Vicarious Liability

Liability of an employer or principal for the torts of an employee or agent in the course of employment

In one minute

Vicarious liability makes one person answer for the tort of another, although he did nothing wrong himself. The usual case is an employer who must pay for a tort of his employee committed in the course of employment.

It rests on the relationship, not on the employer's fault. Two things must be shown: a relationship such as employer and employee, and a tort committed in the course of employment. In exams, this is asked as a long answer, often with a problem on a driver or a servant.

Exam focus

Frequency: Frequently asked
Usually asked as: Both (long answer and short answer)

Legal provision

No Act states the general rule. It is a common law rule, followed in India.
Sections 25 and 26, Indian Partnership Act, 1932: partners are jointly and severally liable for acts of the firm. The firm is liable for a wrongful act of a partner done in the ordinary course of the firm's business or with the authority of the other partners.
Article 300, Constitution of India: the Union and the States can be sued for torts of their servants, subject to the rules on sovereign functions.
Section 164, Motor Vehicles Act, 1988: the owner or insurer pays fixed compensation for a motor accident without proof of fault.

Meaning and definition

Vicarious liability is the liability of one person for the tort of another because of a relationship between them. The wrongdoer remains liable too. The victim may sue either or both.

The maxim qui facit per alium facit per se (he who acts through another acts himself) states the idea. The law treats the employer as if he had done the act himself. A second maxim, respondeat superior (let the superior answer), states the same idea.

The reasons are practical.

The employer chooses, trains and controls the employee, and can reduce the risk.
The employer gains from the work, so he should bear its costs.
The employer can insure and spread the cost. An employee often cannot pay damages.
The victim gets a defendant who can pay.

Detailed explanation

Step 1: the two conditions

A relationship. There must be an employer-employee (master and servant) relationship, or principal and agent, or partnership.
A tort in the course of employment. The employee must have committed the tort while doing his work, not while pursuing a purpose of his own.

Step 2: who is an employee

The law separates an employee (servant) from an independent contractor. The tests are:

Control. Does the employer control not only what work is done but also how it is done?
Integration. Is the person a part of the employer's business, or a separate business?
Tools, pay and risk. Who supplies equipment, pays, and bears profit and loss?

A person who engages an independent contractor is generally not liable for the contractor's torts. The exceptions are: a duty that the law calls non-delegable, an extra-hazardous activity, and a duty fixed directly on him by statute.

Example. A hospital in Guntur employs a nurse, and the nurse negligently gives a wrong injection. The hospital is liable for its employee. If the hospital had hired an independent laboratory to run a test, the laboratory's mistake may not be the hospital's liability, unless a non-delegable duty applies.

Step 3: the course of employment test

An act is in the course of employment if it is either authorised by the employer, or an unauthorised way of doing something the employer authorised.

Prohibited mode. A disobeyed order about how to do the job does not take the act out of the course of employment. In Limpus v. London General Omnibus Co. (1862), a bus driver raced another bus against orders. The employer was liable.
Prohibited sphere. If the order limits what the employee is employed to do, an act beyond it is outside the course of employment. In Beard v. London General Omnibus Co. (1900), a conductor drove the bus without authority and was careless. The employer was not liable.
Negligent performance. Carelessness in doing the task stays within the course of employment. In Century Insurance v. Northern Ireland Road Transport Board (1942), a tanker driver lit a cigarette while unloading petrol and caused an explosion. The employer was liable.
Frolic of his own. A deviation so large that the employee is no longer doing his employer's work is outside the course of employment (Joel v. Morison, 1834).
Fraud and crimes. An employer may be liable for a dishonest act done in the course of the work. In Lloyd v. Grace, Smith & Co. (1912), a solicitor's clerk defrauded a client in the course of the firm's business. The firm was liable.

Example. A delivery rider for a Vijayawada company is told to use the main road. To save time he takes a market lane against traffic and knocks down a pedestrian. The company is liable. He disobeyed an instruction about the mode of doing the job. If he had stopped to attend a friend's wedding across town and caused an accident there, the company would not be liable.

Step 4: employees who delegate, and passengers

If a driver, against orders, lets another person drive, the owner is liable for the driver's own negligence but not necessarily for the other person's act. In the exam problem where a bus driver lets the conductor drive, Beard v. London General Omnibus Co. is the guide: the conductor's act was outside his duty, so the owner is not liable for it.

A person who lends a car to a friend for the friend's own use is not vicariously liable, as the friend is neither servant nor agent. If the friend drives for the owner's purpose, the owner can be liable. In India the Motor Vehicles Act also requires insurance for such use.

Lifts to passengers: in Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co. (1977), the manager of a company was driving the company's car on a business journey and gave a lift to a passenger who was killed. The Supreme Court held the company vicariously liable, as the journey itself was in the course of employment.

Step 5: the State, principals and partners

The State is vicariously liable for torts of its servants in non-sovereign functions (State of Rajasthan v. Vidyawati, 1962). This is explained in the note on the liability of the State.
A principal is liable for the torts of an agent done within the actual or apparent authority of the agent.
A partner is jointly and severally liable for a wrong of a co-partner done in the ordinary course of the firm's business (sections 25 and 26 of the Partnership Act, 1932).
A hospital is liable for the negligence of its doctors and nurses. In Cassidy v. Ministry of Health (1951), the Court of Appeal held the hospital responsible for the whole team's care.

Step 6: the doctrine of common employment

At one time an employer was not liable to a worker for the negligence of a fellow worker in the same employment. This was the doctrine of common employment. Parliament abolished it in England by the Law Reform (Personal Injuries) Act, 1948. In India, workers' compensation law gave injured workers a direct claim, now under the Employees' Compensation Act, 1923.

Is the employer vicariously liable?How to read this: go down the boxes in order. A "No" answer sends you to the result beside the box.

1. Is the wrongdoer an employee, agent or partner of the defendant?
No: no vicarious liability. For an independent contractor, check the exceptions: non-delegable duty, extra-hazardous activity, statutory duty.
2. Did the employee commit a tort?
No: nothing for the employer to answer for.
3. Was the tort committed in the course of employment?
No: a frolic of his own, or an act in a prohibited sphere. The employer is not liable.
The employer is vicariously liable, and the employee remains liable too.

Don't confuse: employee, independent contractor and agent

The result depends on which relationship exists.

Point	Employee (servant)	Independent contractor	Agent
Control	Employer controls what and how	Engager controls only the result	Principal fixes authority; may not control method
Liability of the engager	Liable for torts in course of employment	Generally not liable, with three exceptions	Liable for torts within the agent's authority
Example	A company's salaried driver	A builder hired to construct a house	A broker selling goods for a trader

Inside vicarious liability. A school bus driver, employed by a school in Tirupati, drives carelessly and hurts a child. The school is liable for its employee's act in the course of his work.

Just outside it (independent contractor). A house owner hires a contractor to repaint his house. The contractor's worker drops a tin of paint on a passer-by. The owner is generally not liable, because the contractor chose how the work was done.

Common mistakes

Saying the employer must be at fault. Vicarious liability needs no fault of the employer.
Saying the employee escapes. The employee remains personally liable.
Treating a disobeyed order as always taking the act outside the course of employment. It depends on whether the order limits the mode or the sphere of work.
Applying vicarious liability to an independent contractor without checking the three exceptions.
Forgetting the doctrine of common employment is now abolished.

Apply it

Problem

Rao runs a goods transport business in Hyderabad. His driver, Kumar, is told never to carry passengers. Kumar gives a lift to a stranger, and on the way to the delivery, drives negligently and hurts a pedestrian. The pedestrian sues Rao. Is Rao liable?

Issue. Does the rule against carrying passengers take the accident outside the course of employment?

Rule. An employer is liable for a tort committed in the course of employment, including an unauthorised mode of doing the work (Limpus). A prohibition on the sphere of work takes the act outside the course of employment (Beard).

Application. At the time of the accident Kumar was doing the very job he was employed to do: driving the goods to the delivery. The ban on passengers relates to the mode of doing the job. His negligent driving injured the pedestrian.

Conclusion. Rao is vicariously liable to the pedestrian. Kumar is also liable.

Leading case laws

Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co. (P) Ltd. (1977)
Facts. A company's manager was driving the company's car on a business journey when it struck a tree. A gratuitous passenger died.

Principle. The Supreme Court held the company vicariously liable. The journey was in the course of employment, so the lift did not take the driving outside it.

Why it matters. The leading Indian case on vicarious liability for driving.
State of Rajasthan v. Vidyawati (1962)
Facts. A government jeep returning from a repair shop ran down a pedestrian.

Principle. The Supreme Court held the State vicariously liable, as running a vehicle is not a sovereign function.

Why it matters. It applies vicarious liability to the State.
Cassidy v. Ministry of Health (1951)
Facts. A patient who went in for a hand operation came out with a stiff hand. He could not say which staff member was careless.

Principle. The Court of Appeal held the hospital liable for the negligence of its staff, whoever it was.

Why it matters. It makes hospitals vicariously liable for doctors and nurses it employs.
Spring Meadows Hospital v. Harjot Ahluwalia (1998)
Facts. A nurse in a hospital injected a child without a sensitivity test, causing permanent brain damage.

Principle. The Supreme Court dismissed the hospital's appeal and upheld compensation to the child and, separately, to his parents, for the deficiency in service.

Why it matters. It shows institutional liability for an employee's negligence.

How to write this answer in the exam

5-mark answer

Define vicarious liability and give the maxim qui facit per alium facit per se.
State the two conditions: relationship and course of employment.
Explain course of employment in two lines.
Give one example, with Limpus or Pushpabai.

10-mark answer

Meaning, maxims and reasons.
Employee against independent contractor, with the exceptions.
Course of employment: Limpus, Beard, Century Insurance, Joel v. Morison, Lloyd v. Grace Smith.
Delegation and lifts: Pushpabai Purshottam Udeshi.
State, principal, partner and hospital: Vidyawati, Cassidy.
Common employment.
Conclusion.

Key points to remember

Vicarious liability needs no fault of the employer. It rests on the relationship.
Conditions: employer-employee (or equivalent) relationship, and a tort in the course of employment.
An unauthorised mode of doing the job stays in the course of employment. A frolic of his own does not.
No liability for an independent contractor, except non-delegable duty, extra-hazardous activity and statutory duty.
Partners are jointly and severally liable (sections 25 and 26, Partnership Act, 1932).
The State is liable for non-sovereign functions (Vidyawati). Common employment is abolished.

Quick self-test

1. What are the two conditions of vicarious liability?

A relationship such as employer and employee, and a tort committed in the course of employment.

2. Does a disobeyed instruction always free the employer?

No. If the instruction limits only the mode of doing the work, the act stays in the course of employment (Limpus). If it limits the sphere of the work, the act is outside it (Beard).

3. Is an employer liable for the torts of an independent contractor?

Generally not. The exceptions are a non-delegable duty, an extra-hazardous activity, and a duty fixed directly by statute.