6. Vicarious Liability

Question 1

What is vicarious liability?

Answer 1

Liability of one person for the torts committed by another

Question 2

What is the test for vicarious liability?

Answer 2

1. Was the person an employee or akin to an employee?
2. Acting in the course of employment/ quasi-employment?

Question 3

In determining whether someone is an employee, what are five factors the economic reality test will consider over a purely literal interpretation of the label given to the role?

Answer 3

1. Is party carrying out the work personally or on behalf of another?
2. Does employer have control over how the work is done?
3. Which party owns the equipment?
4. Is there a uniform?
5. Who is taking the financial risk?

Question 4

In determining whether a tort was committed in the course of employment, what question will the court ask?

Answer 4

Was the tort so closely connected with the businesstask as to be carried out in the ‘course of employment’.

Close connection test is twofold;
1) what functions have been entrusted to the employee?

2) is there a sufficient connection between the position of the employer and the wrong that it would be just, fair and reasonable for the employer to be liable?

Question 5

Will negligence of an employee in carrying out their work take them outside the course of employment?

Answer 5

No

Question 6

Does the fact the tort committed by the employee was also a criminal act negate vicarious liability?

Answer 6

No

Question 7

What are the two ways an employer’s prohibition can limit an employee?

Answer 7

1. Limit the scope of employment, e.g. not allowed to drive company vans
2. Limit the manner of employment, e.g. must drive company vans within the speed limit

Question 8

Breach of what type of prohibition will take an employee outside the course of employment?

Answer 8

Breach of a prohibition limiting the scope of employment

Question 9

What determines whether a deviation from employment will take an employee outside the course of employment?

Answer 9

The degree of the deviation

Question 10

What must be true of a deviation before it will be determined to be outside the course of employment?

Answer 10

Whether the degree of the deviation could be considered to be a separate independent journey for the employee’s own purposes

Question 11

In addition to those deemed employees, who else might a person be vicariously liable for the tort of?

Answer 11

Any person with whom they have a relationship akin to employer/employee

Question 12

What three factors will the court consider in determining a relationship is akin to employer-employee, and attach the same liability as if it was?

Answer 12

1. Tort committed as a result of activity undertaken on behalf of the vicarious party
2. Tortfeaser’s activity is integral part of vicarious party’s business, and
3. Vicarious party created the risk of the harm that happened by assigning the activity to the tortfeasor

Question 13

In what two situations might an employer be personally, as opposed to vicariously, liable for a tort committed by an independent contractor?

Answer 13

1. Employer in breach of their own non-delegable duty of care, or
2. Employer is in breach of their own duty to take reasonable care in selecting a contractor

Question 14

What is required to establish dual liability?

Answer 14

• rare occasions, as general presumption is that the original employer remains vicariously liable.

Question of fact
Occurs where, for example, an employee is lent and both employers are entitled/obliged to exercise control over the employee’s actions, where ‘borrowing’ employer’s equipment is used.

Key factors
- ? - whose equipment is being used
- ? - length of time the employee is seconded for
- ? - whether the temporary employer has control or the employee retains discretion

Question 15

What is the three-step test for vicarious liability?

Answer 15

Employer will be vicariously liable for their employee’s actions where:
(1) tort has been committed;
(2) by an employee of the company
(3) during the course of employment.
- close connection test is applied.

Question 16

What are the five “incidents” of employment relationships “that make it fair, just and reasonable to impose vicarious liability”?

Answer 16

1. employer is more able to compensate (especially as it will likely be insured);
2. wrongdoing arises from activity done on behalf of the employer;
3. employee’s activity is part of the business activity of the employer;
4. the employer created the risk by employing the tortfeasor to carry out tasks that gave rise to the risk;
5. employers generally have control of their employees.