Vicarious Liability

Question 1

The two branches of vicarious liability

Answer 1

1) first branch holds employers liable for the torts of their employees when those torts are committed within the scope of employment.
2) second brach governs the attribution of torts committed by independent contractors acting on behalf of their principals.

Question 2

Steps for analyzing vicarious liability

Answer 2

1) identify the underlying tort
2) go through the scope of employment test
- is the agent an employee (scope of control test), apparent agent (holding out test), or independent contractor?
- if the agent is an employee, was the tortious conduct within the scope of employment?
- if the agent is an apparent agent, was the tortious conduct within the scope of apparent authority?
- if the agent is an independent contractor, is an exception to the rule of non-liability applicable?

Question 3

Step one: Identifying the underlying tort

Answer 3

For either branch of vicarious liability, there must be an underlying tort committed by the employee or independent contractor before vicarious liability kicks in. Therefore, it is important to first identify what the underlying tort is and determine liability.

Question 4

Step two: The Scope of Employment Test

Answer 4

The second step in analyzing whether an employer is liable for the tortious conduct of an employee is to determine the scope of employment test. Courts apply several different tests (sometimes more than one one), including:
1) the benefits test
2) the substantial control test
3) the in the service of test
4) the motive test
5) the fairness test

Question 5

The “benefits” test for scope of employment

Answer 5

this test asks: did the employer stand to benefit from the conduct of the employee?

Question 6

The “substantial control” test

Answer 6

this test asks: Was the employer exercising substantial control over the employee’s actions at the time of the accident?

Question 7

The “in the service of” test

Answer 7

This test asks: was the employee’s conduct directly in the service of the employer at the time of the accident?

Question 8

The “motive” test

Answer 8

This test asks: was that conduct motivated by a desire to confer a benefit on the employer?

Question 9

The “fairness” test

Answer 9

this test asks: is it fair (fairness calls for assigning liability to employers when doing so will make the enterprise that benefits from the risk bear its burden) for the enterprise to disclaim the actions of its employees?

Question 10

Policy Factors that help to determine whether scope of employment tests should be interpreted broadly or narrowly

Answer 10

1) accident prevention: calls for assigning liability to employers to induce them to change their activity to reduce accidents.
2) allocative efficiency: calls for assigning liability to employers when they are in the best position (cheapest cost avoider) to make the choice between imposing a risk and eliminating it.
3) loss-spreading: calls for assigning liability to employers when they are in the best position to insure against the class of accidents that includes this accident.
4) fairness: calls for assigning liability to employers when doing so will make the enterprise that benefits from the risk bear its burden.

Question 11

Intentional Torts and Scope of Employment

Answer 11

Search case concluded that a violent attack may fall within the scope of a perpetrator’s employment if there is evidence that the assault grew out of a job-related controversy.

Question 12

What is an independent contractor?

Answer 12

An independent contractor is an agent whose physical conduct the principal does not have the right to control. If the employer’s right to control the activities of the employee extends to a manner in which a task is to be performed, then the employee is not an independent contractor.

Question 13

Independent contractor vs employee

Answer 13

The employee surrenders to the employer the right to direct the details of the work, in exchange for receiving a wage whereas the independent contractor is committed to provided a specified output and the principal monitors the contractor’s performance by inspecting that output.

Question 14

General Rule of Non-Liability for Torts of Independent Contractors

Answer 14

Principals are not liable for the torts that independent contractors commit while working on their behalf.

Question 15

Exceptions to the general rule for independent contractors

Answer 15

The three general categories of the exceptions are:
1) negligence in the selection of an independent contractor
2) non-delegable duties
3) work that is abnormally, peculiarly, or inherently dangerous

Question 16

Ostensible or Apparent Agency

Answer 16

this imposes vicarious liability based on the reasonable perceptions of potential victims. It is often employed in a hospital setting, where health care providers may be employed by separate companies. Apparently Authority depends upon the third party’s perception of the agent’s authority. This may be based upon written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to have the act done on their behalf by the apparent agent.

Question 17

Third Restatement of Agency states the Apparent Agency Test as:

Answer 17

Apparent authority is the power held by an agent or other actor to affect a principal’s legal relations with third parties when a third party reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations.

Question 18

Purpose of apparent agency

Answer 18

like vicarious liability, it prevents a principal from enjoying the benefits of an agent’s activities while avoiding the burdens.

Question 19

Peculiar Risks

Answer 19

are risks that are likely to create a heightened risk of physical harm to third parties unless special precautions are taken. These risks are known to principals but are not comparably evident to independent contractors

Question 20

Abnormally Dangerous Risks

Answer 20

is a risk that is especially great no matter where the activity is conducted or how carefully it is conducted. Posner states that the reason for holding the principal strictly liable is to induce the principal to “consider the possibility of preventing some accidents by curtailing the activity or even eliminating it altogether.

Question 21

Inherent Risks

Answer 21

are dangers that exist because of the particular circumstances under which an activity must be conducted (e.g., doing structural steel repair work in an occupied building). The unusual circumstances under which the activity must be conducted are a feature of the principal’s activity.