SQE1 FLK1

## Learning Outcomes

This article outlines the principles and application of vicarious liability, including:

- The three elements of vicarious liability and how to spot when any element is missing in SQE1 scenarios
- Employee versus independent contractor status, applying control, organisation, and economic reality tests with typical factual indicators and common exam traps
- “Course of employment” analysis, distinguishing authorised acts, unauthorised modes, prohibited acts, deviations, and when conduct becomes a true “frolic of one’s own”
- The “close connection” test for intentional wrongdoing (assaults, fraud, data disclosures), including how courts evaluate remoteness and personal vendettas
- Extension of liability to relationships “akin to employment” (Christian Brothers, Cox, and Armes criteria) and their contrast with genuinely independent businesses
- Limits of vicarious liability, particularly in relation to independent contractors, non-delegable duties, and situations giving rise to an employer’s own primary negligence
- Special situations such as borrowed employees, potential dual vicarious liability, and statutory tort claims (e.g. harassment and discrimination at work)
- The interaction between vicarious liability, policy considerations (risk distribution, insurance, and fairness), and how these guide judicial reasoning
- Indemnity and contribution between employer and employee, the practical significance of insurance, and how exam questions may test these consequences

## SQE1 Syllabus

For SQE1, you are required to understand the principles and application of vicarious liability, with a focus on the following syllabus points:

- the three elements required for vicarious liability to arise
- how to distinguish between employees and independent contractors (control, organisation and economic reality tests)
- the meaning of “in the course of employment” including unauthorised modes, prohibited acts and the “frolic of one’s own”
- the “close connection” test for intentional torts
- the extension of vicarious liability to relationships akin to employment (key criteria and illustrations)
- limits of vicarious liability, including independent contractors, non-delegable duties and the employer’s own negligence
- borrowed employees and potential dual vicarious liability
- indemnity/contribution between employer and employee

## Test Your Knowledge

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, 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, focus on identifying the elements for vicarious liability, separating employees from independent contractors, and analysing whether the tort was committed “in the course of employment,” including the close-connection analysis for intentional wrongdoing.

Vicarious liability is policy-driven. Courts weigh fairness, loss-spreading and practical justice: employers organise work, usually hold insurance, and create or control the risks that materialise through employees’ activities. Liability is secondary and does not remove the employee’s primary liability.

> **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.
>
> **Test Tip:**
> In SQE-style questions on Principles of vicarious liability, identify the legal test, the triggering fact, and the consequence before choosing between similar answer options.

### The Three Elements of Vicarious Liability

To establish vicarious liability, three requirements must be satisfied:

![Employment status categories relevant to vicarious liability, including traditional employees, relationships akin to employment, agency and zero-hours workers, volunteers, prisoners, religious members and contractors.](https://static.pastpaperhero.com/images/sqe1-flk1-vicarious-liability-principles-of-vicarious-liability_00.png)

_Work relationships relevant to vicarious liability, ranging from traditional employment to relationships akin to employment and independent contracting._

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.”

These elements are cumulative. If any element fails, vicarious liability does not arise.

> **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), coupled with other indicators such as incorporation into the business and economic dependency, 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 a suite of tests to determine status; no single factor is decisive.

- Control: does the putative employer direct not just what is done, but how it is done? Modern control includes managerial and organisational oversight rather than minute supervision.
- Incorporation/organisation: is the worker part and parcel of the business (contract of service), as opposed to merely providing ancillary services (contract for services)?
- Economic reality/multiple factors: a comprehensive evaluation, including:
  - who supplies tools and equipment
  - whether the worker bears the financial risk and has an opportunity for profit
  - whether pay is a wage/salary versus a price for a job
  - how tax and national insurance are handled
  - the presence of any substitution right and whether it is genuine
  - degree of mutuality of obligations (regular work and obligation to accept/offer)

Ready Mixed Concrete remains a key illustration of the multiple-factors approach. In borderline or “gig economy” arrangements, tribunals and courts look past labels to the real substance of the relationship.

Borrowed employees and dual vicarious liability can arise. Where one business lends an employee to another and both exercise sufficient control over the specific negligent act, both may be vicariously liable. Equally, where a hirer assumes day-to-day control of an operative, the original employer may rebut liability if, on the facts, control and responsibility have transferred.

### 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, harassment or another tort. If the employee has not committed a tort, the employer cannot be vicariously liable. Liability may attach for statutory torts: for example, an employer can be vicariously liable for breaches of the Protection from Harassment Act where actionable in damages. Defences available to the employee are available to the employer.

### 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
- authorised acts carried out in an unauthorised manner (i.e. a wrongful mode of doing an authorised act)
- acts so closely connected to the employee’s duties that it is fair and just to treat them as occurring in the course of employment

Departures for purely personal reasons will usually take the employee outside the course of employment.

Common applications:

- Unauthorised mode: an employee does what they are employed to do, but carelessly or contrary to safe instructions—still within the course of employment.
- Disobedience to instructions: prohibitions affecting “how” the job is done rarely defeat liability if the employee is furthering the employer’s business; prohibitions that go to “what” the employee is employed to do are different.
- Deviations and detours: minor deviations (e.g. lunch stops or slight route changes) often remain within the course; substantial new journeys for private purposes are a “frolic of one’s own.”

### 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 while still furthering the employer’s business, the employer may remain liable. However, if the employee acts for purely personal reasons (a “frolic of one’s own”), the employer is not liable. Courts look at the employee’s purpose and the extent of departure from assigned tasks.

> **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.

Examples across the spectrum range from minor route deviations (generally within the course) to substantial detours for personal errands (generally outside). Travel undertaken as part of work is often within the course, whereas the journey to and from work is typically not—subject to exceptions (e.g. special missions paid and directed by the employer).

### 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 sufficiently close connection between the employee’s duties and the wrongful act. The modern inquiry asks whether the employee’s tort was so closely connected with acts they were authorised to do that it would be fair and just to hold the employer liable. This applies to a wide range of wrongdoing, including deliberate violence by security staff or dishonesty by employees acting with ostensible authority.

Illustrations:

- A warden employed to care for residents abuses that position: close connection likely.
- A customer-facing employee escalates a confrontation with a customer arising out of a service interaction: close connection may be found.
- A disgruntled employee executes a personal vendetta unrelated to assigned functions: connection likely too remote.

Courts carefully separate acts done in furtherance (or misuse) of assigned functions from acts pursuing entirely personal ends. Recent Supreme Court authority has emphasised the narrower, more demanding side of this test. In Trustees of the Barry Congregation of Jehovah's Witnesses v BXB [2023] UKSC 15, a religious congregation was not vicariously liable for a rape committed by an elder because the tort took place in a private setting and was not sufficiently linked to the activities entrusted to him by the congregation; the fact that his role had facilitated the parties’ acquaintance was merely opportunity, not close connection.

> **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. Be able to apply it to scenarios involving deliberate wrongdoing by employees, and identify when an employee’s actions are a personal frolic.

### Relationships “Akin to Employment”

Vicarious liability can extend to relationships that, while not orthodox employment, are sufficiently similar in substance. Courts examine whether:

- the activities are integrated into, and carried out for the benefit of, the defendant’s enterprise (not part of the tortfeasor’s own independent business)
- the defendant created or significantly increased the risk by assigning those activities
- the tortfeasor is to some degree under the defendant’s control
- the defendant is better placed to bear and insure against the loss

This approach has supported liability for abuse in institutional or quasi-institutional settings, and for workforces who, though not employees in contract terms, carry out the defendant’s work as part of its operations (e.g. prisoners working in prison kitchens). By contrast, where the tortfeasor is truly in business on their own account—operating independently and not integrated into the defendant’s undertaking—liability is not imposed.

### Worked Example 1.5

A bank engages a self-employed physician to perform recruitment medicals at his own consulting rooms, using his own equipment and scheduling. He assaults examinees. Is the bank vicariously liable?

> **Answer:**
> No, on these facts the doctor is operating an independent business on his own account and is not in a relationship akin to employment with the bank.

### Limits of Vicarious Liability

Vicarious liability does not apply to:

- Acts by independent contractors (subject to exceptions). The principal may still be directly liable for its own negligence—for example, in failing to select a competent contractor or where a non-delegable duty arises (e.g. certain duties owed by schools or hospitals to those in their care).
- Acts by employees that are entirely personal and unconnected to their work. Wrongdoing that is motivated by personal vengeance or is a significant departure from assigned functions will often be outside the course of employment.
- Certain data disclosure and “vendetta” cases where the employee’s assigned functions provide the occasion but not the close connection: if the employee is pursuing a personal grievance unconnected to furthering the employer’s business, vicarious liability is unlikely.

Indemnity and contribution: because employer and employee are joint tortfeasors when vicarious liability applies, an employer that pays damages may seek contribution from the employee to the extent just and equitable. At common law, a full indemnity may be available where the loss flowed from the employee’s breach of contractual duty to exercise reasonable skill and care. In practice, contribution claims are uncommon where insurance responds.

### Worked Example 1.6

An employee with system access intentionally uploads customers’ personal data online to “punish” the employer after a disciplinary, acting from home outside work hours. Is the employer vicariously liable?

> **Answer:**
> Likely no. Although access derived from employment, the disclosure was motivated by a personal vendetta and not closely connected to assigned functions.

### Worked Example 1.7

Two co-workers engage in horseplay on site. One detonates a pellet near another as a prank; the pellet injures a third party. Is the employer vicariously liable for the prankster’s act?

> **Answer:**
> Likely no on these facts. Horseplay done for the employee’s own amusement is generally a personal act, not closely connected to advancing the employer’s business.

### Worked Example 1.8

A nightclub contracts with a security company to provide door staff. A bouncer employed by the contractor assaults a patron while on duty. The club tightly directs and supervises the bouncers’ conduct nightly. Who is vicariously liable?

> **Answer:**
> Depending on factual control, the contracting security firm will usually be vicariously liable. If the venue exercises close, day-to-day control over the operative and functions, it may itself be vicariously liable. In some cases both may be liable.

## Summary

| Requirement                  | Vicarious Liability Applies? |
| ---------------------------- | ---------------------------- |
| Employee or akin to employee | Yes                          |
| Tort committed               | Yes                          |
| In course of employment      | Yes                          |
| Independent contractor       | No (except rare exceptions)  |
| Frolic of one’s own          | No                           |

## Key Point Checklist

_This article has covered the following key knowledge points:_

- Vicarious liability requires: an employer/employee (or akin) relationship; a tort by the employee; and that the tort was committed in the course of employment.
- Employees are distinguished from independent contractors using control, organisation and economic reality tests; labels are not decisive.
- Authorised acts done in an unauthorised way can still be in the course of employment; substantial personal deviations are a “frolic.”
- Intentional torts may trigger vicarious liability where there is a close connection between the duties assigned and the wrongdoing.
- Vicarious liability can extend to relationships akin to employment where activities are central to, and carried out for, the defendant’s enterprise.
- Limits include independent contractors (subject to non-delegable duties and selection/management negligence) and personal vendettas disconnected from assigned functions.
- Borrowed employees and dual vicarious liability may arise where more than one entity exercises relevant control over the negligent act.
- An employer that has paid damages may seek contribution/indemnity from the employee where just and equitable.

## Key Terms and Concepts

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


Vicarious liability - Principles of vicarious liability