Vicarious liability

What you'll learn

• What vicarious liability means and why tort law uses it.
• How to decide whether the tortfeasor is an employee or “akin to an employee”.
• How to apply the Salmond test and the modern close connection test.
• How to evaluate the fairness and policy reasons behind vicarious liability.

The basic idea

The person who actually commits the tort is called the tortfeasor. In vicarious liability, the tortfeasor remains personally liable, but the claimant can also sue a more financially reliable defendant, often an employer.

This is a form of strict liability in the sense that the employer does not need to be personally at fault. The focus is on the relationship and the connection with the work.

Why does vicarious liability exist?

The main purpose is to make tort law practical and fair for claimants. Employers are often better able to pay damages, usually through insurance. It also encourages organisations to train, supervise and manage risk properly.

Courts often justify vicarious liability using the idea of enterprise risk: if a business benefits from an activity, it should also bear the risks created by that activity.

Stage 1: Is the tortfeasor an employee?

The traditional starting point is whether the tortfeasor is an employee rather than an independent contractor.

This matters because employers are usually vicariously liable for employees, but they are not usually liable for independent contractors.

The traditional tests of employment status

There is no single perfect test. The courts use several overlapping tests.

The control test

The control test asks whether the employer has the right to control what the worker does and how they do it. This older approach appears in cases such as Yewens v Noakes (1880), where a servant was described as someone subject to another’s command as to how work should be done.

This test is less useful for skilled professionals, because an employer may not control the precise technical method of their work.

The integration test

The integration test asks whether the worker is integrated into the organisation or merely accessory to it. In Stevenson, Jordan and Harrison Ltd v MacDonald and Evans (1952), the court distinguished between someone employed as part of the business and someone only providing services to it.

The multiple / economic reality test

The modern approach is the multiple test, also called the economic reality test. In Ready Mixed Concrete v Minister of Pensions (1968), the court said a contract of service requires three key features:

• the worker agrees to provide work or skill in return for payment;
• the worker agrees to be subject to a sufficient degree of control;
• the other terms of the contract are consistent with employment.

Courts may also look at who provides tools, whether tax is paid through PAYE, whether the worker can send a substitute, whether they take financial risk, and whether they work for multiple clients.

Stage 1 extended: relationships “akin to employment”

Modern cases recognise that vicarious liability can apply even where there is no classic employer-employee contract. The relationship may be akin to employment, meaning it is sufficiently similar to employment to justify imposing liability.

The major case is Various Claimants v Catholic Child Welfare Society (2012). Members of a religious institute abused children at a school. The Supreme Court held that the institute could be vicariously liable even though the relationship was not a normal employment contract.

The court considered factors including:

• the defendant is more likely to have the means to compensate the claimant;
• the tort was committed as a result of activity undertaken on behalf of the defendant;
• the activity was part of the defendant’s business or mission;
• the defendant created or increased the risk of the tort;
• the tortfeasor was under the defendant’s control.

In Cox v Ministry of Justice (2016), a prisoner working in a prison kitchen negligently injured a catering manager. The Ministry of Justice was vicariously liable because the prisoner’s work was integrated into the prison’s operation and created a risk managed by the prison.

However, the courts have also placed limits on this expansion. In Barclays Bank v Various Claimants (2020), a doctor carried out medical examinations for Barclays as an independent contractor and allegedly sexually assaulted claimants. Barclays was not vicariously liable because the doctor was genuinely in business on his own account.

Stage 2: Was the tort committed in the course of employment?

Once stage 1 is satisfied, you must decide whether the tort was sufficiently connected with the employment.

Older cases used the phrase in the course of employment. If the tort was outside employment, sometimes described as outwith the course of employment, the employer is not liable.

The Salmond test

This test is especially useful for unintentional torts, such as negligence.

For example, if a delivery driver negligently crashes while making deliveries, driving is an authorised act and the careless driving is an unauthorised way of doing it. The employer is likely liable.

But if the driver takes the van on a personal trip unrelated to work and injures someone, that is likely outside the course of employment.

Frolics and prohibited acts

A frolic of one’s own means the employee has stepped away from their work for personal reasons. In that situation, the employer is less likely to be liable.

In Hilton v Thomas Burton (Rhodes) Ltd (1961), employees took an unauthorised break and drove to a café. There was an accident. The employer was not liable because they were on a frolic of their own.

But merely doing work in a prohibited way does not automatically remove liability. In Rose v Plenty (1976), a milkman was told not to allow children to help on his round, but he did so and a child was injured. The employer was liable because the milkman was still carrying out his delivery work, although in a prohibited way.

The close connection test

The Salmond test struggled with intentional torts, especially assaults and abuse. The modern test asks whether the tort is so closely connected with the employment that it is fair and just to impose liability.

In Lister v Hesley Hall Ltd (2001), a boarding school warden sexually abused children in his care. The employer was vicariously liable because the abuse was closely connected with the duties entrusted to him.

In Dubai Aluminium v Salaam (2002), a partner in a law firm committed dishonest acts connected to legal work. The firm was liable because the wrongdoing was closely connected with the ordinary course of the firm’s business.

In Mohamud v WM Morrison Supermarkets (2016), a petrol station employee racially abused and assaulted a customer. The Supreme Court held Morrisons liable because the employee’s job involved interacting with customers, and the assault was treated as an unbroken sequence from that interaction.

However, Various Claimants v Morrisons Supermarkets (2020) shows the limit. An employee maliciously leaked payroll data as revenge against Morrisons. The Supreme Court held Morrisons was not vicariously liable because the employee was pursuing a personal vendetta; the job merely gave him the opportunity.

Putting the full answer into IRAC

For problem questions, keep your structure simple.

Issue

Has the claimant suffered a tort, and can they make the defendant liable for the tortfeasor’s act?

Rule

State the two-stage test: relevant relationship, then connection with employment. Use authorities such as Ready Mixed Concrete (1968), Catholic Child Welfare (2012), Cox (2016), Lister (2001), Mohamud (2016) and Morrisons (2020).

Application

Apply the facts carefully. Consider control, integration, economic reality, whether the role is akin to employment, and whether the tort was part of the work risk or a personal frolic.

Conclusion

Reach a clear likely outcome: “The defendant is likely / unlikely to be vicariously liable.”

AO3: evaluating vicarious liability

Vicarious liability has strong advantages. It helps injured claimants obtain compensation, especially where the individual tortfeasor has little money. It also spreads losses through insurance and encourages employers to reduce risks through training and supervision.

However, it can appear unfair because liability may be imposed without personal fault. An employer may have taken reasonable care but still be liable for an employee’s wrongful act. This is particularly controversial in intentional tort cases.

The modern “akin to employment” and “close connection” tests are flexible, which helps courts reach fair outcomes in unusual situations. But flexibility can reduce certainty. Cases such as Mohamud (2016) and Morrisons (2020) show how difficult it can be to draw the line between work-related wrongdoing and a purely personal act.

Overall, vicarious liability balances competing interests: the claimant’s need for compensation, the employer’s responsibility for enterprise risk, and the need not to make defendants insurers for every wrong connected only loosely to work.