VICARIOUS LIABILITY

VICARIOUS LIABILITY: Overview, Types

BLOG/ NEWS LAW EXPLAINED Tort
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When a person commits a wrong, he is held accountable for his acts; nevertheless, his acts do not usually expose him to accountability from others. However, in some circumstances, one person may be held liable for the actions of another. Vicarious Liability is the term for this type of liability. The word vicarious comes from the Latin word “vice,” which means “in the place of.” A person is liable under Vicarious Liability in tort if the following three requirements are met:-

1. A torturous act committed by a single individual

2. There is some sort of connection between the perpetrator and the person who is being held accountable.

3. There is a link between the painful conduct and their relationship.

For example, A can be held accountable for B’s acts, but there must be some form of link between A and B, and the incorrect conduct must be tied to that relationship in some manner.

RELATIONSHIP TYPES:-

The following are some instances of different sorts of relationships:

a. Principal and Agent Relationship:-

When an agent commits a tort while fulfilling his duties as an agent, the principle bears responsibility for the act. The agent is held accountable since he committed the tort directly, but the principal is held guilty vicariously as a result of their principal-agent relationship. They are jointly and severally liable. The plaintiff can file a lawsuit against the principal or agency. The plaintiff can sue either the principal or the agent, or both.

b. Master and servant Relationship:-

The master is held vicariously responsible in this case for the tort committed by his servant while on the job. Both the master and the servant share responsibility for the wrongdoing.

c. Relationship of Partners of a firm:-

If one partner does an unlawful conduct in the course of business, all partners can be held vicariously responsible for that one bad act. They are jointly and severally liable.

I. Agent & Principal:-

When one person authorises unlawful conduct and another person carries it out, both are jointly responsible. When the principal forces the agent to commit a tort, both parties are jointly responsible. It is founded on the adage “Qui facit per alium facit per se,” which means “the principal’s act is the agent’s act.” They are jointly and severally liable. The authorization to do the action might be explicit or oblique. The principle does not usually instruct his agent to commit the illegal conduct, but when the agent does so in the course of his responsibilities as an agent, the principal is held responsible.

In State Bank of India v. Shyama Devi[1], the plaintiff’s husband sent money and checks to a friend who worked for the defendant bank so that they might be placed in the plaintiff’s account. There was no official receipt for the deposits. The money was misappropriated by a bank employee. The Supreme Court ruled that because the employee was not operating in the course of his work but in his personal role as the depositor’s friend when he perpetrated the fraud, the defendant bank could not be held responsible. In Lloyd v. Grace Smith & Co.[2], the managing clerk of a firm of lawyers was held responsible alongside the agent for defrauding a woman customer and transferring her immovable property for his own advantage while working in the regular course of business.

The principle may still be held responsible if he ratifies the agent’s conduct, but the approved act must have been performed on behalf of the principal by the agent on his own.[3] If the conduct is performed on behalf of the agent rather than the principle, the principal cannot be held responsible.

II. Master & Servant:-

When a servant commits a tort or does unlawful conduct while on the job, the master is responsible. Despite this, the servant is likewise responsible for the crime. The servant’s wrongdoing is regarded to be the master’s fault as well[4].

Because the master can be held Vicarious Liability for the servant’s wrongdoing, the plaintiff has the option of bringing one or both of them for these actions. They are jointly and severally liable. The basis for the maxim “respondent superior” (let the principal be responsible) appears to be the master’s stronger position to satisfy the claim due to his larger purse, as well as the master’s capacity to pass on the liability burden through insurance. Even if the servant went against his master’s clear instructions and did not benefit him, he is nonetheless liable.[5]

The tort must be committed by the ‘servant’ and during the ‘course of employment’ in order for the master to be held liable. A master is not liable for his servant’s carelessness or other unlawful behaviour just because it occurs while the servant is working on his master’s business; it must occur in the course of that activity in order to be considered a part of it and not merely coincidental with it.[6]

The master’s culpability is in addition to that of his servant, but in rare cases, he may be responsible alone, such as when the servant is shielded from action by a specific regulation. In addition, the contemporary legal tendency is to hold the master responsible for activities that do not technically fit within the scope of the job.[7]

III. Partners:-

The connection between a firm’s partners is similar to that between a principal and an agency. In the case of their liability, the rule of agency law applies. When a partner commits a tort in the course of the firm’s activity, all of the other partners are responsible to the same amount as the guilty partner.[8]

In Hamlyn v. Houston & Co.[9], one of the defendant’s two partners, acting within the general extent of his power as a partner, bribed the plaintiff’s clerk and caused him to violate his contract with his employer (plaintiff) by disclosing company secrets. Only one of the firm’s partners was found to be responsible for the unlawful conduct (causing breach of contract) performed by the other.

Vicarious Liability Is Required:-

The following are the reasons why Vicarious Liability is imposed on them, including the real wrongdoer:

a. More Money: In the cases of Master-Servant, Employer-Employee, and Principal-Agent, it is assumed that the former has “deeper pockets.” In comparison to the latter, he is financially more stable to deal with the responsibility.

b. Method of Prevention: This also serves as a deterrent to any future wrongdoing. Because the employer is equally responsible, he should attempt to encourage his staff to work fairly and produce excellent outcomes.

c. Shared Liability: It is also recognized that if a servant is performing his master’s task and commits a tort while doing so, his master should face the consequences of his actions. It also lowers the likelihood of servants being exploited by their owners.

d. Party to Blame: Vicarious Liability allows plaintiffs to bring a lawsuit on behalf of either one or both of them, eliminating the dispute and uncertainty they had to deal with while establishing who was truly responsible.

Conclusion:-

It can be observed that Vicarious Liability is a legal precaution taken by legislators to safeguard the interests of people who are not in authority as well as those who are offended. It allows plaintiffs to bring a lawsuit against any one or both of the parties involved, saving time in the decision-making process. It aids those servants, agents, or workers who may be being used as a pawn by their superiors and are being held accountable incorrectly. Because of Vicarious Liability, supervisors are less likely to simply pass the blame to others in order to protect themselves. Also, the extension of Vicarious Liability from a civil law concept to one that may be applied in criminal law makes it easier for decision-makers to avoid the blame game and punish those who are responsible.

Examples:-

a. A, B, and C are partners. By giving misleading information about their company, ‘B’ attempted to strike a transaction with another party. The activities of ‘B’ are unlawful and criminal, yet under vicarious responsibility, all partners are held equally accountable for his conduct.

b. ‘S’ is ‘T’s’ servant, and while doing an errand for his master, ‘S’ hit ‘P’ by mistake while driving, causing significant injuries to ‘P’. In this instance, ‘T’ will be held responsible for the accident, together with ‘S.’

c. A buddy of an agent named ‘A’ sent him money. In the bank ‘P,’ ‘A’ works as a cashier. The money is misplaced by ‘A.’ Because the harm was not done in the course of employment, ‘P’ will not be held responsible for the conduct of their agent ‘A.’


[1] AIR 1978 SC 1263

[2] (1012) AC 716

[3] Eastern Construction Co. v. National rust Co., (1914) AC 197.

[4] Dr. R.K. Bangia, Law of torts, 78, (23rd edition, 2013), Allahabad Law agency.

[5] Limpus v. London General Omnibus Co. (1862) 1 H. &c. 525.

[6] Sitaram v. Santanuprasad, AIR 1966 SC 1697

[7] Pushpabai v. Rajnit G&P  Co. AIR 1977 SC 1735, p1744

[8] Indian Partnership Act, 1932, Sec. 25

[9] (1903) 1 KB 81

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