Evaluation of Vicarious Liability

teachlawhub
Aug 29
5 min read

Vicarious liability is an important principle within Tort Law that allows one person or organisation to be held liable for the torts committed by another. Most commonly, an employer for the actions of an employee.

Vicarious liability applies when the two elements are satisfied. (Barclays Bank plc v Various Claimants, 2020):

1. There is a relationship of employment or akin to employment making it proper for the law to enforce liability, and;

2. There is a connection between that relationship and the tort committed by the tortfeasor.

General Evaluation of Vicarious Liability

Strict liability can be both fair and harsh

Vicarious liability is justified because employers can be held strictly liable and responsible for the actions of their employees, even where the employer has committed no personal fault.
This can be seen as fair because employers benefit from the activities carried out by their employees. Therefore, it can be argued that employers should also bear some of the risks created by those activities.
However, this approach can also appear harsh. An employer may be held liable even where they did not commit the tort, authorise the employee's actions or personally cause the harm.

Employers benefit from employees' activities

A strong justification for vicarious liability is that employers benefit from the work and activities carried out by their employees.
Where an organisation gains financially or otherwise benefits from an employee's work, it can be argued that it is fair for the organisation to bear the risks associated with that work.
This follows the principle that those who benefit from an activity should also accept responsibility for the risks it creates.

Encourages higher standards

Vicarious liability can also encourage employers to maintain higher standards. The possibility of being held liable gives employers an incentive to properly train employees, supervise their activities and introduce effective procedures and safeguards.
This may help prevent harm from occurring and can improve standards within workplaces and organisations.
However, this argument has some limitations because vicarious liability can still apply even where an employer has taken reasonable care. Therefore, an employer may be held liable despite having effective training and supervision systems in place.

Greater likelihood of compensation

Employers are often in a better financial position to compensate claimants than the individual tortfeasor. An individual employee may be a “man of straw”, meaning that they have insufficient money or assets to pay compensation.
Without vicarious liability, a claimant may successfully prove that they have been harmed but still be unable to recover meaningful compensation because the tortfeasor cannot afford to pay.
Employers and organisations are generally more likely to have greater financial resources or insurance. Vicarious liability therefore increases the likelihood that victims will receive an effective remedy.

Evaluation of ‘the Relationship Test’

For vicarious liability to arise, there must be a relationship between the defendant and the tortfeasor that is capable of giving rise to vicarious liability.

Traditionally, this was an employer-employee relationship. However, the modern law recognises that some relationships may be sufficiently similar or akin to employment, even where there is no formal contract of employment.

Strengths of the traditional tests

The traditional tests of control, integration and economic reality provide a clear and structured framework for deciding whether there is a relationship of employment.
The structured approach can also support consistency, as courts have recognised factors to consider when deciding whether an individual is genuinely an employee.
This allows organisations to assess their potential liability and helps claimants understand whether they may have a claim.

Traditional tests can be too rigid

However, the traditional tests can be criticised for being too rigid and may not reflect modern working arrangements.
Modern workplaces include a wide range of relationships, including economy workers, volunteers and work experience placements. The traditional tests may struggle to deal with these relationships because control and integration are not always clear.
This can reduce the relevance of the traditional tests in today's modern workplace. It may also lead to uncertainty or inconsistent outcomes, as similar roles may be classified differently depending on how the facts are interpreted.

The benefits of the akin to employment test

The akin to employment test allows courts to extend the employment relationship test beyond formal contracts of service and traditional employment relationships. This allows vicarious liability to adapt to modern and changing work structures.
This helps ensure that claimants can still receive compensation even where the working relationship is unusual or informal.
This supports a fair and flexible approach because the courts can consider the reality of the working relationship rather than simply relying on whether a formal employment contract exists.

A lack of certainty

However, the akin to employment approach may blur the boundaries between employment, self-employment and voluntary roles. There is no single definitive test for deciding whether a relationship is one of employment or akin to employment.
This flexibility can promote fairness because it allows courts to adapt the law to complex and modern working relationships.
However, it also reduces certainty and predictability. Businesses cannot always know in advance whether a relationship will be classed as employment or akin to employment, or which factors a judge will consider most important.

Evaluation of the Close Connection Test

Once a relationship capable of giving rise to vicarious liability has been established, the claimant must prove that the tort was committed in the course of employment or was sufficiently closely connected to the employee's role.

The courts have developed different approaches to deciding this, including the traditional Salmond Test and the modern Closely Connected Test.

The Salmond Test provides clarity and structure

The Salmond Test provides a clear legal structure, making it easier to decide whether an employee's actions fall within the course of employment.
The test is also fair to defendants because an employer will generally only be liable for torts committed in the course of employment.
This prevents employers from automatically being held responsible for every action committed by an employee.

The Salmond Test may be too rigid

However, the Salmond Test can be criticised for being too rigid. Modern workplace roles are often less clearly defined, and employees may misuse their position in ways that are connected to their employment.
As a result, the test may fail to reflect modern workplace behaviour and the different ways in which employees can cause harm.
This limitation contributed to the development of the more flexible Closely Connected Test.

Greater flexibility under the Closely Connected Test

The modern test allows liability where the employee's wrongful act is closely connected to their job, even if the act was not authorised. This makes the law more flexible and better able to deal with real-life situations where employees misuse their position.
It recognises that harm can be linked to an employee's employment role even where the wrongful act itself was deliberate or unauthorised.
This is particularly important because vicarious liability may apply to intentional torts where there is a sufficient connection between the employee's role and the wrongdoing.

Reduced certainty under the Closely Connected Test

Although the modern test provides greater flexibility, it reduces certainty because the phrase “closely connected” is not clearly defined. Different judges may interpret the connection between an employee's job and their wrongdoing differently.
This can lead to inconsistent outcomes and make it difficult for businesses to predict their potential liability.
Therefore, while the test allows courts to achieve greater fairness in individual cases, it can come at the cost of certainty and predictability.

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Evaluation of Vicarious Liability

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