Concept of Vicarious Liability Explained with Case Laws

Introduction

Legal terms often leave us perplexed in real-world situations. Legal concepts have multiple facets and can be confusing. Nevertheless, we must be aware of these different layers and understand them thoroughly. This article seeks to simplify and explore the meaning and application of “Vicarious Liability,” a commonly encountered legal concept.

What is Vicarious Liability?

Vicarious Liability is a principle of the Law of Torts that deal with cases where one person is held liable for the wrongful acts of others.

It results from a RELATIONSHIP such as the one of a master-servant, principal-agent, independent contractor, etc., arising out of and during employment.

Why is the principle of Vicarious Liability important?

Each of us, at some point or other, must have wondered why a master should be held liable for the torts committed by his servant in doing his business even when his conduct is not blameworthy, and he has used the greatest possible care in choosing the servant. Given below are a few factors behind the Principle of Liability

Respondent superior– This principle follows the rule that lets the principal or Master be responsible for the acts ratified by him.
Damages– To give the damages to the aggrieved party and to stop the blame game between the servant and the Master.
Avoiding exploitation of the servant– Master is also held liable for the acts of the servant because many times, the masters exploit their servants by first directing the servants to do some tortious act and then firing them to avoid responsibility.
Historical reason – The status of the servant is taken from when he was treated as an enslaved person; in those times, it was regarded that the enslaved person did not have a personality of his own. Thus, it was assumed to be merged with that of his Master’s
Public policy – The Master is expected to be in a better position for who can pay the damages, and there ought to be a remedy against someone who can.
Qui facet per album facet perse– This principle means “He who does an act through another is deemed in law to do it himself.” Any act the servant does during his employment is considered done by the Master and, in principle, means that the Master has done the act.

What are the essentials of vicarious liability?

There must be a relationship of a certain kind between the wrongdoer and the person who ratified the task
The wrongful act must be related to the relationship in a certain way.
The wrong has been done within the course of employment.

Difference Between Servant and Independent Contractor

The principle of Vicarious liability encompasses the relationship between a Master and Servant and an Independent Contractor. However, there is a fine line between who is a Servant and who is an Independent Contractor. To decide this difference, there is vast jurisprudence, which has undergone several changes.

Old test to differentiate between a Servant and an Independent Contractor:

A servant is engaged under a CONTRACT OF SERVICE, whereas an independent contractor is engaged under a CONTRACT FOR SERVICES.
The employer’s liability for the wrongs committed by his servant is more onerous than his liability regarding wrongs committed by an independent contractor.
In the case of a servant, the employer directs what work the servant is to do and gives directions to control the manner of doing the work.
In the case of an independent contractor, the employer can only direct what work is to be done, but he cannot control the manner of doing the work.
In Short v J. & W. Henderson Ltd,[1] Lord Thankerton pointed out four indicia of a contract of service:
Master’s power of selection of his servant
Payment of wages or other remuneration
Master’s right to control the method of doing the work
Master’s right of suspension or dismissal.
Let us say a home cleaning company provides services by sending their people to our homes to do the cleaning. They are not our servants but the servants of that particular entity. Therefore, according to the test delineated by Lord Thankerton:
We do not have the power to select the person who is going to come and clean our house; all we can specify is what is to be cleaned, the mode of cleaning, and other details, but the power to select the person and employ him resides with the company only.
We do not pay the employee; we pay the company
We do not control their method of doing the work. They have a particular fixed method, a particular set of appliances. They come, use their machinery, and clean.
Even if we do not like their services, all we can do is complaint to the company related to the same. We do not have the power or the authority to dismiss or suspend them from their job.

Modern Test to differentiate between a Servant and an Independent Contractor:

The control test breaks down when applied to skilled and exceptionally professional work; therefore, it has not been treated as an exclusive test.
The Supreme Court in Dharangadhara Chemical Works Ltd. v. State of Saurashtra[2] laid down the following:
That the right of the Master to supervise and control the execution of the work done by the servant is a prima facie test,
The nature of control may vary from business to business and is incapable of precise definition,
The employer does not need to be proven to have exercised control over the employee’s work,
The test of control is not of universal application, and there are many contracts in which the Master could not control how the work was done.
In Montreal v. Montreal Locomotive Works Ltd,[3]Lord Wright said that, as the nature of the industry becomes complex, more complicated tests must be applied to suit the modern industry. According to him, it would be more appropriate to apply a more complex test involving the following factors- Control, ownership of the tools, chance of profit, risk of loss, control in itself is only sometimes conclusive.
Lord Denning, as Lord Justice, in Stevenson Jordan and Harrison Ltd. v. MacDonald and Evens,[4]referred to the distinction between a contract of service and a contract for services as a “troublesome question” and observed that it is almost impossible to give a precise definition of the distinction.
The Supreme Court in Silver Jubilee Tailoring House v. Chief Inspector of Shops[5]pointed out that control is an essential factor, and in many cases, it may still be the decisive factor. However, it is wrong to say that in every case, it is decisive.

Therefore, to summarize this hazy question, it can be said that a ship’s Master, a chauffeur, and a reporter on the staff of a newspaper are all employed under a contract of service, but a ship’s pilot, a taxi man, and a newspaper contributor are employed under a contract for services. ‌Because under a contract of service, a man is employed as a part of the business, and his work is done as an integral part of the business, ‌whereas under a contract for services, the work, although done for the business, is accessory to it and not integrated into it.

Vicarious Liability of Hospital Authorities:

Consistent with the control test which was earlier followed, a hospital authority was not held liable for the negligence of its staff in matters requiring professional skill but with the change in the legal position that the control test is not decisive in all cases and it breaks down when applied to skilled and professional work, a hospital authority has now been held liable for the negligence of its professional staff and the distinction earlier drawn between professional duties and ministerial or administrative duties has been disapproved
Santa Garg v. Director National Heart Institute, the Supreme Court quoted the following proposition from DENNING L.J.’s judgment in Cassidy’s case: “The hospital authority is liable for the negligence of professional men employed by the authority under contract for service as well as under contract of service. The authority owes a duty to give proper treatment-medical, surgical, nursing, and the like–and though it may delegate the performance of that duty to those who are not its servants, it remains liable if the duty be improperly or inadequately performed by its delegates and in case of independent contractors as well.”

Vicarious Liability arising out of Lending of the servant:

When the servant is lent, the following principles are followed:
There is a strong presumption that the general employer will remain the master
The burden is on the permanent employer to prove that there is a transfer of service
This burden can be discharged by proving that total and absolute control over the servant was transferred to the hirer and that the servant had expressly or impliedly consented to the transfer
A contract between the general employer and the hirer should stipulate who shall be the Master. This is not conclusive against the person injured by the tort of the servant, but it is relevant to determine the inter se liability
In Rajasthan State Road Transport Corporation v. Kailash Nath Kothari,[6]a bus and a driver were hired by the RSRT Corporation from a private owner. The bus met with an accident. In this case, the RSRTC was held liable and not the private owner because of the below-mentioned reasons:
Although the driver continued to be under the payroll of the private owner, his services and complete control were transferred to the corporation
The RSRTC was the one who DIRECTED, INSTRUCTED, and COMMANDED the driver
In this case, Justice Anand observed that if the original employer can establish that while lending the servanteffective control over him was also transferred to the hirer, the latter is held vicariously liable for the tort committed by the concerned employee during his employment. Even though the driver would continue to be on the payroll of the original owner.

Vicarious liability arising out of Lending of a chattel:

The Master is liable if he retains control of his vehicle by the presence
If the vehicle was being driven at the owner’s request by another, even if he was not present in the vehicle or had immediate control over it. In such circumstances, the driver stands as an agent of the owner.
The fact that the car was being used with the owner’s permission and the purpose for which the car was used concerned the owner are not sufficient to establish vicarious Liability
The owner would also not be liable if he had given up his right to control the vehicle
However, even when the owner is not vicariously liable under general law for the tort committed by an independent contractor or Bailee, Liability may be fastened by statute.

Vicarious Liability of Master and the Extent of Liability:

Close connection test by Salmond- If the unauthorized and wrongful act of the servant is not so connected with the authorized act as to be a mode of doing it but is an independent act, the Master is not responsible; for in such a case the servant is not acting in the course of the employment but has gone outside of it.
If a servant does an act negligently that which he /she was authorized to do carefully or does fraudulently that which he/she was authorized to do honestly or does mistakenly that which he/she was authorized to do correctly, the Master will be answerable for that negligence, fraud or mistake.

Vicarious Liability of the Master During Employment:

The expressions “course of employment,” “sphere of employment,” and “scope of employment” mean the same thing, and they imply that the matter must be looked at broadly and not by dissecting the servant’s tasks into its component activities.
The appellants in General Engineering Services Ltd. v. Kingston and Saint Andrew Corp[7]owned certain premises in Kingston, Jamaica. A fire broke out in the said premises, on which the appellants promptly informed the local fire brigade. The fire brigade took 17 minutes to reach the appellants’ premises at a distance of 1.5 miles. The average time for covering this distance was 3.5 minutes. By the time the fire brigade reached, the premises were destroyed by fire. The reason why the firemen took 17 minutes instead of 3.5 minutes to cover to cover the distance was that they were operating a ‘go slow’ policy as part of industrial action. They had driven to the premises by moving slowly forward, stopping, then moving slowly forward again, then stopping, and so on until they reached the premises. On these facts, the question was whether the respondents, as employers of the firefighters, were vicariously liable to the appellants or whether, in other words, the firefighters acted in the course of employment. Privy Council observed: “The firemen’s unauthorized and wrongful act was to prolong the time taken by the journey to the fire scene, as to ensure that they did not arrive in time to extinguish it before the building and its contents were destroyed. Their mode and manner of driving, the slow progression of stopping and starting, was not so connected with the authorized act, which is, driving to the scene of the fire as expeditiously as reasonably possible, as to be a mode of performing that act. The unauthorized and wrongful act was done not in furtherance of the employer’s business but in furtherance of the employees’ industrial dispute to bring pressure on the employers to satisfy their demands. Therefore, the respondents were not held liable
In Beard v. London General Omnibus Co.,[8] the plaintiff was injured by the negligent driving of the conductor of an omnibus, who, at the end of a journey, on his initiative and in the absence of the driver, took charge of the omnibus and drove it round through some neighboring bye-streets intending to turn it around, to be ready for the next journey. It was held that the masters were not liable for the conductor’s negligence in driving the omnibus as he was not authorized to drive the vehicle. In this case, the driver did not authorize or permit the conductor to drive the vehicle. He was not negligent in leaving the vehicle in charge of the conductor. It could not, therefore, be said that the driver was negligent in driving the vehicle. As regards the conductor, the act of driving the vehicle was outside his scope of employment, for it was an act he was not authorized to perform, so his negligence could not make the Master liable.
In contrast to the judgment mentioned above in Ricketts v. Thomas Tilling Ltd,[9] where the Master was held liable, the facts were that the conductor of an omnibus drove the omnibus with permission of the driver who was sitting beside him to turn it in the right direction for the next journey and in that process by his negligence the vehicle mounted a foot pavement and injured a person. It will be noticed that in this case, the Master’s Liability was for the negligence of the driver, whose wrongful act in permitting the conductor to drive the vehicle was an unauthorized mode of performing the authorized act of driving the vehicle for the Master’s business
Both these cases were referred to by the Supreme Court in Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt,[10]where the facts were that the owner had entrusted his car to a driver for plying it as a taxi. The driver lent the taxi to the cleaner to take it to the RTO office for a driving test. The accident happened when the cleaner was driving while giving the driving test. The driver was then not in the vehicle. It is clear from the facts that when the accident happened, the car was not used as a taxi for the owner’s business. The car was then engaged in the cleaner’s work, which had no connection with the owner’s business. In lending the car to the cleaner to take a driving test, the driver did an act that he was not employed to perform and thus clearly acted beyond the scope of his employment, which was to drive the car as a taxi. The owner was, therefore, held not liable. The result would have been the same had the driver gone for a picnic or taken the car for giving a joy ride to his friends, or had the owner himself lent the car to the driver or cleaner for the latter’s work. In all these cases, vehicle use would be outside the course and scope of employment.
Therefore, it may be said that the owner of the vehicle has been generally held liable when the driver is negligent in leaving the vehicle in such circumstances that an unauthorized person can drive it, which leads to the accident; the negligence which makes the owner liable in such cases is that of the driver. The courts also raise a presumption, which can be rebutted, that a vehicle is driven on the Master’s business and by his authorized agent or servant

Vicarious Liability of Master while returning home from employment:

Questions have very often been raised as to whether a servant while going from the place of work or returning there from acts in the course of his employment. Some general principles relevant to these questions were formulated by the House of Lords in Smith v. Stages. They are:

An employee travelling from his ordinary residence to his regular place of work, whatever the means of transport and even if it is provided by the employer, is not on duty and is not acting in the course of his employment, but if he is obliged by his contract of service to use the employer’s transport, he will normally, in the absence of an express condition to the contrary, be regarded as acting in the course of his employment while doing so.
Travelling in the employer’s time between workplaces (one of which may be the regular workplace) or in the course of a peripatetic occupation, whether accompanied by goods or tools or simply in order to reach a succession of workplaces (as an inspector of gas meters might do), will be in the course of employment.
Receipt of wages (though not receipt of a traveling allowance) will indicate that the employee is traveling in the employer’s time and for his benefit and is acting in the course of his employment, and in such an n case, the fact that the employee may have discretion as to the mode and time of traveling will not take the journey out of the course of his employment.
An employee traveling in the employer’s time from his ordinary residence to a workplace other than his regular workplace or in the course of a peripatetic occupation or to the scene of an emergency (such as fire, an accident, or mechanical breakdown of the plant) will be acting in the course of employment.
A deviation from or interruption of a journey undertaken in the course of employment (unless the deviation or interruption is merely incidental to the journey) will, for the time being (which may include an overnight interruption), take the employee out of the course of employment.
Return journeys are to be treated on the same footing as outward journeys.

Vicarious Liability of the Master when there is Implied authority to the Servant:

A servant in an emergency has an implied authority to protect his Master’s property.
In Poland v. John Parr & Sons, a carter who had handed over his wagon and was going home to his dinner struck a boy whom he suspected, wrongly but on reasonable grounds, of stealing his Master’s property. The Master was held liable for the consequences on the principle that a servant has implied authority, at least in an emergency, to protect his Master’s property.
In holding the Master liable in the abovementioned case, Justice Scruton observed that maybe the force used was excessive, but the servant was merely acting in an emergency and had implied authority for protecting his Master’s property.
However, the Master cannot be held liable if the excess may be so great or the act so outrageous as to take it out of the class.
In Hilton v. Thomas Burton (Rhodes) Ltd, four workmen were permitted to use their Master’s van to go to work on a demolition site in the country. After half a day’s work, the workmen decided to go to a cafe seven miles away for tea. When they had almost reached the cafe, they changed their minds and started to return to the site of work. On the return journey, an accident happened because of the negligence in driving the van, and one of them was killed. The Master was not held vicariously liable as the men were on a frolic of their own, and the accident did not happen in the course of employment.

Vicarious liability when the acts are Dishonest or criminal:

A master is not liable for a dishonest or criminal act of his servant where the servant merely takes the opportunity afforded by his service to commit the wrongful act.

Vicarious Liability of the State:

The State is liable vicariously for the torts committed by its servants in the course of employment.

[1] Short v J. & W. Henderson Ltd, 1945 SCHL 24

[2] Dharangadhra Chemical Works Ltd. v. State of Saurashtra, 1957 SCR 152

[3] Montreal v. Montreal Locomotive Works Ltd (1947) 1 DLR 161

[4] Stevenson Jordan and Harrison, Ltd. v. Macdonald and Evans, (1952) 1 T.L.R. 101.

[5] Silver Jubilee Tailoring House v. Chief Inspector of Shops & Establishments, (1974) 3 SCC 498

[6] Rajasthan SRTC v. Kailash Nath Kothari, (1997) 7 SCC 481

[8] A.I.R. 1943 P.C. 63.

[9] Ricketts v. Thomas Tilling Ltd. [1915] 1 K.B. 644

[10] Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt, (1966) 3 SCR 527