Vicarious liability

Vicarious liability is a form of a 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 because, unlike contributory infringement, knowledge is not an element of vicarious liability.[1] The law has developed the view that some relationships by their nature require the person who engages others to accept responsibility for the wrongdoing of those others. The most important such relationship for practical purposes is that of employer and employee [2]

Employers' liability

Employers are vicariously liable, under the respondeat superior doctrine, for negligent acts or omissions by their employees in the course of employment (sometimes referred to as 'scope and course of employment').[3] To determine whether the employer is liable, the difference between an independent contractor and an employee is to be drawn. In order to be vicariously liable, there must be a requisite relationship between the defendant and the tortfeasor, which could be examined by three tests: Control test, Organisation test, and Sufficient relationship test. An employer may be held liable under principles of vicarious liability if an employee does an authorized act in an unauthorized way.

Employers may also be liable under the common law principle represented in the Latin phrase, qui facit per alium facit per se (one who acts through another acts in one's own interests). That 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.

In Australia, the 'sufficient relationship' test, entailing the balancing of several factors such as skill levels required in the job, pay schemes, and degree of control granted to the worker, has been the favoured approach.[4] For an act to be considered within the course of employment, it must either be authorized or be so connected with an authorized act that it can be considered a mode, though an improper mode, of performing it.[5]

Courts sometimes distinguish between an employee's "detour" vs. "a frolic of their own". 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, such as stopping to buy a beverage or use an automated teller machine while running a work-related errand, 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.[6]

Principals' liability

The owner of an automobile can be held vicariously liable for negligence committed by a person to whom the car has been lent, 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 abolished with respect to car leasing and rental in all 50 states.[7]

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-delegable 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's objecting to the repossession or resisting 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.[8] However, notably, a breach of the peace will invariably constitute a criminal misdemeanor. Criminal law imparts separate and distinct liability upon each actor considered a person under the law, and therefore a corporation and the corporation's employee may both be charged with having committed the exact same crime, in addition to any civil liability for which the law imposes.

Parental liability

In the United States, the question of parental responsibility generally follows the common law principle that a parent is not civilly liable for injuries resulting from a child's negligence merely because of the parent-child relationship.[9]

When a child causes an injury, parents may be held liable for their own negligent acts, such as failure to properly supervise a child, or failure to keep a dangerous instrument such as a handgun outside the reach of their children. Many states have also passed laws that impose some liability on parents for the intentional wrongful acts committed by their minor children.[10][9]

Liability of corporations in tort

In English law, 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 frauds 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.

Employees' continued liability and indemnity

A common misconception involves the liability of the employee for tortious acts committed within the scope and authority of their employment.[11] Although the employer is liable under respondeat superior for the employee's conduct, the employee, too, remains jointly liable for the harm caused. As the American Law Institute's Restatement of the Law of Agency, Third § 7.01 states,

An agent is subject to liability to a third party harmed by the agent’s tortious conduct. Unless an applicable statute provides otherwise, an actor remains subject to liability although the actor acts as an agent or an employee, with actual or apparent authority, or within the scope of employment.

Every American state follows this same rule.[12]

The question of indemnification arises when either solely the employee or solely the employer is sued. If only the employee is sued, then that employee may seek indemnification from the employer if the conduct was within the course and scope of their employment. If only the employer is sued, then the employer can attempt to avoid liability by claiming the employee's conduct was outside of the scope of the employee's authority, but the employer generally cannot sue the employee to recover indemnification for the employee's torts. For an example of a court confirming an employer's right to sue an employee for indemnification, see the case of Lister v Romford Ice and Cold Storage Co Ltd.[13]

Ecclesiastical corporations

In the 2003 decision Doe v. Bennett, 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.[14]

See also

Notes

  1. ^ "Religious Tech. Center v. Netcom On-Line Comm., 907 F. Supp. 1361 (N.D. Cal 1995)". Google Scholar. Google. Retrieved 6 September 2017. citing 3 Nimmer on Copyrihgt § 12.04(A)(1), at 12-70] (1995)
  2. ^ Quill, Eoin (2014). Torts in Ireland. Dublin 12: Gill & Macmillan. p. 506.
  3. ^ Sykes, Alan O. (January 1988). "The Boundaries of Vicarious Liability: An Economic Analysis of the Scope of Employment Rule and Related Legal Doctrines". Harvard Law Review. 101 (3): 563–609. JSTOR 1341141.
  4. ^ Hollis v Vabu [2001] HCA 44, (2001) 207 CLR 21, High Court (Australia).
  5. ^ Deatons Pty Ltd v Flew [1949] HCA 60, (1949) 79 CLR 370, High Court (Australia).
  6. ^ Hilton v. Thomas Burton (Rhodes) Ltd. [1961] 1 W.L.R. 705.
  7. ^ Abrams, Jim (19 December 2005). "Federal Law Puts Brakes on Vicarious Liability for Auto Rental Firms". Wells Media Group, Inc. Insurance Journal. Retrieved 6 September 2017.
  8. ^ "MBank El Paso, NA v. Sanchez, 836 SW 2d 151 (1992)". Google Scholar. Google. Retrieved 6 September 2017.
  9. ^ a b Freer, Alice B. (1964). "Parental Libality for the Torts of Children". Kentucky Law Journal: 254. Retrieved 6 September 2017.
  10. ^ "Parental Liability for Damages Caused by Their Children". Office of Legislative Research. Connecticut General Assembly. 4 February 2011. Retrieved 6 September 2017.
  11. ^ Larson, Aaron. "Principals, Agents, and Tort Liability". ExpertLaw. Retrieved 6 September 2017.
  12. ^ Peebles, K.A. (2011). "Negligent hiring and the information age: How state legislatures can save employers from inevitable liability". William & Mary Law Review. 53: 1397. Retrieved 6 September 2017.
  13. ^ "Lister v. the Romford Ice and Cold Storage Co. Ltd". Internet Archive. Retrieved 6 September 2017.
  14. ^ Your Name (this will appear with your post). "Vicarious Conclusion". Canadianunderwriter.ca. Retrieved 2013-10-05.

References

External links

Accounting networks and associations

Accounting networks and associations are professional services networks whose principal purpose is to provide members resources to assist the clients around the world and hence reduce the uncertainty by bringing together a greater number of resources to work on a problem. The networks and associations operate independently of the independent members. The largest accounting networks are known as the Big Four.

Bazley v Curry

Bazley v Curry, [1999] 2 SCR 534 is a Supreme Court of Canada decision on the topic of vicarious liability where the Court held that a non-profit organization may be held vicariously liable in tort law for sexual misconduct by one of its employees. The decision has widely influenced jurisprudence on vicarious liability outside of Canada.

Contributory copyright infringement

Contributory copyright infringement is a way of imposing secondary liability for infringement of a copyright. It is a means by which a person may be held liable for copyright infringement even though he or she did not directly engage in the infringing activity. In the United States, the Copyright Act does not itself impose liability for contributory infringement expressly. It is one of the two forms of secondary liability apart from 'vicarious liability'.

Contributory infringement is understood to be a form of infringement in which a person is not directly violating a copyright but, induces or authorises another person to directly infringe the copyright.

This doctrine is a development of general tort law and is an extension of the principle in tort law that in addition to the tortfeasor, anyone who contributed to the tort should also be held liable.

Corporate manslaughter

Corporate manslaughter is a crime in several jurisdictions, including England and Wales and Hong Kong. It enables a corporation to be punished and censured for culpable conduct that leads to a person's death. This extends beyond any compensation that might be awarded in civil litigation or any criminal prosecution of an individual (including an employee or contractor). The Corporate Manslaughter and Corporate Homicide Act 2007 came into effect in the UK on 6 April 2008.

Dubai Aluminium Co Ltd v Salaam

Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48 is an English vicarious liability case, concerning also breach of trust and dishonest assistance.

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 the torts of their employees, and not for those of independent contractors. However, a non-delegable duty may be imposed on an employer where they contract for inherently dangerous activities to be undertaken.

Joel v Morison

Joel v Morison [1834] EWHC KB J39 is a case in English tort law concerning the scope of vicarious liability of an employer for the acts of his employee.

Legal liability

In law, liable means "responsible or answerable in law; legally obligated." Legal liability concerns both civil law and criminal law and can arise from various areas of law, such as contracts, torts, taxes, or fines given by government agencies. The claimant is the one who seeks to establish, or prove, liability. Claimants can prove liability through a myriad of different theories, known as theories of liability. Which theories of liability are available in a given case depends on nature of the law in question. For example, in case involving a contractual dispute, one available theory of liability is breach of contract; or in the tort context, negligence, negligence per se, respondeat superior, vicarious liability, strict liability, or intentional conduct are all valid theories of liability.

Each theory of liability has certain conditions, or elements, that must be proven by the claimant before liability will be established. For example, the theory of negligence requires the claimant to prove that (1) the defendant had a duty; (2) the defendant breached that duty; (3) the defendant's breach caused the injury; and (4) that injury resulted in recoverable damages. Theories of liability can also be created by legislation. For example, under English law, with the passing of the Theft Act 1978, it is an offense to evade a liability dishonestly. Payment of damages usually resolves the liability. A given liability may be covered by insurance. In general, however, insurance providers only cover liabilities arising from negligent torts rather than intentional wrongs or breach of contract.

In commercial law, limited liability is a business form that shields its owners from certain types of liability and that amount a given owner will be liable for. A limited liability form separates the owner(s) from the business. This means that when a business is found liable in case, the owners are not themselves liable; rather, the business is. Thus, only the funds or property the owner(s) have invested into the business are subject to that liability. If, for example, a limited liability business goes bankrupt, then the owner(s) will not lose unrelated assets such as a personal residence (assuming they do not give personal guarantees). This is the standard model for larger businesses, in which a shareholder will only lose the amount invested (in the form of stock value decreasing). (For an explanation, see business entity.) There is an exception to this rule that allows a claimant to go after the owners of a limited liability business where the owners have engaged in conduct that justifies the claimant's recovery from the owners. This is known as "piercing the veil."

Manufacturer's liability, a legal concept in most countries, reflects the fact that producers have a responsibility not to sell a defective product. See product liability.

Economists use the term "legal liability" to describe the legal-bound obligation to pay debts.

Lister v Hesley Hall Ltd

Lister v Hesley Hall Ltd [2001] UKHL 22 is an English tort law case, creating a new precedent for finding where an employer is vicariously liable for the torts of their employees. Prior to this decision, it had been found that sexual abuse by employees of others could not be seen as in the course of their employment, precluding recovery from the employer. The majority of the House of Lords however overruled the Court of Appeal, and these earlier decisions, establishing that the "relative closeness" connecting the tort and the nature of an individual's employment established liability.

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. Previously, judges had been unwilling to impose liability where assaults were motivated by revenge or vengeance; it was established however that following the decision of Lister v Hesley Hall Ltd, that where an assault is closely linked to the duties of an employee, the employer should be held vicariously liable.

Negligence in employment

Negligence in employment encompasses several causes of action in tort law that arise where an employer is held liable for the tortious acts of an employee because that employer was negligent in providing the employee with the ability to engage in a particular act. Four basic causes of action may arise from such a scenario: negligent hiring, negligent retention, negligent supervision and negligent training. While negligence in employment may overlap with negligent entrustment and vicarious liability, the concepts are distinct grounds of liability.

Negligent entrustment

Negligent entrustment is a cause of action in tort law that arises where one party (the entrustor) is held liable for negligence because they negligently provided another party (the entrustee) with a dangerous instrumentality, and the entrusted party caused injury to a third party with that instrumentality. The cause of action most frequently arises where one person allows another to drive their automobile.

Respondeat superior

Respondeat superior (Latin: "let the master answer"; plural: respondeant superiores) is a doctrine that a party is responsible for (has vicarious liability for) acts of their agents. For example, in the United States, there are circumstances when an employer is liable for acts of employees performed within the course of their employment. This rule is also called the master-servant rule, recognized in both common law and civil law jurisdictions.In a broader scope, respondeat superior is based upon the concept of vicarious liability.

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. Vicarious liability was tenuously found under John William Salmond's test for course of employment, 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.

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, but for matters relating to copyright, this has solely been a product of case law developments. In other words, courts, rather than Congress, have been the primary developers of theories and policies concerning secondary liability.

Turberville v Stampe

Turberville v Stampe (1697) 91 ER 1072 is an English tort law case concerning vicarious liability, also known as the respondeat superior doctrine.

Vicarious liability (criminal)

The legal principle of vicarious liability applies to hold one person liable for the actions of another when engaged in some form of joint or collective activity.

Vicarious liability in English law

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. The leading case is now the Supreme Court decision in Catholic Child Welfare Society v Institute of the Brothers of the Christian Schools, which emphasised the concept of "enterprise risk".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.

Yewens v Noakes

Yewens v Noakes (1881) 6 QBD 530, was an English tax law case which addressed the question of the division between master and servant.

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