee.Historical tests centered around finding control between a supposed employer and an employee, in a form of master and servant relationship. The roots for such a test can be found in Yewens v Noakes, where Bramwell LJ stated that:
"...a servant is a person who is subject to the command of his master as to the manner in which he shall do his work."
The control test effectively imposed liability where an employer dictated both what work was to be done, and how it was to be done. This is aptly suited for situations where precise instructions are given by an employer; it can clearly be seen that the employer is the causal link
Causation in English law
Causation in English law concerns the legal tests of remoteness, causation and foreseeability in the tort of negligence. It is also relevant for English criminal law and English contract law....
for any harm which follows. If on the other hand an employer does not determine how an act should be carried out, then the relationship would instead be one of employer and independent contractor. This distinction was explained by Slesser LJ
Henry Slesser
Sir Henry Herman Slesser, KC was a barrister and Labour Party politician in the United Kingdom, and later a senior judge....
:
Physician
A physician is a health care provider who practices the profession of medicine, which is concerned with promoting, maintaining or restoring human health through the study, diagnosis, and treatment of disease, injury and other physical and mental impairments...
, despite liability having been clearly established in such cases. Different formulations of the test have been proposed, in an attempt to rectify these problems. One such formulation focuses on the ability of an employer to specify where and when tasks be carried out, and with whose tools and materials.
Other tests of employment have focused on different contractual and external factors. Lord Denning proposed a test based on the integration of an individual to a business or organisation. Tests based on the economic relationship between an employer and employee have found favour in subsequent cases, notably Market Investigations Ltd v Minister of Social Security, in the decision of Lord Cooke. Here, it was argued that where a person was in business on their own account (and at their own risk), they would be under a contract for services, whilst otherwise they would be under a contract of service. This idea have been cited with approval by 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...
, with several relevant factors being considered, such as risk of loss, and chance of profit.
As can be noted, liability is generally not extended to the acts of independent contractors. Though such a distinction has been criticised, there are several circumstances in which an employer may be liable for the acts of contractors. If an employer commissions a tort, this will render the employer a joint tortfeasor. Additionally, where an employer is negligent in selecting a competent third party contractor, liability may be imposed. The broadest exception however is where a non-delegable duty is imposed upon an employer, either by statute or through common law, to prevent the harm of others. Where a duty is imposed by statute, either to carry out work in a certain way, or to take due care in carrying out work, then this is non-delegable. Common law duties may arise in several exceptional circumstances. One such is where an activity is being undertaken which is especially hazardous, and involves obvious risks of damage. This duty was recognised in Honeywill and Stein Ltd v Larkin Brothers Ltd
Honeywill and Stein Ltd v Larkin Brothers Ltd
Honeywill and Stein Ltd v Larkin Brothers Ltd [1934] 1 KB 191 is an English tort law case, establishing that employers may be vicariously liable for damage done by their independent contractors, where they carry out 'extra-hazardous' activities. Generally, employers are only vicariously liable for...
, where photographers who negligently photographed the interior of a theatre
Theatre
Theatre is a collaborative form of fine art that uses live performers to present the experience of a real or imagined event before a live audience in a specific place. The performers may communicate this experience to the audience through combinations of gesture, speech, song, music or dance...
set alight to the building. Their employers were found vicariously liable, as the dangerous methods of photography created a fire hazard. Additionally, where work is being undertaken on a highway, a non-delegable duty is created not to endanger any road users. Lastly, occupiers are liable in full where an independent contractor, through negligence, allows fire to spread to neighbouring land.
The connection of torts to employment
John William Salmond
Sir John William Salmond, KC was a legal scholar, public servant and judge in New Zealand.-Biography:Salmond was born in North Shields, Northumberland, England, in 1862, the eldest son of William Salmond , a Presbyterian minister and professor...
, some 100 years ago, which states that an employer will be held liable for either a wrongful act they have authorised, or a wrongful and unauthorised mode of an act that was authorised. The rationale for this is policy based; if an employer could simply issue detailed and long prohibitions on what an employee was not to do, they could never be found vicariously liable for the wrongdoings of their employees. However, a distinction can be drawn between acts which are prohibited, and acts which take employees out of the course of their employment. An illustration of the test is provided by two contrasting cases, Limpus v London General Omnibus Company and Beard v London General Omnibus Company, both involving road collisions. In the former, a driver pulled in front of another rival omnibus, in order to obstruct it. Despite express prohibitions from the employer, they were found liable; this was merely an unauthorised mode of the employee carrying out his duties (driving), not an entirely new activity. By contrast, in the latter case, London General Omnibus Company
London General Omnibus Company
The London General Omnibus Company or LGOC, was the principal bus operator in London between 1855 and 1933. It was also, for a short period between 1909 and 1912, a motor bus manufacturer.- Overview :...
were not liable where a conductor (employed to collect fares on board the bus) negligently chose to drive the vehicle instead; this was completely outside of his duties.
The surrounding circumstances of wrongdoings are often important in deciding whether an act is in the course of employment or not. For example, where a professional rugby player
Rugby player
Rugby player can refer to a participant in one of two different sports rugby union and rugby league. It can also refer to a participant in the sport of wheelchair rugby.*:Category:Rugby union players*:Category:Rugby league footballers...
was expressly prohibited in contract from assaulting another player, it was held that as it had been contemplated by the drafters, such an act was in the course of his employment. Where in Century Insurance Co v Northern Ireland Road Transport Board an employee set alight to a petrol station, by throwing a match carelessly away while refuelling a petrol tanker, this was adjudged to have been in the course of his employment.
There have been contrasting judgments where employees have given lifts in their vehicles, during hours of employment, as to whether their employers can be vicariously liable. Two similar cases demonstrate this problem. The first, Conway v George Wimpey & Co Ltd involved a driver, who, despite express prohibitions, gave a lift to an employee of another firm, and negligently injured him in an accident. No liability was imposed on the employer, as this was deemed to be an activity outside of the employee's duties. This can be compared to Rose v Plenty
Rose v Plenty
Rose v Plenty [1976] 1 WLR 141 is an English tort law case, on the issue of where an employee is acting within the course of their employment...
, where liability was imposed where a small boy was injured in a road accident, while helping a milkman
Milkman
A milkman is a person, traditionally male, who delivers milk in milk bottles or cartons. Milk deliveries frequently occur in the morning and it is not uncommon for milkmen to deliver products other than milk such as eggs, cream, cheese, butter, yogurt or soft drinks...
on his rounds. It has been stated that these two decisions are not reconcilable. However, Lord Denning offered some justification in Rose v Plenty for the distinction, stating that the employee, in allowing the boy to assist him, was not acting outside of his employment, but acting in furtherance of it (through the boy assisting his duties).
| "The master is only liable where the servant is acting in the course of his employment. If he was going out of his way, against his master's implied commands, when driving on his master's business, he will make his master liable; but if he was going on a frolic of his own, without being at all on his master's business, the master will not be liable." |
| Joel v Morison [1834] EWHC KB J39 |
Additional problems have arisen when attempting to establish where detours and leave from duty take an employee out of the course of his employment. One idea which is used in this area is that an employer will only be found liable where an employee is going about his business in a standard way. For example, a minor detour would not take an employee out of the course of his employment, but a 'frolic of his own', which did not at all involve his duties, would. Journeys to and from work, and whether these are regarded as in the course of employment, were considered in Smith v Stages, where Lord Lowry
Robert Lowry, Baron Lowry
Sir Robert Lynd Erskine Lowry, Baron Lowry PC , often known as Robbie Lowry, was a Lord Chief Justice of Northern Ireland and a Lord of Appeal in Ordinary...
established several factors for determining liability. Ordinarily, employees will not be in the course of employment travelling to and from work, unless their transport is provided by their employer. However, travelling to an alternative place of work or to a workplace, during the employer's time, will be in the course of employment. Where course of employment generally begins with travelling to work has been established in the case of Compton v McClure. Here, an employer was found liable for the negligent driving of an employee, who, in an effort to clock in on time, injured another employee at the place of employment. It was stated that the 'least artificial place' to establish employment began was at the gates of the employer's factory, where they established speed limits, and supervised conduct.
Intentional torts of employees
Historically, most actions alleging vicarious liability for intentional torts failed, primarily on the grounds that no employer employs an individual to be dishonest, or to commit crimes. This was the view taken with regard to most intentional torts, with several exceptions. Morris v CW Martin & Sons LtdMorris v CW Martin & Sons Ltd
Morris v CW Martin & Sons Ltd [1966] 1 QB 716 is an English tort law case, establishing that sub-bailees are liable for the theft or negligence of their staff. Both Lord Denning and Lord Diplock rejected the idea that a contract need exist for a relationship of bailor and bailee to be found...
, for example establishes vicarious liability of thefts by an employee, where there is a non-delegable duty to keep the claimant's possessions safe. However, the scope of such liability was limited to torts committed in the course of employment, under the second limb of Salmond's course of employment test. This precluded recovery for torts committed while an employee was not involved in the furtherance of his employer's business. The importance vested in Salmond's test was not reconsidered until Lister v Hesley Hall Ltd, a case involving vicarious liability for sexual abuse. In following the ratio of the Supreme Court of Canada
Supreme Court of Canada
The Supreme Court of Canada is the highest court of Canada and is the final court of appeals in the Canadian justice system. The court grants permission to between 40 and 75 litigants each year to appeal decisions rendered by provincial, territorial and federal appellate courts, and its decisions...
in the case of Bazley v Curry, the House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
established a newer test for finding liability in cases of intentional torts; where a tort committed by an employee is closely connected to their duties, their employer may be found liable. Although of undoubted greater use to claimants, the judicial latitude given to this test has been occasionally regarded as questionable. Lord Nicholls has stated that a "lack of precision is inevitable given the infinite range of circumstances where the issue arises."
Assault
Unlike other intentional torts, which tend to be premeditatedMens rea
Mens rea is Latin for "guilty mind". In criminal law, it is viewed as one of the necessary elements of a crime. The standard common law test of criminal liability is usually expressed in the Latin phrase, actus non facit reum nisi mens sit rea, which means "the act does not make a person guilty...
, liability for assault
Assault
In law, assault is a crime causing a victim to fear violence. The term is often confused with battery, which involves physical contact. The specific meaning of assault varies between countries, but can refer to an act that causes another to apprehend immediate and personal violence, or in the more...
has been found in several cases prior to Lister v Hesley Hall Ltd. Poland v Parr & Sons involved an employee who assaulted a boy, believing him to be attempting to steal his employer's goods. Vicarious liability was imposed based on the employee's implied authority to protect his master's goods. Liability was also found where a tram
Tram
A tram is a passenger rail vehicle which runs on tracks along public urban streets and also sometimes on separate rights of way. It may also run between cities and/or towns , and/or partially grade separated even in the cities...
conductor - in his duties - pushed a passenger out a tram, after he had not paid his fare. However, assault involving personal vengeance and spite was generally not found to result in liability, as in Warren v Henlys Ltd. This represents a principal limitation of the previous position of liability: only where an act was in the course of employment could an employer be liable. Premeditation and personal motive would take an employee out of their course of employment, breaking liability. The establishment of the close connection test has produced different results in cases of intentional assault, as demonstrated in Mattis v Pollock
Mattis v Pollock
Mattis v Pollock [2003] 1 WLR 2158 is an English tort law case, establishing an employer's vicarious liability for assault, even where it may be intentional or pre-meditated...
. Here, a bouncer
Bouncer (doorman)
A bouncer is an informal term for a type of security guard employed at venues such as bars, nightclubs or concerts to provide security, check legal age, and refuse entry to a venue based on criteria such as intoxication, aggressive behavior, or attractiveness...
for a nightclub
Nightclub
A nightclub is an entertainment venue which usually operates late into the night...
was involved in a dispute with a customer. He subsequently went home and returned with a knife, stabbing the customer, resulting in serious injuries. The employer was held liable, despite the bouncer's intent on revenge, due to the close connection of the tort to the bouncer's employment and duties. It was of particular importance that the bouncer was employed to act in an aggressive and tough manner.
Theft
As noted, liability for theft has been found not primarily under the principles of course of employment, and vicarious liability, but via a non-delegable duty of employers to ensure that a third party's goods are kept safe.Morris v CW Martin & Sons Ltd
Morris v CW Martin & Sons Ltd
Morris v CW Martin & Sons Ltd [1966] 1 QB 716 is an English tort law case, establishing that sub-bailees are liable for the theft or negligence of their staff. Both Lord Denning and Lord Diplock rejected the idea that a contract need exist for a relationship of bailor and bailee to be found...
, involving an employee who stole a fur coat from a dry cleaners, saw the establishment of this principle, with Lord Denning stating:
Vicarious liability for theft has also been found due to poor selections of employees by an employer, as in Nahhas v Pier House Management. Here, the management company of a luxury block of flats employed a porter, who was an 'ex-professional thief', to manage their building. A tenant of the building entrusted him with her keys, and was subsequently robbed of expensive jewellery. The management company were found to have been negligent in hiring the porter, having not carried out sufficient checks on his background, address, or obtaining a written reference. It has been stated it is unlikely that as a general rule, where there are proper checks and systems to prevent such incidents, liability would be found; it is in the interests of society to allow rehabilitation of offenders.
Sexual assault
Until recently, it was not considered that an employer could be vicariously liable for sexual assault, despite the particular vulnerability of children, and special care that must be taken in selecting employees. The Court of Appeal held in T v North Yorkshire CC that a headmaster's sexual abuse of children on a field trip was not within the scope of his employment, a previous criteria for an employer to be found vicariously liable. This rule was reversed in the shortly following case of Lister v Hesley Hall Ltd, effectively establishing liability for sexual assault, where it is closely connected with an employee's duties. Here, a warden of a boarding house sexually abused several children over the course of three years. Initially it was held (under the precedent of T v North Yorkshire CC) that such acts could not have been in the course of his employment. However, the House of LordsHouse of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
overruled the earlier case, with Lord Steyn stating:
In overruling T v North Yorkshire CC, the Lords established that the relative closeness connecting the sexual abuse and the warden's duties established liability. It was of importance however that the warden's duties were closely linked to the abuse. The mere opportunity to abuse children was not the reason for liability; it has been suggested that if it were a groundsman who had carried out the abuse, it would not have resulted in liability.
Fraud
Employers have been responsible for the fraudulent misrepresentationsMisrepresentation in English law
Misrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...
of their employees since the mid-nineteenth century, under the decision of Barwick v English Joint Stock Bank. This liability was extended in the early 20th century, to cover fraudulent actions which were not of benefit to the employer, a previous requirement. Thereupon, the test for vicarious liability of fraud was whether it was within an employee's authority – either actual, or outwardly appearing – to carry out the fraudulent actions that he did. It was not enough that an employee merely asserted that he had supposed authority, however; the defrauded individual or company must have been assured or led to believe by the employer – or have inferred through standard dealings – that the employee in question had it.
As with other intentional torts, such liability was extended following Lister v Hesley Hall Ltd, to cover any fraud which is closely related to an employee's employment. The first case of fraud to be decided under this authority was Dubai Aluminium Co Ltd v Salaam, involving the fraud of a senior partner in a firm of solicitors. The House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
chose to extend the principal liability of employers, to cover fraudulent representations made by employees with no actual or ostensible authority to make them. Here, despite the employer having made no representations to the claimants, it was found that the close connection between the partner's fraud and his duties established liability.
Employer's indemnity
Lister v Romford Ice and Cold Storage Co created a controversial principle at common lawCommon law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
, that where an employer is found vicariously liable for an employee's actions, they are entitled to recover an indemnity
Indemnity
An indemnity is a sum paid by A to B by way of compensation for a particular loss suffered by B. The indemnitor may or may not be responsible for the loss suffered by the indemnitee...
from them, to cover such losses. The House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
accepted by a narrow margin that there may be an implied term
Implied terms in English law
Implied terms in English law refers to the practice of setting down default rules for contracts, when terms that contracting parties expressly choose run out, or setting down mandatory rules which operate to override terms that the parties may have themselves chosen...
in the contracts of employees, by which they must exercise reasonable care and skill in their work. Such principles has received both criticism and support, for various reasons. Advocacy of the indemnity features on rules of principal liability; the person to commit a tort and to cause damage should pay damages arising from it. Critics state that the recovery of an indemnity is contrary to equity, due to the general lack of wealth of employees and servants. The advent of widespread insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
of employers has led to the recovery of indemnities being widely abandoned. This is illustrated by the British Insurance Association entering into a gentlemen's agreement
Gentlemen's agreement
A gentlemen's agreement is an informal agreement between two or more parties. It may be written, oral, or simply understood as part of an unspoken agreement by convention or through mutually beneficial etiquette. The essence of a gentlemen's agreement is that it relies upon the honor of the parties...
not to utilise the rule:
"Employers' Liability Insurers agree that they will not institute a claim against the employee of an insured employer in respect of the death of or injury to a fellow-employee unless the weight of evidence clearly indicates (i) collusion or (ii) wilful misconduct on the part of the employee against whom a claim is made."
As such, indemnities are not pursued from employers except in exceptional circumstances.