Vicarious liability in English law

[1] This liability has expanded in recent years following the decision in Lister v Hesley Hall Ltd[2] to better cover intentional torts, such as sexual assault and deceit.

[3] The leading case is now the Supreme Court decision in Catholic Child Welfare Society v Institute of the Brothers of the Christian Schools, which emphasised the concept of "enterprise risk".

[10] Historical tests centered around finding control between a supposed employer and an employee, in a form of master and servant relationship.

[11] The roots for such a test can be found in Yewens v Noakes,[12] where Bramwell LJ stated that: "...a servant is a person who is subject to the command of his master as to the manner in which he shall do his work.

The determination whether the actual wrongdoer is a servant or agent on the one hand or an independent contractor on the other depends on whether or not the employer not only determines what is to be done, but retains the control of the actual performance, in which case the doer is a servant or agent; but if the employer, while prescribing the work to be done, leaves the manner of doing it to the control of the doer, the latter is an independent contractor.

[15]In recent years, as the duties of employees have grown ever more specialised and far reaching, the control test has seen less primary use in establishing liability.

[14] It is difficult to state for example that a hospital administrator controls the method and actions of a professional doctor, despite liability having been clearly established in such cases.

[18] Tests based on the economic relationship between an employer and employee have found favour in subsequent cases, notably Market Investigations Ltd v Minister of Social Security,[19] in the decision of Lord Cooke.

Despite express prohibitions from the employer, they were found liable; this was merely an unauthorised mode of the employee carrying out his duties (driving), not an entirely new activity.

The first, Conway v George Wimpey & Co Ltd[40] involved a driver, who, despite express prohibitions, gave a lift to an employee of another firm, and negligently injured him in an accident.

This can be compared to Rose v Plenty,[42] where liability was imposed where a small boy was injured in a road accident, while helping a milkman on his rounds.

[47] Journeys to and from work, and whether these are regarded as in the course of employment, were considered in Smith v Stages,[48] where Lord Lowry established several factors for determining liability.

[54] In 2020, the Supreme Court had a further opportunity to consider the principles underpinning vicarious liability in the case of WM Morrison Supermarkets plc v Various Claimants [2020] UKSC 12.

"[56]Lord Reed held that whilst the judge at first instance and Court of Appeal had “applied what they understood to be the reasoning of Lord Toulson in Mohamud [2016] AC 677” they had “misunderstood the principles governing vicarious liability in a number of relevant respects” which if correct would have constituted “a major change in the law.” Lord Reed cited the judgment of Lord Nicholls of Birkenhead in Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48 [57] with approval, which he summarised as: "the wrongful conduct must be so closely connected with acts the employee was authorised to do that, for the purposes of the liability of the employer to third parties, it may fairly and properly be regarded as done by the employee while acting in the ordinary course of his employment"but he stressed: "The words “fairly and properly” are not, therefore, intended as an invitation to judges to decide cases according to their personal sense of justice, but require them to consider how the guidance derived from decided cases furnishes a solution to the case before the court.

"Lord Reed held: "In the present case, it is abundantly clear that the employee was not engaged in furthering his employer's business when he committed the wrongdoing in question.

Morris v CW Martin & Sons Ltd,[59] for example establishes vicarious liability of thefts by an employee, where there is a non-delegable duty to keep the claimant's possessions safe.

The importance vested in Salmond's test was not reconsidered until Lister v Hesley Hall Ltd, a case involving vicarious liability for sexual abuse.

[73]Vicarious liability for theft has also been found due to poor selections of employees by an employer, as in Nahhas v Pier House Management.

[75] The management company were found to have been negligent in hiring the porter, having not carried out sufficient checks on his background, address, or obtaining a written reference.

It has been stated it is unlikely that as a general rule, where there are proper checks and systems to prevent such incidents, liability would be found; it is in the interests of society to allow rehabilitation of offenders.

[76] Until recently, it was not considered that an employer could be vicariously liable for sexual assault, despite the particular vulnerability of children, and special care that must be taken in selecting employees.

[79] This rule was reversed in the shortly following case of Lister v Hesley Hall Ltd, effectively establishing liability for sexual assault, where it is closely connected with an employee's duties.

[81] Employers have been responsible for the fraudulent misrepresentations of their employees since the mid-nineteenth century, under the decision of Barwick v English Joint Stock Bank.

[83] Thereupon, the test for vicarious liability of fraud was whether it was within an employee's authority – either actual, or outwardly appearing – to carry out the fraudulent actions that he did.

[85] As with other intentional torts, such liability was extended following Lister v Hesley Hall Ltd, to cover any fraud which is closely related to an employee's employment.

The House of Lords chose to extend the principal liability of employers, to cover fraudulent representations made by employees with no actual or ostensible authority to make them.

Lister v Romford Ice and Cold Storage Co[87] created a controversial principle at common law, that where an employer is found vicariously liable for an employee's actions, they are entitled to recover an indemnity from them, to cover such losses.

[88] The House of Lords accepted by a narrow margin that there may be an implied term in the contracts of employees, by which they must exercise reasonable care and skill in their work.