Vicarious liability - Principles of vicarious liability

Learning Outcomes

After reading this article, you will be able to identify and apply the core requirements for vicarious liability in tort, including the employer/employee relationship, the need for a tort to be committed, and the meaning of “in the course of employment.” You will also be able to distinguish employees from independent contractors, explain the “close connection” test for intentional torts, and recognise recent developments in the law relevant to SQE1.

SQE1 Syllabus

For SQE1, you are required to understand the principles and application of vicarious liability, especially in the context of employer/employee relationships. In your revision, focus on:

• the three elements required for vicarious liability to arise
• how to distinguish between employees and independent contractors
• the meaning of “in the course of employment” and the relevance of the “close connection” test
• the extension of vicarious liability to relationships akin to employment
• the limits of vicarious liability, including the “frolic of one’s own” exception

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which three elements must be present for an employer to be vicariously liable for a tort?
2. What is the main legal test used to distinguish an employee from an independent contractor?
3. When will an employer not be vicariously liable for an employee’s tort?
4. What is the “close connection” test and when is it relevant?

Introduction

Vicarious liability is a principle in tort law that holds one person liable for the torts committed by another. Most commonly, it makes employers liable for torts committed by their employees. For SQE1, you must be able to identify the requirements for vicarious liability, distinguish employees from independent contractors, and apply the “course of employment” and “close connection” tests.

Key Term: vicarious liability
Vicarious liability is the legal principle by which a person or organisation is held liable for the torts committed by another, usually in the context of an employer being liable for the acts of an employee.

The Three Elements of Vicarious Liability

To establish vicarious liability, three requirements must be satisfied:

1. There must be an employer/employee relationship (or a relationship akin to employment).
2. The employee must have committed a tort.
3. The tort must have been committed “in the course of employment.”

Each element is explained below.

Key Term: employer/employee relationship
A relationship where one person (the employer) has a sufficient degree of control over the work and conduct of another (the employee), as opposed to an independent contractor.

Key Term: course of employment
Acts done by an employee while carrying out their authorised duties, or acts closely connected to those duties, for which the employer may be held liable.

Distinguishing Employees from Independent Contractors

Vicarious liability generally applies only to employees, not independent contractors. The courts use several tests to determine employment status:

• Control test: Does the employer control how the work is done?
• Incorporation/organisation test: Is the worker incorporated into the business?
• Economic reality/multiple factors test: Considers pay, tax, equipment, risk of profit/loss, and mutual obligations.

No single factor is decisive; the courts look at the overall relationship.

Worked Example 1.1

A delivery driver is paid a salary, wears the company uniform, and must follow company procedures. The company controls the routes and working hours. Is the driver likely to be an employee or an independent contractor?

Answer: The driver is likely to be an employee, as the company exercises significant control and the driver is incorporated into the business.

The Requirement for a Tort

There can be no vicarious liability unless the employee has committed a tort. This could be negligence, battery, or another tort. If the employee has not committed a tort, the employer cannot be vicariously liable.

In the Course of Employment

An employer is only liable for torts committed by an employee “in the course of employment.” This includes:

• Acts authorised by the employer.
• Acts authorised but carried out in an unauthorised manner.
• Acts closely connected to the employee’s duties.

If the employee acts entirely for personal reasons, the employer is not usually liable.

Worked Example 1.2

A shop assistant is asked to stop shoplifters. During an altercation, the assistant uses excessive force and injures a customer. Is the employer vicariously liable?

Answer: Yes. The assistant was performing an authorised act (preventing theft), even if done in an unauthorised way (using excessive force).

Prohibited Acts and the “Frolic of One’s Own”

If an employee is expressly prohibited from doing something but does it anyway, the employer may still be liable if the act furthers the employer’s business. However, if the employee acts for purely personal reasons (a “frolic of one’s own”), the employer is not liable.

Key Term: frolic of one’s own
When an employee departs so far from their work duties for personal reasons that the employer is not liable for their actions.

Worked Example 1.3

A delivery driver diverts from their route to visit a friend and, while driving to the friend’s house, negligently causes an accident. Is the employer vicariously liable?

Answer: No. The driver was on a “frolic of their own” and not acting in the course of employment.

The “Close Connection” Test and Intentional Torts

Employers may be liable for intentional torts (such as assault or fraud) if there is a close connection between the employee’s duties and the wrongful act. The courts ask whether it is fair and just to hold the employer liable.

Key Term: close connection test
A legal test used to determine if an intentional or unauthorised act by an employee is sufficiently connected to their employment to make the employer liable.

Worked Example 1.4

A nightclub bouncer, employed to maintain order, assaults a customer after an argument about entry. Is the employer vicariously liable?

Answer: Yes, if the assault is closely connected to the bouncer’s duties, the employer may be liable.

Exam Warning

The “close connection” test is especially important for intentional torts. For SQE1, be able to apply this test to scenarios involving deliberate wrongdoing by employees.

Relationships “Akin to Employment”

Recent case law has extended vicarious liability to relationships that are not traditional employment but are sufficiently similar, such as:

• Religious organisations and their members
• Prison authorities and prisoners working in prison
• Local authorities and temporary guardians

The courts consider factors such as control, incorporation, and whether the activity is central to the defendant’s business.

Limits of Vicarious Liability

Vicarious liability does not apply to:

• Acts by independent contractors (except in rare cases, e.g., non-delegable duties)
• Acts by employees that are entirely personal and unconnected to their work

Summary

Key Point Checklist

This article has covered the following key knowledge points:

• Vicarious liability requires an employer/employee (or similar) relationship, a tort committed by the employee, and that the tort was committed in the course of employment.
• Employees are distinguished from independent contractors using control, incorporation, and economic reality tests.
• Employers may be liable for intentional torts if there is a close connection to the employee’s duties.
• Vicarious liability does not apply to acts by independent contractors or to employees on a “frolic of their own.”
• Recent cases have extended vicarious liability to relationships akin to employment.

Key Terms and Concepts

• vicarious liability
• employer/employee relationship
• course of employment
• frolic of one’s own
• close connection test