Understanding the tort of 'Vicarious Liability'
Usually, we see that a person is not liable for the acts done by the other person. However, under the law of torts, a person can be held liable for another person. Also, for this person to hold accountable for the actions of the other person, there must exist any form of relationship between the person who is accused and the other person. In short, there must be some sort of connection between these people.
Examples of Vicarious Liability
The liability of doing any wrongful act on behalf of another person is based on the concept of respondeat superior. Also, this means that the superior should be let liable. Some of the examples of relationships where vicarious liability may arise are principal-agent, master-servant, etc.
Master and Servant
In this case, the general rule is that the master is liable for all sorts of acts that are authorized by him. Also, it is included that the acts are done by the servant at the time of his/her employment. Thus, for the liability to arise, the following conditions should be satisfied. One is that the tort is committed by the servant. And other is that the tort committed by the servant should be at the time of employment.
Although there is a difference between an independent contractor and a servant, an independent contractor is someone who is employed to perform a certain task. Thus, in this, the master cannot determine the way in which the job is to be done. A servant is someone who is employed to do the work under the controls of the master and his direction. So, the important thing here to note is that the master is also not liable for the acts that are done by the independent contractor.
For example, the driver you hire is your servant. You can give me advice as to how to drive the car and give him directions. The taxi driver in this scenario will be the independent contractor. Thus, you can only tell the direction to the taxi driver but you cannot order him.
Principal and Agent
A principal, in this case, is a person who authorizes someone to act on his/her behalf. The other who is advised to act accordingly is called the agent. It is always stated that the principal is stated liable for any act by his agent. The act must be authorized by the principal for him to be held liable. The authority that principal acts can be in the form of implication or expressed.
Reasons for imposing vicarious liability
Several reasons have been advanced as a justification for the imposition of vicarious liability:
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.
Vicarious liability encourages accident prevention by giving an employer a financial interest in encouraging his employees to take care of the safety of others.
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 for this is that every act which is done by a 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 mater’s own act”.
Constituents of Vicarious Liability
The constituents of Vicarious Liability are:
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.
Difference between Servant and Independent Contractor
A servant and independent contractor are both employed to do some work for 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 an act of his servant is based on the maxim respondeat 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 tortfeasors. The reason for the maxim respondeat 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
The tort was committed by the servant.
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, the 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. An 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.”
For Example, My car driver is my servant. If he negligently knocks down X, I will be liable for that. But if he hires a taxi for going to the 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.
Traditional view to determine the distinction between Servant and Independent Contractor
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 the case of the 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 the 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 and W Henderson Ltd., Lord Thankerton pointed out four indicia of a contract of service:
Master’s power of selection of his servant;
Payment of wages or other remuneration;
Master’s right to control the method of doing the work, and
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 to determine the distinction between Servant and Independent Contractor
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 relationships like those between a farmer and an agricultural laborer (before agriculture mechanization), 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 the employer doesn't need to 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 recognized that the control test is no longer decisive.
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:
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;
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;
The other provisions of the contract are consistent with its being a contract of service.
The ‘integral Part of the Business’ Test
LORD DENNING, as LORD JUSTICE, in Stevenson Jordan and Harrison Ltd. v Macdonald and Evens, 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 recognize 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.”
The author is a Fifth-year Law Student pursuing B.A. LL.B from Central University of Kashmir.