The English Law on Vicarious Liability
An employer is responsible for damage caused by the torts of his
employees acting in the course of employment. This is known as
‘vicarious liability’. Essentially, vicarious liability is where
the employer is generally substituted in terms of liability for the
employee, the employee also has liability but the resources of the
employer such as insurance makes them more financially attractive to
the claimant. The mechanism of vicarious liability is arguably the
best compromise between the needs of tort victims and the freedom of
businesses as the employer usually has insurance to cover the tort of
the employee, making it more financially viable to the employer than
directly compensating the claimant. Also, the tort victim is usually
sufficiently compensated through insurance rather than if they claimed
against the employee as the master has the ‘deepest pocket’.
However, recent developments in the law on vicarious liability not
only makes the employer liable for acts that are ‘directly’ connected
with what they are employed to do, but it is now established that an
employer may be liable for the unauthorised acts of an employee, where
those acts are ‘closely connected’ with the nature of the wrongdoer’s
employment. The principle of vicarious liability can also burden the
operation of a business by placing a disproportionate amount of
responsibility on an employer. More money needs to be spent on
training, employee’s characteristics need to be assessed and higher
costs will be passed on to the consumer.
Vicarious liability is incident only to a relationship of controlled
employment, traditionally described as that of ‘master and servant’.
This means that for the employer to be vicariously liable the employee
must be in controlled employment, not an independent contractor and be
acting in the ‘course’ of this employment. The principle of vicarious
liability is very controversial as it is quite broad, and the fact
that personal fault on behalf of the employer is not required means
that it is sometimes more difficult to attribute blame on big
companies or corporations than individuals.
However, there are many aspects of vicarious liability that make it
suitable for its use. In nearly every case the employer is in the best
position financially to compensate a claimant as they always have the
‘deepest pocket’. The whole purpose of the law of tort is to
compensate the victims, the resources in question that enable the
employer to have the ‘deepest pocket is provided through insurance.
Many employees are not worth suing, therefore without the insurance
industry the present tort system could not operate.
Vicarious liability forces the employer to continually strive for
accident prevention. If every employee was insured...