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March 2007

Where does vicarious liability stop?

It can come as an unpleasant surprise to some employers to find that when some act which contravenes the law has been committed by one of their employees during the course of their employment, then the employer can be the one to end up in the dock and having to pay the consequences. This is due to the well established legal principle of vicarious liability.   The subject of vicarious liability is just one of the important legal principles carefully explained in
UK Training's seminar Discrimination Law - A Survival Guide for Employers.

Employers can be held vicariously liable for acts of negligence or omission on the part of their employees in the course of employment even if the employer did not authorise or was unaware of the acts in question. To mount a successful defence, an employer must demonstrate either that the employee was not negligent or that the employee was acting in an individual capacity unrelated to the business of the employer.

In some circumstances employers may also be liable for the misdemeanours of their independent contractors or workers employed by a third party, such as an agency. For example, this applies where the employer authorises the wrongful act or had overall responsibility that could not be delegated. The courts have widened this legal principle in recent years and the delineation between an employee and a contract worker is not as crucial to the outcome of a case as it once was.

The interpretation of the term 'activities carried out in the course of employment' is more important when deciding where responsibility lies. There have been successful claims brought against organisations whose employees have been at fault after finishing work, whilst going home for lunch and when attending work-related social events.

The main deciding factor as to which employer has the responsibility for a sub-contractor or agency worker is that of 'control'. The employer who gives direction and instructions for the work to be conducted will usually be the one to bear responsibility for misdemeanors carried out during the course of that work.

If more than one employer can be identified as having control over the work of the employee then the principle of dual vicarious liability may apply. This is a principle introduced by the decision of Lord Justice May in the recent case of Viasystems (Tyneside) Limited v Thermal Transfer (Northern) Limited & Others. The case involved compensation for a flood at a factory which had been caused by the sub-contractor of a sub-contractor.

In his ruling, Lord Justice May decided that more than one employer could be subject to a claim and that the amounts awarded should be split fifty-fifty unless it could be clearly demonstrated that one party bore more of the responsibility than the other. This courageous decision overturned the principle established in Laugher v Pointer in 1826 that only one employer could be held vicariously liable.

It is also important to note that the scope of 'acts undertaken in the course of employment' is considerably wider in discrimination cases than it is in cases involving negligence or other damaging acts.

You can develop your own understanding of these issues further by attending UK Training's seminar Discrimination Law - A Survival Guide for Employers.

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