Vicarious liability under the Tort Law

Introduction

Consider a scenario where you are driving down a busy street when a delivery truck swerves and collides with your car. It turns out that the driver was texting while driving. You’re injured, and your car is damaged. Who do you sue? The driver, of course. But what if the driver was employed by a delivery company? Could you also sue the company?

This is where the concept of vicarious liability comes into play. It is a legal doctrine that holds one person responsible for the torts committed by another. In simpler terms, it means that a party can be held liable for the wrongful acts of someone else, even if they didn’t directly cause harm. The important question arises of which relations the concept of vicarious liability applies.

Principal-Agent relationship

• Vicarious liability is a legal doctrine that holds a principal responsible for the torts committed by their agent, even if the principal didn’t directly authorize or know about the wrongful act.
• This principle is based on the Latin maxim “Qui facit per alium facit per se,” which means “he who acts through another acts himself.” The agent’s authority to act can be either express or implied, and the principal can be liable for the agent’s wrongful acts if they were committed within the scope of the agent’s employment or authority.
• For example, in Lloyd v. Grace, Smith & Co.[1], a law firm was held liable for the fraudulent actions of its managing clerk. However, in State Bank of India v. Shyama Devi[2], a bank was not held liable for the misconduct of its employees who acted outside the scope of their employment.
• Additionally, in Ormrod v. Crosville Motor Service Ltd.[3], a car owner was held liable for the negligent driving of their friend who was using the car for personal purposes. On the other hand, in Tirlok Singh v. Kailash Bharti[4], a motorcycle owner was not held liable when their younger brother, without permission, caused an accident.
• The above case laws corroborate the fact that vicarious liability arises only when the person acts without the express or implied authority of their principal. Therefore; authorization is one of the crucial aspects to determine vicarious liability.

Partners

• Partners in a firm have a principal-agent relationship. The partnership is based on the concept of mutual agency as enumerated under Section 4 of the Indian Partnership Act, 1932. Therefore, the laws governing agencies also apply to their liability.
• When a partner commits a tort while acting within the normal scope of the firm’s business, all other partners are equally liable for that tort. Each partner’s liability is both joint and several.
• In Hamlyn v. Houston & Co.[5], one partner of a firm, acting within their authority, bribed an employee of another company. This led to the employee breaching their contract and revealing confidential information. The court ruled that both partners of the firm were liable for this wrongful act, even though only one partner had directly committed it.
• Thus, in a partnership where each partner is an agent of the other, the principal-agent relationship applies and subsequently the vicarious liability of the partners is determined.

Master and Servant relationship

• When an employee(servant) commits a wrongful act while working for their employer, the employer can also be held liable. Both the employee and employer are responsible for the wrongful act.
• The employer’s liability is based on the principle of respondeat superior, which means “let the master be liable.” This principle treats the employer as if they had committed the act themselves. It also aligns with 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.”
• The injured party can sue either the employee, the employer, or both. Their liability is joint and several, meaning they can be sued together or individually. The reason for holding employers liable is that they are often better able to afford compensation and may have insurance to cover such costs. This liability applies even if the employee acted against the employer’s instructions or for their own benefit.
•  For an employer to be held liable, two conditions must be met:
  • The employee committed a wrongful act.
  • The employee committed the wrongful act while acting within the scope of their employment.

Employer’s liability in the case of independent contractors

• Generally, employers are responsible for the actions of their employees. However, employers are not typically liable for the actions of independent contractors they hire.
• In Morgan v. Incorporated Central Council[6], a visitor to a building was injured when they fell down an open lift shaft. The building owner had contracted with an independent contractor to maintain the lift. The court ruled that the building owner was not liable for the independent contractor’s negligence in failing to keep the lift safe.

Exceptions to employer’s liability in independent contractor’s case

Generally, employers are not liable for the actions of independent contractors. However, there are exceptions to this rule. Employers can be held liable for the wrongful acts of independent contractors in the following situations:

1. Authorizing or Ratifying Illegal Acts: If an employer authorizes or later approves of an illegal act performed by an independent contractor, they can be held liable as a joint tortfeasor.

2. Strict Liability: In cases of strict liability, such as those involving hazardous activities or statutory duties, employers can be liable for the actions of independent contractors, even if they exercised due care.

3. Highway Dangers: Employers are responsible for ensuring the safety of their property adjacent to public roads. If an independent contractor’s actions create a hazard on the highway, the employer can be held liable.

4. Nuisance: If an independent contractor’s actions cause a nuisance, such as withdrawing support from a neighbor’s property, the employer can be liable.

5. Breach of Employer’s Duties: Employers are responsible for fulfilling their common law duties to their employees. If an independent contractor’s actions breach these duties, the employer can be held liable.

Conclusion

Vicarious liability plays a crucial role in ensuring that parties who are indirectly responsible for wrongful acts are held accountable. This doctrine provides a safeguard for victims, allowing them to seek compensation from those who are in a better position to bear the financial burden, such as employers or partners in a firm. Whether through the principal-agent relationship, partnerships, or the master-servant dynamic, vicarious liability ensures that justice is served even when the wrongful act was not directly committed by the party being sued. However, the boundaries of this liability are carefully defined, especially when dealing with independent contractors, where exceptions apply. Ultimately, vicarious liability strikes a balance between protecting the rights of victims and ensuring fairness in attributing responsibility within legal and business relationships.

[1] (1912) A.C. 716.

[2] AIR 1978 SC 1263.

[3] (1953) 2 All E.R. 753.

[4] 1986 ACJ 757 (P & H).

[5] (1903) 1 K.B. 81.

[6] (1936) 1 All E.R. 404.