Whose Fault Is It Anyway? Vicarious Liability in The Workplace

By Sara Joy - Law Student @ Downing College, Cambridge

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Vicarious liability is where one party is held partly responsible and liable for the illegal actions or omissions of a third party. In the workplace, this means that an employer can be vicariously liable for the tortious acts of its employees carried out “in the course of employment”. Essentially, the employer or company can be sued for the negligence of employees.

To consider whether this is a fair and justifiable concept, it is important to explore a few factors such as the principles of tort, the scope of the liability and potential justifications. In theory, this concept seems somewhat inconsistent with the principles and characteristics of tort. Loss compensation in tort law is dependent on establishing the breach of duty owed to one party by another. Thus, this area of law takes a corrective justice approach to compensation, in that typically, only those who have been wronged by another individual and not by unfortunate circumstances such as a natural disaster will be able to make a tort claim. This is why 93% of accident victims get no tort compensation at all. If tort law is about righting civil wrongs and vindicating rights, it seems inconsistent that the employer is to be held liable for the tortious conduct of employee.

Additionally, it could be argued to be immoral to allow someone else to shoulder the burden and blame of another’s harm-causing action. After all, if A’s child had killed someone, would it be fair for A to instead be imprisoned because he has an authoritative relationship over the child whereby, the child should be acting under A’s instructions? No and of course, this is a hyperbolic example and in practice there are differences between tort liability and criminal prosecution, but it serves to illustrate the controversial principles of blame underlying vicarious liability.

Although this principle in tort law is controversial and somewhat expanding, let us explore the reasons why this practice is still in place. Firstly, the Supreme Court has limited the scope for tort liability under vicarious liability in its decision in VM Morrisons Supermarkets plc v Various Claimants. Mr Skelton, a former Morrisons’ senior internal IT auditor downloaded payroll data of 100,000 employees and shared this data online due to a grudge he held against his employer. 9,263 issued a claim against Morrisons for damages for breach of the Data Protection Act 1998 (“DPA”). Lower courts found Morrisons to be vicariously liable for Mr Skelton’s conduct either for breach of statutory duty, tortious misuse of private information or breach of confidence in equity. However, the Supreme Court disagreed ruling that conduct must be “so closely connected with acts he was authorised to do that” “his wrongful disclosure may fairly and properly be regarded as done by him while acting in the ordinary course of his employment”.

Thus, this ruling prevents vicarious liability being unfairly applied so broadly that employers will become liable for employee’s tortious acts that are expressly prohibited or not coherent with instructions given by employers and so in practice, the murder scenario of the previous paragraph would not stand. Additionally, this form of liability may be justified based on enterprise risk rationale which essentially means that if you engage in some enterprise for your own benefit which involves some inherent risk of harm to others (in this case an employer seeks to profit from having an employee work for him and there is a risk they will commit a tort), then if the risk materialises, you should compensate others for harm. Moreover, from a practical perspective, the employer or company is likely to have more money than the employee and so by allowing for vicarious liability, this means there is a greater likelihood that the claimant will actually be compensated. This is important considering tort law is often viewed through a loss compensation model lens whereby as Lord Bingham declared in Fairchild v Glenhaven Funeral Services Ltd:

“the overall object of tort law is to define cases in which the law must justly hold one party liable to compensate another”.

To conclude, although in theory vicarious liability may appear to be an unfair imposition on employers, when applied in the law, the scope of liability combined with the justifications of having such a system such as allowing for victims to actually receive compensation for harm and the enterprise risk rationale theory legitimatise this legal concept.

Further reading:

1. Definition of Vicarious Liability (Thomas Reuters): https://uk.practicallaw.thomsonreuters.com/9-200-3629

2. VM Morrisons Supermarkets plc v Various Claimants analysis (Blackstone Chambers): https://www.blackstonechambers.com/news/wm-morrisons-supermarkets-plc-appellant-v-various-claimants-respondent/

3. VM Morrisons Supermarkets plc v Various Claimants analysis (Ogier): https://www.ogier.com/publications/landmark-uk-supreme-court-decision-on-vicarious-liability-for-action-of-employee

4. Cane, P. (2017) Key ideas in tort law. London: Hart Publishing

5. Vicarious liability practice note (Thomas Reuters): https://uk.practicallaw.thomsonreuters.com/3-521-4527?originationContext=document&transitionType=DocumentItem&contextData=(sc.Default)&ppcid=3401f046be04472f99b9c9b6975309df&comp=pluk