Vicarious liability reconsidered
Vicarious liability is of considerable importance in the occupational field. This month we take a point of departure to discuss its development
This form of liability is said to exist when one person is held accountable for the wrongful acts of another. Essentially, vicarious liability deals with the question of when the employer can be liable for the wrongful acts of its employees.
If, for example, an employee negligently causes a motor accident resulting in an injury to a third party, can the employer be held liable to pay compensation? Further, if the employee commits a crime, say speeding, can the employer be held to be criminally liable? In other words, can both civil and criminal liability be imputed vicariously?
If we go back far enough, in the past there was only one form of liability. No distinction was drawn between civil and criminal liability. About 150 years ago, civil liability began to develop. Today three forms of liability exist. The fundamental point of departure came much later, because at first there was no such thing as vicarious liability. It simply could not exist, because it is against all fundamental legal principles.
The prohibition can be traced back centuries. It is even articulated in the Bible:
Ezekiel 18:4 Behold, all souls are mine; as the soul of the father, so also the soul of the son is mine: the soul that sinneth, it shall die.
Ezekiel 18:9 Hath walked in my statutes, and hath kept my judgments, to deal truly; he is just, he shall surely live, saith the Lord GOD.
Ezekiel 18:20 The soul that sinneth, it shall die. The son shall not bear the iniquity of the father, neither shall the father bear the iniquity of the son: the righteousness of the righteous shall be upon him, and the wickedness of the wicked shall be upon him.
Not surprisingly, it took centuries for vicarious liability be introduced and become accepted. To this day, criminal vicarious liability has never officially been accepted by the courts. It became economically logical and expedient to make an employer vicariously liable for the wrongful acts of its employees.
Taking the motor accident example into consideration, obviously, if an employee is driving a company vehicle on company business, the employer should bear the risk of an accident occurring when the employee is acting in the course and scope of his or her employment.
This position was fairly well established by the end of the 1900s. Once this limited form of vicarious liability is accepted, the risk can be dealt with in an economically efficient manner by way of insurance. The company can insure itself against this risk centrally.
Initially, there was considerable resistance on the part of the courts to recognise a general doctrine of vicarious liability. It was introduced primarily via the courts and not parliament.
In England, in the famous case of Priestly versus Fowler , one employee was injured by a fellow employee and the court was asked to determine whether the employer was vicariously liable for the acts of the employee. The court refused to do this. So an exception existed in English law. No vicarious liability existed arising out of the acts of fellow employees; the so-called fellow employee, or common employment defence.
This was only abolished by statute in the mid 1900s, but not before it had been exported to countries like Australia and the United States of America, among others. Today it is well established that the employer can be vicariously liable for the wrongful and negligent acts of its employees that are committed in the course and scope of employment.
Vicarious liability for occupational accidents caused to fellow employees became largely an academic issue in many countries, because these claims were dealt with by workers’ compensation legislation.
Deciding when the action was in the course of employment is a major problem in itself. For example, an employee goes to a pub for some drinks and, on the way back, now under the influence of alcohol, causes an accident – can it be said the accident was caused in the course of the employment? In one case it was argued it could, indeed, be the case since the employee was returning the vehicle to the place of work when the accident occurred.
Sometime ago, we discussed the Australian case where a woman was injured when a light fitting struck her in the face while having sex, during a time when she was technically at work. In that case, the various adjudicating bodies kept changing their minds – some holding that the incident happened in the course of employment and others disagreeing.
To overcome this problem, some academic writers have suggested the test be changed to a risk test. This was tried in one case. While off duty, a policeman assaulted a member of the public in an attempt to impress his ex-wife.
The member of the public sued the minister of police alleging vicarious liability. Since the policeman was off duty and clearly not acting in the course of his employment, according to the traditional course of employment test, the minister could not be held liable.
The problem with this test is it is too broad and arbitrary. It was subsequently rejected and the traditional test was reinstated.
In 1975, when the courts recognised that liability can exist for mere omissions, it opened another can of worms. Which omission and which employee can create liability? For example, a female employee sued her employer alleging she suffered harm when she was sexually harassed by her boss, a fellow employee. According to her version, there was a long history of harassment, and one night, while she and her boss had met after working hours and sat in his car, he harassed her at gun point.
The question then was: could the employer be liable for the actions of the woman’s boss? It was also argued that the employer was liable because another boss knew about the harassment and did not take steps to prevent it. So, which was the offensive act here; the harassment, or the failure to take steps to prevent the harassment after becoming aware of the circumstances?
Clearly, with the recognition of liability for omissions, the basis of vicarious liability has expanded.
The most recent developments are more troubling. Increasingly, liability for criminal vicarious liability is being introduced, especially for companies in terms of corporate vicarious liability.
Currently, to the extent that it can be said that criminal vicarious liability exists, it exists because of specific provisions contained in the Criminal Procedures Act. This requires that the specific employee and the wrongful act be identified. In the field of criminal liability, contrary to civil liability, the causal link is very narrow.
Take, for example, the South African case where an employee was killed because he lit a match in an oxygen-filled confined space. This situation is governed by health and safety regulations and the possibility of a criminal prosecution existed.
It can be argued the safety regulations were not followed. The problem is that the employee who lit the match was the safety officer … under these circumstances a criminal prosecution is unlikely.
The more troubling development is the third from of liability, which has arisen in the last decade. Increasingly, regulators are imposing huge liabilities (running into billions of rand) in the form of administrative penalties. The multibillion dollar fine imposed on MTN Nigeria is but one example.
In this case, no attempt has been made to follow either the civil or criminal basis of vicarious liability. Instead, the fine is just imposed arbitrarily, by people whose ability to weigh the facts and then determine the appropriate penalty is highly suspect.
Legally Speaking is a regular column by Professor Robert W Vivian and Albert Mushai, both in the school of Economics and Business Sciences, University of the Witwatersrand. Robert W Vivian is a leading authority on insurance and risk management. He has written a number of books on South Africa’s business history. Albert Mushai holds a master’s degree from the City University, London, and was the head of the insurance department at the National University of Science and Technology in Zimbabwe before joining Wits University as a lecturer in insurance.