## **Learning Outcomes**

This article examines vicarious liability for torts committed in the course of employment, including:

- The core elements that must be present before an employer can be vicariously liable, and how they are likely to be tested in SQE1 MCQs
- How to distinguish employees from independent contractors using control, organisation and economic reality (multiple) tests, and why the label in the contract is not decisive
- Modern extensions to relationships “akin to employment” and the policy reasons for imposing liability in institutional or quasi-employment settings
- The meaning of “in the course of employment” for negligent, prohibited and intentional acts, with emphasis on unauthorised modes of performing authorised tasks
- Application of the “close connection” test to intentional or criminal wrongdoing, including assaults, abuse of authority and opportunistic misconduct
- Treatment of deviations, detours, disobedience to instructions and “frolics of one’s own”, and how small factual changes can alter liability
- Problem areas such as work-related social events, travelling between sites, and borrowed or dual employees under shared control
- The relationship between personal and vicarious liability, joint liability of employer and employee, and when contribution or indemnity may be sought
- Worked examples mirroring SQE1-style fact patterns to help you practise applying the legal tests systematically and avoid common exam traps

## **SQE1 Syllabus**

For SQE1, you are required to understand vicarious liability in tort in the employment context, with a focus on the following syllabus points:

- the definition and rationale for vicarious liability in tort
- the tests for identifying an employment relationship (employee vs independent contractor)
- the requirements for a tort to be committed “in the course of employment”
- the application of the “close connection” test, especially for intentional or criminal acts
- the distinction between personal and vicarious liability, and the potential for employer indemnity
- the modern extension to relationships “akin to employment” and policy factors supporting liability
- limits of vicarious liability for independent contractors and the role of non-delegable duties

## **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. Which of the following is NOT a relevant factor in distinguishing an employee from an independent contractor?
   a) Who provides equipment  
   b) Who sets working hours  
   c) Whether the worker wears a uniform  
   d) Whether the worker bears financial risk
3. True or false? An employer can never be vicariously liable for an employee’s criminal act.
4. What is the “close connection” test and when is it applied?

## **Introduction**

Vicarious liability is a principle in tort law that holds one party responsible for the torts committed by another. In the employment context, it means an employer may be liable for torts committed by an employee during the course of their employment. This doctrine is rooted in policy: employers are better placed to bear the risk and compensate victims, and are expected to supervise their workforce. The rule also recognises that work-related risks are created by the enterprise for whose benefit the work is done, and employers will usually carry insurance.

> **Key Term: vicarious liability**
> Vicarious liability is the legal principle that makes one person (usually an employer) liable for torts committed by another (usually an employee) in the course of employment.

## The Three Requirements for Vicarious Liability

To establish vicarious liability, three elements must be satisfied:

1. There must be an employment relationship (employee, not independent contractor).
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.

### 1. Employment Relationship

The employer is only vicariously liable for torts committed by employees, not independent contractors. The courts use several tests to distinguish between the two.

#### The Control Test

This test asks: does the employer have the right to control how the work is done, not just what is done? If so, the worker is more likely to be an employee. Control remains relevant but is no longer decisive on its own, especially in modern, skilled work.

#### The Incorporation (Organisation) Test

This test considers whether the worker is incorporated into the business (employee) or merely provides services as an accessory (contractor).

#### The Economic Reality (Multiple) Test

This is the modern approach. The court considers all relevant factors, including:

- Who pays wages and deducts tax/NI?
- Who provides equipment?
- Who bears the risk of profit or loss?
- How is the work scheduled and supervised?
- Is personal service required (no general right to send a substitute)?
- Are the contractual terms consistent with a contract of service, rather than a contract for services?

Labels in written contracts are not conclusive; the court looks at the reality of the relationship.

> **Key Term: employee**
> An employee is a person who works under a contract of service, subject to the employer’s control and incorporated into the business.
>
> **Key Term: independent contractor**
> An independent contractor is a person who works under a contract for services, running their own business and not subject to the employer’s control.

#### Relationships “akin to employment”

Courts may impose vicarious liability even without a traditional employment contract where, in substance, the relationship and the enterprise-risk factors mirror employment. Indicative factors include:

- the person’s activities are integrated into and for the benefit of the defendant’s business,
- the defendant created or significantly contributed to the risk by assigning those activities,
- the person is not running an independent business of their own,
- some degree of control and oversight exists.

These policy reasons explain findings of liability in institutional settings (for example, residential care contexts). Conversely, the Supreme Court has confirmed that engaging a genuine independent contractor (such as an external medical examiner) will not ordinarily attract vicarious liability.

#### Borrowed employees and dual control

Where an employee is lent to another business, liability may rest with the employer who retained effective control. In rare cases, courts have recognised dual vicarious liability where two undertakings exercise simultaneous control over the tortfeasor’s work. The presumption remains that the original employer remains liable unless effective control has truly shifted.

### 2. Employee Must Have Committed a Tort

There can be no vicarious liability unless the employee has committed a tort. The most common is negligence, but vicarious liability can apply to any tort (e.g., battery, fraud, wrongful detention). If the employee has a defence or the elements of the tort are not made out, the employer will not be vicariously liable.

### 3. Tort Committed in the Course of Employment

The employer is only liable if the tort was committed “in the course of employment.” The courts have developed several principles to determine this.

#### Authorised Acts and Unauthorised Modes

If the employee is doing what they are employed to do, but in a careless or unauthorised way, the employer is usually liable. The classic example is a delivery of fuel where the driver, while performing his authorised task, behaves dangerously (for instance, smoking during delivery). The employer remains liable because the act was an unauthorised way of doing an authorised job.

#### Disobedience to Instructions

If an instruction limits only the manner of performance (how to do the job), the employee may still be within the course of employment despite disobedience. If an instruction defines the scope (what the employee should or should not be doing), breach may place the act outside the course.

A helpful contrast:

- Allowing a child to assist with deliveries, contrary to instructions, but still delivering milk: within course (unauthorised method).
- Giving a lift to a hitchhiker in a company van, contrary to instructions, not furthering the employer’s business: outside course.

#### Prohibited Acts

If the employee does something expressly forbidden, the employer may still be liable if the act was a wrongful way of doing an authorised job (as above). If the prohibited act is outside what the employee was employed to do, the employer will not be liable.

#### Deviations and Detours

The law distinguishes between minor deviations (still within course) and significant departures (“frolic of one’s own”). The question is whether the employee remained engaged, in substance, with their employer’s business.

- Travelling between work sites on paid time is usually within the course of employment.
- A substantial detour for personal errands may take the employee outside it.
- Mealtime or rest breaks can be fact-sensitive: if the employee remains on duty or performing work-related tasks, liability may still attach.

#### Frolic of One’s Own

If the employee is acting outside the scope of their employment (e.g., on a personal errand), the employer is not liable. This concept typically excludes acts motivated by personal vengeance or wholly independent pursuits.

> **Key Term: course of employment**
> Acts done by an employee in the performance of their duties, or closely connected to those duties, so as to make it fair and just to hold the employer liable.

### The “Close Connection” Test

For intentional or criminal acts, the courts use the “close connection” test: was the wrongful act so closely connected with the employee’s duties that it would be fair and just to hold the employer liable?

Judges commonly ask two linked questions:

- What functions or field of activities were entrusted to the employee?
- Was there a sufficient connection between those activities and the wrongful conduct?

This approach has led to liability for intentional assaults by doorkeepers/bouncers and abuse by residential carers where the tort was closely bound to the entrusted role. However, the close connection test does not cover opportunistic wrongdoing entirely independent of work; an employee’s personal vendetta or activities aimed at harming the employer (such as leaking confidential data for vengeance) may fall outside the course of employment.

### **Worked Example 1.1**

A delivery driver is employed to deliver parcels. During a delivery, the driver carelessly reverses and injures a pedestrian. Is the employer vicariously liable?

> **Answer:** Yes. The driver was performing their authorised duties (delivering parcels) in a negligent way. The tort was committed in the course of employment.

### **Worked Example 1.2**

A nightclub bouncer, employed to maintain order, assaults a patron after ejecting them from the club. The assault occurs just outside the entrance. Is the employer vicariously liable?

> **Answer:** Likely yes. The assault was closely connected to the bouncer’s duties (maintaining order and ejecting patrons). The “close connection” test is satisfied.

### **Worked Example 1.3**

A shop assistant, angry at a customer’s rudeness, follows the customer into the car park after their shift and punches them. Is the employer vicariously liable?

> **Answer:** Unlikely. The assault was motivated by personal anger and occurred after work, not in the course of employment. The connection to employment is too remote.

### **Worked Example 1.4**

A milkman’s contract prohibits him from letting others ride on the float. He nonetheless allows a 13-year-old to help deliver milk. The child is injured when the milkman drives carelessly. Is the employer vicariously liable?

> **Answer:** Likely yes. The prohibition concerns how to do the job. The milkman was still delivering milk (authorised task), albeit in a prohibited manner. The wrongful way of doing the authorised job falls within the course of employment.

### **Worked Example 1.5**

An employee at a firm’s annual party, off premises and outside work hours, assaults a colleague. He is the manager who had been addressing staff about business matters and exerting authority. Is the employer vicariously liable?

> **Answer:** Fact-sensitive. If the assault arose from the manager’s misuse of his entrusted authority while addressing staff in a work-related capacity, liability may follow (close connection). If the attack was unrelated social conduct with no link to his role, liability is unlikely.

### **Exam Warning**

> For SQE1, pay close attention to the facts: the employer is not liable if the employee is on a “frolic of their own” or acting for purely personal reasons. However, liability may still arise for intentional or criminal acts if there is a close connection to the employee’s duties.

### Intentional and Criminal Acts

Employers can be vicariously liable for intentional or criminal acts if the “close connection” test is met. This is especially relevant for torts such as assault, fraud, or sexual abuse committed by employees in positions of authority or trust.

- Door security staff using excessive force in the course of ejecting patrons may engage liability.
- Residential carers abusing those in their care have been found to have acted within a close connection to entrusted functions.
- Data breaches or revenge attacks fall outside the course where the employee’s motive is purely personal and antithetical to the employer’s business; vicarious liability is unlikely.

Courts emphasise that the test is not about the mere opportunity to commit a wrong at work. It focuses on whether the role’s functions and the wrongful act are sufficiently connected to make it fair and just to impose liability.

### Indemnity and Joint Liability

If an employer is found vicariously liable, both employer and employee are jointly liable to the claimant. Employers may seek a contribution or indemnity from the employee (i.e., recover damages paid to the claimant) in some circumstances. Whether and to what extent recoupment is “just and equitable” depends on the facts and policy considerations. In practice, indemnities against employees are rare where the employer is insured and the employee is blamelessly following duties; courts are cautious about shifting losses back onto individual workers except in clear breach of contractual obligations to exercise reasonable care.

## **Summary**

| Requirement                 | Employee | Independent Contractor |
| --------------------------- | -------- | ---------------------- |
| Control by employer         | Yes      | No                     |
| Incorporated into business  | Yes      | No                     |
| Bears financial risk        | No       | Yes                    |
| Employer vicariously liable | Yes      | No                     |

The modern approach is not confined to labels; it evaluates the real working relationship, the enterprise risk created, and whether the tort was committed in the course of employment. For intentional wrongdoing, close connection analysis is central: liability is more likely where the entrusted role explains the wrong (e.g., excessive force while performing security functions) and unlikely where the act is an independent frolic.

## **Key Point Checklist**

_This article has covered the following key knowledge points:_

- Vicarious liability holds employers liable for torts committed by employees in the course of employment.
- The distinction between employees and independent contractors is essential; only employees trigger vicarious liability.
- The multiple (economic reality) test considers control, organisation, personal service and who bears financial risk; contractual labels are not decisive.
- Liability can extend to relationships “akin to employment” where enterprise-risk and organisational factors are present.
- The “course of employment” includes authorised acts, unauthorised modes, and some prohibited acts, but not personal “frolics.”
- The “close connection” test is used for intentional or criminal acts and focuses on the connection between entrusted functions and wrongdoing.
- Deviations and detours are assessed by degree; minor deviations may still be within the course, significant personal errands are not.
- Employers and employees are jointly liable; contribution or indemnity may be available, subject to fairness and case facts.

## **Key Terms and Concepts**

- vicarious liability
- employee
- independent contractor
- course of employment

Vicarious liability - Tort committed in the course of employment