Law of Tort - Vicarious Liability

Definition and key test of liability

Vicarious liability concerns the imposition of liability upon one person, A, regardless of fault by A,[1] for:

(i) the tort committed by B against C; where

(ii) A stands in a relationship with B which can be classed as

(a) one of employment, or

(b) one in which B is important to and integrated into the enterprise carried on by A, such that their relationship is sufficiently akin to an employment relationship to make that relationship capable of giving rise to vicarious liability; and

(iii) the tort committed by B is so closely connected to the relationship between A and B that it is fair and just to impose vicarious liability.

Note that proof of a tort by B is essential before these two questions need to be addressed.

Foundational authorities.

The leading cases on point (i) **Armes v Nottinghamshire CC[2017] and *Cox v Ministry of Justice[2016]

The leading case on point (ii) is ***Mohamud v WM Morrison Supermarkets Plc[2016]

I. A TORT BY B AGAINST C, FOR WHICH A CAN BE VICARIOUSLY LIABLE

Credit Lyonnais Bank Nederland NV (now Generale Bank Nederland NV) v Export Credits Guarantee Department [2000]

Facts: Corrupt employee fraudulently obtains money from credit bank. In fact most of the tortious behaviour was committed by someone on the outside. All tort conditions must be satisfied. All tortious acts must be made during relationship of A and B.

(shove in case in exam)

With the assistance of Mr Pillai, a corrupt employee of the ECG department, Mr Chong fraudulently obtained money from the claimant bank by selling to it bills of exchange with forged buyer acceptances in relation to fictitious export contracts, supported by guarantees issued by the department (that (fictional) foreign buyers would pay against the bills) which the employee, Mr Pillai, had authorised (when properly operated, the guarantee scheme was aimed at encouraging overseas trade by allowing UK exporters to sell guaranteed bills of exchange to their bankers to obtain immediate finance).

Mr Chong disappeared and Mr Pillai died, so the defrauded bank sued the department instead. The claim failed. Although the employee had knowledge of the scheme to defraud the bank, his issue of the guarantees, which was within the course of his employment, was not in itself a wrongful act, and the acts which deceived the bank were primarily carried out by Mr Chong, and were outside the course of the employee's employment.

II. A RELATIONSHIP CAPABLE OF GIVING RISE TO VICARIOUS LIABILITY

(A) Relationship of employer and employee: the classic qualifying relationship

What constitutes employment?

Contract of service (employment, wages) vs contract for services (contractors, hiring)

Ex: in-house accountant vs a yearly hired accountant

(i) Control test: one case setting it out, and another in which control was influential

Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947]

Facts: A harbour authority hires out a crane with an operator to a firm of stevedores. Conditions stated that the crane operator would be the servant of the hirer-stevedores. By the operator's negligence, a third party was injured and sued the harbour authority and the stevedores for damages.

Held: that the harbour authority was liable because it had not done enough to shift responsibility on to the stevedores for the exercise by the operator of his discretion as to how to operate the crane which the harbour authority had vested in him. This was so, even though the accident occurred at a time when the stevedores were able to control what cargo was moved (but not, of course, precisely how the crane controls were used to make that happen).

WHPT Housing Association v Secretary of State for Social Services [1981]

Facts: An architect worked on a freelance basis. He worked for the housing association. He kept no office hours but worked twenty-eight hours per week in the office. He did allocated work and attended meetings. But he received no holiday or sick pay and he included VAT in his claims for payment. Further, no income tax or national insurance deductions were made from his payments by the association.

Held, on the question whether the architect could be included as a permanent member of staff for the purposes of certain statutory employment rights: not an employee. The lack of control over Mr Lowe's working hours was determinative for the court on the facts, even though the control test was acknowledged not to be the be all and end all.

(ii) The organisation test (OVERRULED)

Bank voor Handel en Scheepvaart NV v Slatford [1953]

- This test is criticised in the first case under the next heading.

Person is part of an organisation

(iii) Multiple test (takes hold over control test)

Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968]

Contract of service:

i. Master and servant: There needs to be consideration (in form of a wage)

ii. Control of master over servant

iii. other provisions of contract

"I must now consider what is meant by a contract of service.

A contract of service exists if these three conditions are fulfilled:

(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master.

(ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done.

(iii) The other provisions of the contract are consistent with its being a contract of service."

Market Investigations Ltd v Minister of Social Security [1969]

Facts: Definition of an employee under a 'contract of service'.

A woman was engaged by a market research company to act as an interviewer on a part-time basis. For each particular survey, she would conduct interviews in exchange for payment. She was required to work for a certain number of days at a time during each occasion, follow a comprehensive 'Interviewer's Guide' and comply with other contractual terms.

Issue

The question arose as to whether extent and degree of control exercised by the company over the woman qualified her as an "employed person" under a contract of service for the purposes of the National Insurance Act 1965.

Held

Firstly, the Court stipulated that employment is determined by the degree and extent of control that a company exercises over the person's performance of the task to show 'a master and servant' relationship. Secondly, the Court held that in order to distinguish between a contract 'of service' and 'for services,' the test to be applied is: whether the person is engaging the services "as a person in business on his own account." Considering the surrounding circumstances and contractual provisions, if the answer to the question is "no," the person is an employee under a contract 'of service.' On the facts of the case, the Court placed weight on the way in which the company exercised control over, for example, the technique of interviewing, subjects of the interviews, content of the interviews, questionnaires, forms and other details concerning the performance of the task, and the way in which the woman was not conducting the business on her own account but on behalf of the company. Accordingly, the Court held that the woman was an employee of the company under a 'contract of service.'

Control held to be sufficiently high → use multiple factors

(iv) The modern status of control in deciding whether the relationship between A and B can give rise to the vicarious liability of A for B's tort against C

**Armes v Nottinghamshire CC [2017]

"But it is not realistic in modern life to look for a right to direct how an employee should perform his duties as a necessary element in the relationship between employer and employee; nor indeed was it in times gone by, if one thinks for example of the degree of control which the owner of a ship could have exercised over the master while the ship was at sea. Accordingly, as Lord Phillips PSC stated, the significance of control is that the defendant can direct what the tortfeasor does, not how he does it."

(B) Particular types of employment

(i) Hospital staff and other professionals in the health sector

Cassidy v Ministry of Health [1951]

Liability for misdiagnosis. Hospitals employ medical professionals to do their best and must be responsible for failure of employees to do so. Hospital workers are subject to the multiple test.

Facts: The claimant was a patient at a hospital run by the defendant who required routine treatment to set the bones in his wrist. Due to negligence on the part of one of the doctors, the operation caused his fingers to become stiff. The claimant sued the defendant in the tort of negligence on the basis of vicarious liability.

Issue

If negligence is proven against a primary tortfeasor, it is sometimes possible to hold their employer liable under the doctrine of vicarious liability. This doctrine holds that an employer is legally responsible for torts committed by their 'servants' in the course of their employment. The equivalent term under modern law would be 'employee'. At the time, the dominant test for determining whether the primary tortfeasor was a servant was whether the defendant had control over how they performed their services.

The defendant argued that the doctor responsible for the negligence was not one of their servants, as they had no control over how he performed his job.

The issue was the meaning of 'servant' in the context of vicarious liability.

Held

The Court of Appeal held that the defendant was vicariously liable.

The fact that the worker engages in specialised and technical work for which he is specially qualified does not mean that he is necessarily not a servant. The Court held that a person is a servant of the defendant if he was chosen for the job by the defendant and is fully integrated into the defendant's organisation.

In this case, the doctors were appointed to the hospital by the defendant and not chosen by the patient, and were fully integrated into the hospital. They were therefore the defendant's servants.

(ii) The vicarious liability of persons for the torts of professionals generally with whom they stand in a relationship capable of giving rise to vicarious liability

Phelps v Hillingdon London Borough Council [2001]

Here it is enough to note that the possibility that A can be liable for the tort of B against C even where B is a professional person and A isn't.

Facts: In that case, an educational psychologist negligently misdiagnosed learning disabilities and the local authority was vicariously liable for that tort. Ignore the fact that the vicariously liable person in that case was a local authority.

(C) Borrowed employees and dual vicarious liability

(i) Borrowed employees: traditionally assumed that it was necessary to choose one vicariously liable party

Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947]

Need to fully shift control to one employer

Reluctance to see that liability was shifted to stevedors → no adequate shift to crane operator, harbour operator remained liable, stevedors escaped

Only one group can have VL, when an employee is borrowed from another group.

(ii) Dual vicarious liability: no longer absolutely necessary to choose which supposed 'employer' is liable

**Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005]

Facts: Sprinklers triggered, serious flood in factory

Individual can be part of multiple organizations, which makes both organizations liable.

CA: seems perfectly logical that dual liability can exist. Looking for a situation that the employee in question is as much a part of both businesses → integration test of the employee with borrower and lender

*Various Claimants v Catholic Child Welfare Society [2012]

SC criticised Mersey docks approach saying it was making VL impossible in practice

(D) Relationships akin to employment

Recently included because

E v English Province of Our Lady of Charity [2012]

Facts: Bishop and priests relationship sufficiently close to that of employment even in absence of contract

Vicariously liable for priest's actions (sexual abuse of child)

Gruesome facts of the case should not obscure the development of the law that point towards employment by bishop (church)

→ confirmed in subsequent litigations

yes, VL because they selected the priest.

*Various Claimants v Catholic Child Welfare Society [2012]

Facts: Institute of the Brothers of the Christian Schools (an unincorporated association) and managers of residential boys' school with managers (diocesan bodies) shared vicarious liability for sexual abuse by volunteer brothers mandatorily sent to teach there by institute, but remaining reliant on institute for support, and bound to it by their onerous vows (chastity, poverty, obedience) and rules of conduct.

**Cox v Ministry of Justice [2016] UKSC 10, [2016]

Facts: Rehabilitation in prison, D dropped bag of rice, hurting C.

Not employment but close enough (sufficiently integrated). Rehabilitation is one of the reasons staff is there but without them prison wouldn't run. Yes VL.

***Armes v Nottinghamshire CC [2017] UKSC 60, [2018]

Facts: Local authority vicariously liable for sexual abuse by foster parents.

Assault of children in foster care

"Applying the approach adopted in Cox's case [2016] to the circumstances of the present case, and considering first the relationship between the activity of the foster parents and that of the local authority, the relevant activity of the local authority was the care of children who had been committed to their care. They were under a statutory duty to care for such children. In order to discharge that duty, in so far as it involved the provision of accommodation, maintenance and daily care, they recruited, selected and trained persons who were willing to accommodate, maintain and look after the children in their homes as foster parents, and inspected their homes before any placement was made. They paid allowances to the foster parents in order to defray their expenses, and provided the foster parents with such equipment as might be necessary. They also provided in-service training. The foster parents were expected to carry out their fostering in co-operation with local authority social workers, with whom they had at least monthly meetings. The local authority involved the foster parents in their decision-making concerning the children, and required them to co-operate with arrangements for contact with the children's families. In the light of these circumstances, the foster parents with which the present case is concerned cannot be regarded as carrying on an independent business of their own: such a characterisation would fail to reflect many important aspects of the arrangements."

Frederick v Positive Solutions (Financial Services) Ltd [2018]

Facts: Agent (not employee) used Bank's online portal to abuse position and get money. SC can say no to potential cases.

The second defendant financial services company - PS - was not liable for the fraud of one of its agents, Warren.

Warren was a financial adviser and agent of the second defendant. He had a property development scheme of his own. He persuaded people to finance that scheme by re-mortgaging their homes. To process these transactions, he used a bank's online portal, available to him only by virtue of his position with the second defendants. Warren lied on the applications for finance in order to obtain funds which would not otherwise have been advanced. Much of the money was paid to Warren and lost in his scheme. One of the claims by the investors in respect of the money lent against their property and lost was that the second defendant was vicariously liable for Warren's actions. Warren had not personally dealt with the investors, and they had had no communication with the second defendant, either.

Judge says 3 stage test in Caparo was not satisfied because there was no proper relationship, therefore no VL. Company was non-complicit in his use of the portal.

"At most, the respondent provided the opportunity for Warren to commit the fraud or wrongdoing by giving him access to the portal. It is well-established that merely providing the opportunity for wrongdoing is not sufficient without more to give rise to vicarious liability, absent a holding out of someone in Warren's position as having authority to act for the defendant sought to be made vicariously liable"

IV. A CLOSE CONNECTION BETWEEN THE RELATIONSHIP LINKING D2 AND D1, AND THE TORT COMMITTED BY D1 AGAINST CLAIMANT

(A) The key test (close connection test)

**Mohamud v Wm Morrison Supermarkets Plc [2016]

Facts: A supermarket was vicariously liable when a petrol kiosk attendant responded to an inquiry about printing off some documents with racist abuse and then a serious physical attack on the garage forecourt, despite his supervisor's protestations. Motive of the tortfeasor is irrelevant to vicarious liability.

Connection between wrong committed by attendant and their actual job → close connection was satisfied

'In the simplest terms, the court has to consider two matters. The first question is what functions or "field of activities" have been entrusted by the employer to the employee, or, in everyday language, what was the nature of his job. [...]

Secondly, the court must decide whether there was sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable under the principle of social justice which goes back to Holt CJ

→ unbroken sequence of events, D did nothing completely outside his duties

(B) Examples of the close connection test in operation, and key older cases which remain good law

*Lister v Hesley Hall Ltd [2001] UKHL 22, [2002]

Facts: Limited company which owned a school and attached boarding house was vicariously liable for the acts of a warden of the boarding house when he sexually abused boys resident at the school.

The fact that a person commits an intentional or criminal act does not mean that another person cannot be vicariously liable for that act.

Yes, connection between tort and employer.

Brink's Global Services Inc v Igrox Ltd [2010]

Facts: Brink's provided worldwide door to door carriage of goods services. Igrox provided fumigation services of container good for carriage overseas. A bank hired Brink's for the carriage of silver bars from London to India. Brink's instructed its container company, Hyundai, to arrange for fumigation, and corresponding instructions were given by Hyundai to Thamesport, the port authority, which engaged Igrox for that purpose. One of Igrox's employees stole fifteen silver bars from the container.

Held that Igrox was vicariously liable for the theft of its employee, which was a risk reasonably incidental to the purpose for which he was employed.

Mattis v Pollock (t/a Flamingos Nightclub) [2003]

Nightclub vicariously liable for bouncer's knife attack on guest in the street outside the club: in line with what the bouncer was there to do.

Facts: Cranston was a nightclub bouncer. He refused entry to a person to whom he had refused entry on a previous occasion. His view was questioned and he attacked two members of the group with what was probably a knuckle duster or a cosh. The claimant tried to break up this attack. Other persons present reacted. Cranston was hit several times with a bottle, and chased from the club by a group (the claimant was not among those persons).

Cranston escaped to his flat, where he picked up a knife. He returned to find a group including the claimant assembled outside the club (everyone had decided to make their respective ways home). The group split up but Mr Mattis stood where he was. Cranston stabbed him in the lower back and rendered him paraplegic by severing his spinal cord, telling Mr Mattis that he would teach him not to mess him around, in an obvious reference to his intervention.

Cranston had, to the knowledge of his employer, a history of behaving in a threatening manner towards guests at the club. Pollock specifically wanted someone who could be relied upon to intimidate customers.

Yes, VL.

In summary: Nightclub held to be VL for bouncer who stabbed a guest after him forbidding them from entering was questioned

Everyone reacted, piling in on the bouncer and chasing him away. He came back with a knife

→ club specifically wanted someone intimidating, as evidenced and therefore close connection satisfied and club liable

Key test is quite policy based

Attorney General of the British Virgin Islands v Hartwell [2004]

Facts: Policeman found partner with another and shot them. He had left his post in order to do so→ test not satisfied. No VL.

In [Hartwell] a police officer left the island on which he was on duty and went to a bar on a neighbouring island where his partner worked as a waitress. Having found her there with another man, he was seized by a fit of jealous rage and fired four shots at her using a revolver which he had improperly taken from the police station's strongbox to which he had access in the course of his duties.

A tourist who was in the bar at the time was seriously injured. He claimed damages for negligence against the Attorney General representing the Government of the British Virgin Islands.

The claimant's primary case was that the Government was negligent in allowing the officer, who was still at the probationary stage of his career, access to firearms, but before the Privy Council he also argued that the Attorney General was vicariously liable for the officer's actions.

Applying the test laid down in [Lister v Hesley Hall Ltd [2001], the Privy Council held that, since the officer had abandoned his post and embarked on a vendetta of his own, he was not acting in the course of his employment when he fired the shots. No VL.

Bernard v Attorney General of Jamaica [2004]

Policeman shot use of public telephone, was deemed within the scope of his job and test satisfied → very wide nature of test for VL demonstrated

Facts: Mr Bernard was using a public telephone when he was approached by a police officer who demanded it from him so that he could use it. Mr Bernard refused to let go and an altercation followed in the course of which the officer pulled out his service revolver and fired at him, causing him injuries. The officer subsequently arrested him for assaulting a police officer. Mr Bernard sought to hold the Attorney General on behalf of the Crown vicariously liable for the wrongful act of the officer. Vicarious liability is established.

Not necessarily about key test directly, but still good law:

*Smith v Stages [1989]

Traveling to and from work in a car or other mode of transport is not sufficiently connected→ does not render employer VL

However, where travel is part of employee's job or it is necessary in job, employer can be VL

Facts: Employees sent to carry out work at a power plant, drove there in Stages' car, and worked very long hours through the day and night towards the end of their week's detachment in order to finish up in time. They had an accident on the way back. The employer had set aside wages and expenses for travel to and from the power plant.

Held that the employees' travel was within the course of their employment so that their employer could be vicariously liable (to the passenger employee) for the driver employee's negligent decision to drive home after such a long period working with so little rest.

Williams v A&W Hemphill Ltd (1966)

Facts: Deviation from given route when driving

Going back to Glasgow from boy camp, boys asked to pass by girls' camp. Deviated by 25 miles and did not suffice while still within purpose of getting boys back to Glasgow, close connection not broken.

Lords mentioned a significant deviation would count, but here it was not the case, so there was VL.

Mat:

A person may deviate from their normal duties and commit a tort for which someone is still vicariously liable. Whether the deviation is significant enough to break the link between the tort and the relationship between D1 and D2 is a question of degree.

Twenty-five mile detour by driver did not take him out of the course of his employment when he negligently crashed the lorry carrying the boys.

Rose v Plenty [1976]

Facts: Milk man expressly prohibited by employers from engaging youngsters in delivery, but employs a small boy, who falls off milk float.

Held: contributory negligence between boy and milkman BUT milk delivery company could have VL for milkman's share because he was still performing his work duties (not eg giving lift to school).

Mat:

An employee who acts contrary to an express prohibition of her employer's may still render her employer vicariously liable for a tort committed whilst the prohibition is being ignored.

The defendant milk roundsman was expressly prohibited by his employers from engaging young persons to assist in the performance of his duties. Nonetheless the defendant engaged the 13-year-old plaintiff to assist in the collection and delivery of milk bottles. The plaintiff was injured whilst riding on the back of the milk float due to the defendant's driving. The employer was liable for the 75% responsibility borne by the milkman.

Nota bene - of this case, Clerk & Lindsell on Torts, observes: 'The servant was still performing the duties for which he was employed, albeit breaching an instruction not to take on any unauthorised passengers. He merely continued his job of delivering milk in an unauthorised manner. Had he taken the boy up on his float for a lift to school the result would have been quite different. Of course, a driver, although acting outside the course of his employment in giving a prohibited lift, could still be acting within the course of his employment in relation to, for example, another road user harmed through his negligence.'