Vicarious liability: what is it and who is liable?
What is vicarious liability?
A vicarious liability arises when an employee commits an act of negligence causing harm or damage to a third party for which the employer has to bear liability.
There are three elements that need to be present for vicarious liability; 1. Employment – the person who committed the tort must be an employee, 2. A tort must be committed and 3. The tort must be committed in the course of employment.
What the above elements mean that vicarious liability can only be established if the person who committed the wrong was an employee, and he commits a wrong act (causing harm or damage to someone), and the wrong act was committed when he was working. For example say a satellite disc installation engineer comes to your house but does the installation so bad that the exterior and interior walls need repairing. In this instance the employer actually has not done anything wrong but would still be liable under vicarious liability. And the above example also satisfy the 3 elements (employment, tort committed, in the course of employment) which must be present for liability.
Who is an employee?
Whether someone is an employee or an independent contractor can be established by applying various tests which were devised in the leading case of Ready Mixed Concrete v Minister of Pensions and National Insurance (1968), and include;
Control test – which asks if the employee is under the control of the employer who tells him what to do and how to do it? This statement may not seem to apply when it comes to highly skilled jobs such as a surgeon etc.
Integration test – this test asks if the person is integrated into the company – or in another words, is part of the organisation.
Economic reality test – this test is basically to determine factors such as who pays the worker’s tax and national insurance; who provides the tools for the work; and whether the terms and conditions that have been agreed between the two parties are consistent with a contract of employment. A leading case which set out the tests for who is an employee,
The tort was committed in the course of employment: an employee who commits a tort in the course of employment would make his employer vicariously liable if the tort was authorised by the employer or if there was a close connection between the job and the tort.