Vicarious liability Flashcards
What is vicarious liability?
Liability of one party for a tort committed by another party.
- a form of secondary liability
What is strict liability in this setting?
Where a party is liable despite the absence of any fault.
What is the justification for bringing a vicarious liability claim?
a) Deep pockets
- The employer is in a better financial position than the employee to compensate a victim
- Many employers will have insurance for claims of this nature.
b) Control / supervision
- The employer exercises both control and supervision over its employees.
c) Choice of employees
- An employer may be careless in selecting negligent employees and should suffer the consequences of that.
- Vicarious liability should encourage employers to select staff carefully.
d) Benefit / burden
- An employer obtains the benefit of an employee, so it is only fair that it suffers any corresponding problem / burden caused by the employee
e) Raising standards
- Vicarious liability encourages employers to provide better training, supervision and control of employees
- it helps to maintain good standards of practice.
What 3 elements must be satisfied for vicarious liability?
a) A tort has been committed by Party A
b) Party A is an employee of Party B, or is in a relationship akin to employment with Party B
c) The tort was committed in the course of Party A’s employment / quasi-employment
What is the close connection test used for?
- An employer will be held vicariously liable for the acts of their employee if there is a ‘closeness of connection’ between the employee’s wrongful act and his employment.
- test from Lister
What is the close connection test?
- What functions or ‘fields of activities’ have been entrusted by the employer to the employee (what was the nature of his job)?
- Was there sufficient connection between the position in which he was employed and his wrongful conduct to make it just for the employer to be held liable?
Are criminal acts considered to have been committed inside or outside the course of employment?
GENERALLY, outside
- Warren v Henleys
What was the test pre 2002?
Test to see if the wrongful act was:
a) Expressly or impliedly authorised by the employer;
b) Incidental to the carrying out of the employee’s proper duties; or
c) An unauthorised way of doing something authorised by the employer.
What is the difference between contract of service and contract for services?
Contract of service
- A contract under which services are provided in an employer / employee relationship.
Contract for services
- A contract under which services are provided by an independent contractor, not in an employer / employee relationship.
Why does it matter whether or not someone is an employee?
1 - case law has been developed which explains the common law duty of care owed by employers to employees.
- A duty might still be owed by a business to other types of worker, but as a general rule the level of protection offered to employees is higher than for other workers.
- The case law which relates to employees will not automatically apply to other workers such as independent contractors.
2- An employer can be vicariously liable for torts committed by an employee
- might have to compensate a claimant where the claimant suffers from a tort committed by an employee.
- To establish vicarious liability, it is generally necessary to show an employer/employee relationship or a relationship akin to an employer/employee relationship.
How do you know if parties are in an employer/ employee relationship?
- multiple factors/ economic reality test
(Ready Mixed Concrete v Minister of Pensions) - factors to look at:
Remuneration in exchange for personal services
Mutuality of obligations
Control
Tools and equipment being provided by the employer;
Tax / PAYE treatment as an employee rather than an independent contractor;
The employee being ‘integrated’ into the organisation; and
The parties labelling the relationship as an employment relationship
Explain the ‘remuneration in exchange for personal services’ factor in determining employer/employee relationship.
- look to see if there is ‘remuneration in exchange for personal service and mutuality of obligations’.
- Remuneration in exchange for personal service means that the employee is being paid to fulfil his duties personally.
- If a worker has an unfettered right to send a substitute to do the work in his place (and the employer has no role in choosing that substitute), this cannot be an employment relationship.
Explain the ‘mutuality of obligations’ factor in determining employer/employee relationship.
- Mutuality of obligations simply means the employer is required to provide work to the employee and the employee is required to do the work.
- So where the worker is under no obligation to work, nor do the employers have any obligation to provide him with work, there is not an employer / employee relationship.
- In a ‘zero hours contract’ workers are unlikely to be deemed as employees.
Explain the ‘control’ factor in determining employer/employee relationship.
- The court will consider the amount of control that the employer exercises over the employee.
- The more control that the employer has, the more likely it will be that the other party is an employee.
Is a party carrying out their own independent business in a relationship akin to employment? Include case name.
No - the relationship will not be akin to employment
- Barclays Bank Plc v Various Claimants
