Vicarious Liability

Vicarious Liability: (only master- servant relation dealt in this article)

Vicarious liability is one of the most important part of torts which is basically concerned with holding the master responsible for the wrongful acts of the servant done in the course of employment

PRINCIPLES:

1. We need to remember that tort law has evolved from various judgements given by the courts. The reason why master was held liable for the servant’s wrongful acts is because in various cases it was found that the servant did not have enough resources to compensate the plaintiff. In this case the very purpose of “damages” i.e restoration to the position before the wrongful act, was defeated.
2. The courts then decided to apply two very important principles to fix liability in such cases. The first is “qui facit per alium facit per se” meaning he who acts through another is deemed to have acted himself. The servant’s act in the course of employment are generally( I use ”generally” because of the recent developments in vicarious liability-I’ve explained later on) for the master’s benefit and hence it is only fair that he be held liable
3. The other principle is “respondent superior”, which means let the principal be liable for reasons I’ve just mentioned

ESSENTIALS OF VICARIOUS LIABILITY:

There are basically two conditions to be fulfilled for the master to be liable:

1. The person so charged should be a “servant”
2. The wrongful act should be in the “course of employment”

Who is a servant?

For a person to be deemed servant in the eyes of law it is necessary that he fills some basic conditions:

1. The hire and fire test- Basically his duration of employment is as per the will of the employer
2. The direction and control test. This test is quite screwed up because there are numerous interpretation of “direction” and “control” but in its essence it can be helpful

Course of employment:

And now for the bitch, the slippery slope- what can be construed as course of employment? Well to answer that I’ll basically divide the wrongful acts of the servant into what is under “course of employment” and what is not.

Wrongful acts under the course of employment:

Basically covers two classes of activities:

1. wrongful acts authorized by the master
2. authorized acts done in a wrongful manner (please make sure the difference in the two sentences absolutely clear)

Acts of negligence by the servant: when the servant in performing some duty allotted to him does so in a manner which results in a breach of that duty and causes damage to the plaintiff.

Case law 1: Limpus vs. London Omnibus and Co.

In this case the driver of the bus in order to overtake another bus was driving in a very rash and negligent manner and hence ended up injuring the plaintiff. The catch in this case is such a tendency was known to the employer and he had prohibited the driver from doing so. Decide.

Case law 2: A driver employed by company “A”, dealing with petrol tankers, goes to the petrol station for filing petrol in the tanker. While the petrol is getting filled the driver S, lights up a cigarette and negligently throws the matchstick around causing a nearby petrol tank to burst and causes irreparable loss to the petrol station. The petrol station sues company “A”. Will the suit sustain? Decide

(Hint: this has something to do with my usage of the word “generally” earlier on)

Fraud by the servant: when unknown to the master the servant is executing his authorised act by committing some fraud.

Case law 3: Lloyd vs. Grace Smith & co

The plaintiff approached the defendant company to help her self off some properties owned by her as the real estate prices were quite high. The company directs her to an employee, who claims to have got a buyer and makes her sign a sale deed which unknown to her was actually a gift deed transferring the properties in favour of the employee. Decide whether master is liable.

Theft and mistake by the servant:

Let me give you examples to explain these:

Theft: for example when you give something for dry cleaning to a shop and one of the workers there steals it, then the shop owner can be made vicariously liable.

Mistake: for example the owner is a party organizer and tells the servant to arrange the coke. Now the servant picks up a bottle from the grocery which has brown liquid and believing it to be coke he hands it around in the party. Somebody in the party is allergic to alchoholic drinks and develops a medical condition. The master here becomes vicariously liable for the mistake of the servant

Delegation of duties by a servant:

If a servant has been authorised by the master to do a certain act and the servant in performing that either solicits help of another or completely gives charge to somebody else, the master can be held liable if any damage is caused by this delegation. The rationale over here is the work if completed successfully would have ultimately benefitted the master.

Case law 4: Ricketts v. Thomas Tilling Ltd.

The driver who had been authorised to drive the bus, feels tired and asks the conductor to drive the bus for some time. The conductor while driving the bus, does so quite negligently and hurts a pedestrian X. X brings a suit against the bus company. Will he succeed? Decide.

Acts not in the course of employment

Only when the act so done is of the nature that it cannot be related to the duty that the master had sent for the servant or an activity which had been “expressly prohibited”, only then will it count as not being in the course of employment

Case law 5: State Bank of India v. Shyama Devi

In this case a person a person “A” had opened an account with bank “z”. He had a friend who worked for this bank and so instead of going to the bank to deposit money he used to give the money deposit to his friend “B” to deposit in the bank and “A” obtained no receipt for the same. “B” took advantage of this and kept the money for himself. When such discrepancies were noticed by A he decides to file a suit. Guide him as to against whom should he file the suit.

Effect of express prohibition

If a servant acts in defiance of express prohibition of a certain act by the master, then the master cannot be held liable. A simple warning by the master to the servant or general guidelines cannot be construed as being express prohibition. The master should have gone out of the ordinary way to prohibit the servant from doing that wrongful act.

Case law 6: Twine v. Bean Expresses Ltd.

Kareena was the owner of a travel agency and had put up two notices on all her vehicles, one that no unauthorised person is allowed to take a lift and the other that the driver Katrina was expressly prohibited from doing so. Despite this Katrina gives left to Priyanka, who as a result of Katrina’s negligence dies in the accident so caused. Priyanka’s heirs decide to sue Kareena for this. Will they succeed?

When the work is not for which servant was employed

This can best be explained with some case laws:

Case law 7:

Salman is the servant of Amir. Salman before reporting to work at Amir’s house goes to a tea shop. There he sees his arch-rival Shahrukh and calls him a “thieving scumbag” and also accuses him of misappropriate behaviour. Shahrukh decides to file a suit against Salman only. Advise him whether he should file a case against Amir as well.

Case law 8: Beard v. London general omnibus & co.

A was the driver of a bus owned by Z. A went for lunch to some restaurant and during this time the conductor S decides to reverse the bus so that they could be ready to go when A comes back. While doing so he negligently hits a passer-by D. Help D to decide who he should sue.(Please note very carefully the difference between the facts of this case and case law 4)

Servants lend to others

When a servant is lent out to another person then the master who still controls the activities of the servant and not just merely directs his actions will be the one who is liable. Mostly it is the actual master who is held liable and not the person to whom the servant has been lent temporarily. This rule applies unless the permanent master can prove that the servant was completely in the control of the temporary master and he could not have controlled the servants action.

Case law 9: Mersey Docks & Harbour board v. Coggins & Griffith

Company G had hired a crane from company I along with the crane driver. While transferring goods the crane driver lost control and the goods fell on a passer-by Q who was seriously injured. Who should Q sue?

Giving lift to strangers:

Position in England

In England if the driver of a car is prohibited by the owner to strictly not give lifts to strangers and the driver disobeying the order of the master does so then any suit against the master will fail. Compensation can be claimed only against the servant and the master in such a case cannot be made vicariously liable.

Position in India

However such a rule is not applicable in India where a driver disobeying verbal orders of the master gives lift to a stranger the master can still be held liable.

Solutions to case laws:

case law 1: Clearly the servant has acted negligently and the master then becomes vicariously liable. if you get confused by the prohibition part just remember the prohibition is not express enough

case law 2: Though the smoking had nothing to do with the task of the servant it is just a wrongful way of doing an authorized activity. the clue about general was to make you realise that the wrongful act needn’t if done correctly benefit the master.

case law 3: the master in this case is clearly liable as the wrongful act was in the course of employment and a wrongful way of doing an authorised activity

case law 4: By a clear application of the principle of wrongful delegation, it is quite conclusive that the master is liable. Hence X will succeed

case law 5: B’s act was not in the course of employment as he was receiving money from A only in a personal capacity and not as a clerk with the bank. hence, A can file a suit against B only and not the bank.

case law 6: the suit will fail. Kareena had through her two notices expressly prohibited Katrina from giving a lift. If Katrina still does so and causes an accident then Kareena cannot be made vicariously liable for it.

case law 7: Salman’s act of defaming Sharukh was in no way related to his employment. Hence he should be advised not to file a suit against Amir.

Case law 8: it was not the conductor’s job to reverse the bus nor had he been asked by the driver to do so( answer would have been different if this was the case). Hence the wrongful act is outside the purview of employment. Thus, only S can be made liable

Case law 9: though company G was using the crane they had no control over how the crane driver was going to use the crane. This was still with the company I. Hence, company I will be made liable