BLOG- Vicarious Liability

 Introduction

‘It is entirely appropriate that all businesses be responsible for the torts of their employees’.

Tort law in India is a relatively new common law development supplemented by codifying statutes including statutes governing damages. While India generally follows the UK approach, there are certain differences which may indicate judicial activism, hence creating controversy. Tort is the breach of some duty independent of a contract which has caused damage to the plaintiff giving rise to a civil cause of action and for which remedy is available. If there is no remedy it cannot be called a tort because the essence of the tort is to give remedy to the person who has suffered injury.

Liability for Torts

In India immunity of the Government for the tortious acts of its servants, based on the remnants of old feudalistic notion that the king cannot be sued I his own courts without his consent ever existed. The doctrine of sovereign immunity, a common law rule, which existed in England, also found a place in the United States before 1946 Mr. Justice Holmes in 1907 declared for a unanimous Supreme Court:
“A sovereign is exempt from suit not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends.”

Vicarious Liability of the State

Here what we mean is essentially the vicarious liability of the State for the torts committed by its servants in the exercise of their duty. The State would of course not be liable if the acts done were necessary for protection life or property. Acts such as judicial or quasi-judicial decisions done in good faith would not invite any liability. There are specific statutory provisions which the administrative authorities from liability. Such protection, however, would not extent malicious act. The burden of proving that an act was malicious would lie on the person who assails the administrative action. The principles of law of torts would apply in the determination of what is a tort and all the defences available to the respondent in a suit for tort would be available to the public servant also. If after all this, a public servant is proved to have been guilty of a tort like negligence, should the State, as his employer is liable?

In India, Article 300 declares that the Government of India or a of a State may be sued for the tortious acts of its servants in the same manner as the Dominion of India and the corresponding provinces could have been sued or have been sued before the commencement of the present Constitution. This rule is, however, subject to any such law made by the Parliament or the State Legislature.

Vicarious Liability

Generally, a person is liable for his own wrongful acts and one does not incur any liability for the acts done by others. In certain cases, however, vicarious liability, that is the liability of one person for the act of another person, may arise. In order that the liability of A for the act done by B can arise, it is necessary that there should be certain kind of relationship between A and B, and the wrongful act should be, in certain way, connected with that relationship.

The common examples of such a liability are:

1. Liability of the principal for the tort of his agent;
2. Liability of partners of each other’s tort;
3. Liability of the master for the tort of his servant.

So Vicarious Liability deals with cases where one person is liable for the acts of others. In the field of Torts it is considered to be an exception to the general rule that a person is liable for his own acts only. It is based on the principle of qui facit per se per alium facit per se, which means, “He who does an act through another is deemed in law to do it himself”. So in a case of vicarious liability both the person at whose behest the act is done as well as the person who does the act are liable. Thus, Employers are vicariously liable for the torts of their employees that are committed during the course of employment.

Reasons for vicarious liability

Several reasons have been advanced as a justification for the imposition of vicarious liability:

1. The master has the ‘deepest pockets’. The wealth of a defendant, or the fact that he has access to resources via insurance, has in some cases had an unconscious influence on the development of legal principles.
2. Vicarious liability encourages accident prevention by giving an employer a financial interest in encouraging his employees to take care for the safety of others.
3. As the employer makes a profit from the activities of his employees, he should also bear any losses that those activities cause.

In the words of Lord Chelmsford: “It has long been established by law that a master is liable to third persons for any injury or damage done through the negligence or unskilfulness of a servant acting in his master’s employ. The reason of this is, that every act which is done by the servant in the course of his duty is regarded as done by his master’s order, and, consequently, it is the same as if it were master’s own act”.

Constituents Of Vicarious Liability

• There must be a relationship of a certain kind.
• The wrongful act must be related to the relationship in a certain way.
• The wrong has been done within the course of employment.

Servant and Independent Contractor
Servant and independent contractor are both employed to do some work of the employer but there is a difference in the legal relationship which the employer has with them. A servant is engaged under a contract of services whereas an independent contractor is engaged under a contract for services. The liability of the employer for the wrongs committed by his servant is more onerous than his liability in respect of wrongs committed by an independent contractor. If a servant does a wrongful act in the course of his employment, the master is liable for it. The servant, of course, is also liable. The wrongful act of the servant is deemed to be the act of the master as well. “The doctrine of liability of the master for act of his servant is based on the maxim respondent superior, which means ‘let the principal be liable’ and it puts the master in the same position as he if had done the act himself. It also derives validity from the maxim qui facit per alium facit per se, which means ‘he who does an act through another is deemed in law to do it himself’.” Since for the wrong done by the servant, the master can also be made liable vicariously, the plaintiff has a choice to bring an action against either or both of them. Their liability is joint and several as they are considered to be joint tort feasors. The reason for the maxim respondent superior seems to be the better position of the master to meet the claim because of his larger pocket and also ability to pass on the burden of liability through insurance. The liability arises even though the servant acted against the express instruction, and for no benefit of his master.

For the liability of the master to arise, the following two essentials are to be present:
(1) The tort was committed by the servant.
(2) The servant committed the tort in the course of his employment.

A servant is a person employed by another to do work under the direction and control of his master. As a general rule, master is liable for the tort of his servant but he is not liable for the tort of an independent contractor. It, therefore, becomes essential to distinguish between the two.

A servant is an agent who is subject to the control and supervision of his employer regarding the manner in which the work is to be done. An independent contractor is not subject to any such control. He undertakes to do certain work and regarding the manner in which the work is to be done. He is his own master and exercises his own discretion. And independent contractor is one “who undertakes to produce a given result, but so that in the actual exclusion of the work, he is not under the order or control of the person for whom he does it, and may use his own discretion in things not specified beforehand.”

Example:
My car driver is my servant. If he negligently knocks down X, I will be liable for that. But if he hire a taxi for going to railway station and a taxi driver negligently hits X, I will not be liable towards X because the driver is not my servant but only an independent contractor.

The taxi driver alone will be liable for that.

Vicarious Liability in Medical Care

In a medical setting, a hospital or doctor can be held vicariously liable for a claim based on the acts of one of its employees. This includes the actions of its physicians, nurses, laboratory personnel, imaging and other technicians, CNAs, administrative employees, and other staff members. If a physician or other healthcare provider is considered an independent contractor of a hospital, vicarious liability may not apply, though laws on this vary by state.

Example of Vicarious Liability in Medical Care

A few weeks after John had abdominal surgery at his local hospital, he felt he had perhaps broken a rib, and went to the Emergency Department. The x-ray showed that a surgical clamp had been left inside John’s abdominal cavity, which required immediate surgery for removal. John can sue the original surgeon for medical malpractice, but he can also sue the hospital, which holds vicarious liability for the actions of its physicians.

Other Types of Vicarious Liability

The most common “other” types of vicarious liability include principal liability and parental liability.

• Principal Liability

An automobile owner can be held vicariously liable if he lends his vehicle to another person, and that person causes damage or injury through negligence. This generally only applies if the driver was using the car in order to perform a task for the owner of the vehicle.

Example of Principal Liability

Robert, who recently had surgery to repair a broken leg, lends his car to Jane so that she can run personal errands for him. As Jane is pulling out of the parking lot at Robert’s bank, she hits another vehicle. Robert may be held vicariously liable for Jane’s accident.

If, on the other hand, Jane kept Robert’s car to use while he is laid up, and she hit another car while driving to the grocery store, for her own needs, Robert is not likely to held vicariously liable. Simply lending a car to someone does not expose the owner to liability for the driver’s actions. The driver would need to be acting in the service of the owner.

• Parental Liability

In the United States, parent liability is an issue that is poorly understood and evolving. Parents can be held directly liable for their own actions as related to their children, such as allowing a child to drive, or leaving a loaded gun within a child’s reach. If the child in either circumstance caused harm by taking advantage of the opportunity left before them by the parent, the parent can be held liable.

In some jurisdictions, parents may be held vicariously liable for negligent acts committed by their child, if the parent failed to provide adequate supervision.

Traditional View: Test Of Control

A master is one who not only prescribes to the workmen the end of his work but directs or at any moments may direct the means also; retains the power of controlling the work.

The traditional mode of stating the distinction is that in case of servant, the employer in addition to directing what work the servant is to do, can also give directions to control the manner of doing the work; but in case of an independent contractor, the employer can only direct what work is to be done but he cannot control the manner of doing work. This was stated by MCKARDIE, J. by taking the writings of Pollock on Torts in a case of Performing Right Society Ltd. v Mitchell, etc. Ltd.

In Short V.J. & W. Henderson Ltd. LORD THANKERTON pointed out four indicia of a contract of service:

1. Master’s power of selection of his servant;
2. Payment of wages or other remunerations;
3. Master’s right to control the method of doing the work, and
4. Master’s right of suspension or dismissal.

The important characteristic according to this analysis is the master’s power of control for other indicia may also be found in a contract for services.

This was the traditional test. In Collins v Hertfordshire HILBERY J said; “the distinction between a contract for services and a contract of service can be summarised in this way: In one case the master can order or require what is to be done, while in other cases he can not only order or require what is to be done but how it shall be done.”

Modern View: Control Test Not Exclusive

1. The Control Test
   The test of control as traditionally formulated was based upon the social conditions of an earlier age and “was well suited to govern relationship like those between a farmer and an agricultural labourer (prior to agriculture mechanisation), a craftsman and a journeyman, a householder and a domestic servant and even a factory owner and an unskilled hand”. The control test bricks down when applied to skill and particularly professional work and, therefore, in recent years it has not been treated as an exclusive test.

The Supreme Court in Dharangadhara Chemical Works Ltd. v State of Saurashtra laid down that the existence of the right in the master to supervise and control the execution of the work done by the servant is a prima facie test, that the nature of control may vary from business to business and is by its nature incapable of any precise definition, that it is not necessary that the employer should be proved to have exercised control over the work of the employee, that the test of control is not of universal application and that there are many contracts in which the master could not control the manner in which work was done. The English Courts have also recognised that the control test is no longer decisive.

B. The nature of the employment test
                                                               One accepted view is that people who have a contract of service (an employment contract) are employees, but people who have a contract for services (a service contract) are independent contractors. In Ready Mixed Concrete v Minister of Pensions and National Insurance, MACKEMA J., said that three conditions are to be fulfilled for contract of service:

1. Servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in the performance of some service for his master;
2. He agrees expressly or impliedly that in the performance of that service he will be subject to others control in a sufficient degree to make that other master;
3. The other provisions of the contract are consistent with its being a contract of service.
4. The ‘Integral Part Of The Business’ Test
   LORD DENNING, as LORD JUSTICE, in Stevenson Jordan and Harrison Ltd. v Macdonald andEvens, referred to the distinction between a contract of service and a contract for services as a “troublesome question” and observed: “it is almost impossible to give a precise definition of the distinction. It is often easy to recognise a contract of service when you see it, but difficult to say wherein the difference lies. 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. One feature which seems to run through the instances is that, 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, his work, although done for the business, is not integrated into it but it is only accessory to it.”
5. Allocation Of Financial Risk/ The Economic Reality Test/ Multiple Test
   In Montreal v Montreal Locomotive Works Ltd. LORD WRIGHT said that in the more complex condition ofmodern industry, more complicated test have often to be applied. According to him, it would be more appropriate to apply a complex test involving
6. Control;
7. Ownership of the tools;
8. Chance of profit;
9. Risk of loss; and Control in itself is not always conclusive.

In a later case Market Investigation Ltd. v Minister of Social Security, COOKE J. referred to these factors and said that the fundamental test was; “Is the person who has engaged himself to perform these services performing them as a person in business on his own account?” If the answer is yes, it is a contract for services; if no, it is a contract of service. There is no exhaustive list of considerations relevant to determining this question, and no strict rules about the relative weight the various considerations should carry in a particular case.

Liability For Independent Contractors

In Alcock v Wraith, NEILL LJ stated: where someone employs an independent contractor to do work on his behalf he is not in the ordinary way responsible for any tort committed by the contractor in the course of the execution of the work.

The main exceptions to the principle fall into the following categories:

1. Cases where the employer is under some statutory duty which he cannot delegate.
2. Cases involving the withdrawal of support from neighboring land.
3. Cases involving the escape of fire.
4. Cases involving the escape of substances, such as explosives, which have been brought on the land and which are likely to do damage if they escape; liability will attach under the rule in Rylands v Fletcher.
5. Cases involving operations on the highways which may cause danger to persons using the highway.
6. Cases involving non-delegable duties of an employer for the safety of his employees.
7. Cases involving extra-hazardous acts.

Judicial Pronouncements

• Salsbury v Woodland, (1969) 3 All ER 863.

Mr. Woodland wanted a hawthorn tree cut down. The tree was 25 feet high and stood 28 feet from the road, and running across the garden diagonally was a pair of telephone wires. Mr. Woodland engaged Terence Coombe to cut the tree down and he did so negligently. The tree hit the telephone wires which landed in the roadway. The claimant intended to coil up the wires, but on seeing the third defendant, Mr. Waugh, approaching too fast in his Morris Cooper, he flung himself to the ground to avoid being hit by the wires (which would have whipped around being struck by the car). The claimant had a tumour on his spine and the falling to the ground dislodged this and caused damage to the claimant. It was held on allowing the appeal by Mr. Woodland that he was not liable for the negligence of his independent contractor and the driver was also held partly responsible as he was driving too fast.

• Patel Roadways And Another vs Manish Chhotalal Thakkar And …,2001 ACJ 180, ILR 2000 KAR 3286, 2000 (6) KarLJ 216

The Supreme Court in Minu B. Mehta and Another v Balkrishna Ramchandra Nayan and Another, reiterated that even in claim applications under Motor Vehicles Act, to make the owner and insurer of a vehicle liable to pay compensation, it is necessary to prove negligence on the part of the driver. The relevant observations of the Supreme Court are:

“The liability of the owner of the car to compensate the victim in a car accident due to the negligent driving of his servant is based on the Law of Torts. Regarding the negligence of the servant, the owner is made liable on the basis of vicarious liability. Before the master could be made liable it is necessary to prove that the servant was acting during the course of his employment and that he was negligent…

“What remains to be considered is the contention that the non-joinder of the Driver is fatal to the action. The owner’s liability, in this case, is a vicarious liability of the Master for the tortious act of the servant in the course of employment. They are both in the position of Joint tortfeasors and their liability is joint and several. The position is too well-settled to admit of doubt. However, out of deference to the learned Counsel who seemed to set some store by this contention, we might refer to some authorities.

“Who, then, are joint tortfeasors? One way of answering the question is to see whether the cause of action against each tortfeasor is the same. If the same evidence would support an action against each, they are joint tortfeasors. They will be jointly liable for a tort which they both commit…” (Vide Para 201 at page 114) Where damage is caused to a person by two or more wrongdoers they may either be joint tortfeasors or independent tortfeasors. A case of vicarious liability is a case of joint tortfeasors. On the question as to the nature of the vicarious liability of the master for the tortious act of the servant, Salmond on “Torts” (18th Edition, 1981) states:

“A master is jointly and severally liable for any tort committed by his servant while acting in the course of employment. This is by far the most important of the various cases in which vicarious responsibility or vicarious liability is recognized by the law. Vicarious liability means that one person takes or supplies the place of another so far as liability is concerned”, (vide Para 172 at page 425) (emphasis supplied) In Jones v Manchester Corporation, Denning L.J. said:

“In all these cases it is of importance to remember that when a master employs a servant to do something for him, he is responsible for the servant’s conduct as if it were his own. If the servant commits a tort in the course of his employment, then the master is a tortfeasor as well as the servant. The master is never treated as an innocent party… “.

Conclusion

Vicarious Liability deals with cases where one person is liable for the acts of others. In the field of Torts it is considered to be an exception to the general rule that a person is liable for his own acts only. It is based on the principle of qui facit per se per alium facit per se, which means, “He who does an act through another is deemed in law to do it himself”. So in a case of vicarious liability both the person at whose behest the act is done as well as the person who does the act are liable. Thus, Employers are vicariously liable for the torts of their employees that are committed during the course of employment. In order that the liability of A for the act done by B can arise, it is necessary that there should be certain kind of relationship between A and B, and the wrongful act should be, in a certain way, connected with that relationship. So a master is liable for the acts of his servant if the act is done in the course of employment. But where someone employs an independent contractor to do work on his behalf he is not in the ordinary way responsible for any tort committed by the contractor in the course of the execution of the work except in certain exceptional cases as dealt above.

So the servant and independent contractor are under contract of service and contract for service respectively. The traditional view to distinguish between the two was the control test exclusively. But in modern scenario, this is not sufficient test as there is no single test. The significant outcome can be achieved only by balancing different factors with the help of different tests like The nature of the employment test, the ‘integral part of the business’ test, Allocation of financial risk/ the economic reality test/ multiple tests along with the control test.

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