Topic 7 vicarious liability Notes PDF

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Vicarious liability and non-delegable duties Notes Topic

Concept

Rule/Requirements

Loss distribution mechanisms

overview

Processes where the loss is shifted to another entity, who isn’t at fault, but generally who has deeper pockets to be able to foot the bill arising from a claim for damages e.g.  insurance  vicarious liability  non-delegable duty of care  joint and severable liability  proportionate liability

vicarious liability

definition

‘Vicarious liability is a species of strict liability. It is not premised on any culpable act or omission on the part of the employer; an employer who is not personally at fault is made legally answerable for the fault of his employee. It is best understood as a loss-distribution device…’

Case/Statutes

Lister v Hesley Hall [2002] 1 AC 215

Notes

I.e. employers are held responsible for torts committed by employees in the course of employment (eg sexual assault at boarding school)

strict liability — that is, liability without proof of fault. A person can be vicariously liable for the negligence of another no matter how careful the person was in all relevant matters, such as choosing and supervising the other. the vicarious liability of the employer is additional to the ‘primary’ liability of the employee for negligence history

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In the 19th C masters were responsible for the acts of their servants. Servants were engaged by their employers under a contract of service

But no consensus on if it’s the employer taking responsibility (servant’s tort), OR the employee’s actions are attributed to employer (master’s tort) (so the tort is committed by the employer)…

In more recent times, relationship transformed to employer/employee relationship Servant’s tort theory is preferred though If the employee is immune from liability for whatever reason, the employer cannot then be held liable. The tort is the employee’s so if immune, can’t be transferred to employer Tests

Three Elements

1. A relationship in which vicarious liability is recognised. 2. Acting within the scope of employment. 3. Act or omission of the wrongdoer must have been wrongful

1. Employee -Employer Relationship

Not enough for the parties to simply assert that they are in an employee/employer relationship – you can do work for payment without being someone’s employee (i.e. getting a taxi home doesn’t make the driver your employee, but a chauffeur would be) Difference between employee and contractor can be defined as ‘contract OF services’ versus ‘contract FOR services’

Cowell v Corrective Services Commission of NSW (1988) 13 NSWLR 714

General rule is that there is vicarious liability for employees, but not independent contractors.

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Apart from the relationship of employer and employee, vicarious liability can also arise out of the relationship between ‘principal’ and ‘agent’. The concept of ‘agency’ is a vague one, but it rests on the idea that a person who does something at the request, and for the benefit, of another does it as agent for that person. Control of Employees Work (control test) If employer controlled what was done and how, was an employee relationship/of service. Works fine for unskilled work but not skilled (where worker has more expertise than employer) SO – control test has been modified.  Control NOT the sole criterion for employment.  Other relevant matters include: the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provisions, the deduction of income tax and the delegation of work by the putative employee.  Extra-hazardous activities doctrine has no place in Australian law.  duty to ensure a safe system of work Enterprise Test Under a contract FOR service, the work is done for the contracting business but is NOT integrated into it – is just an accessory to it. Courier was subject to several conditions of control test including wearing uniform, restricted annual leave, deducted insurance premiums etc, and bike is inexpensive equipment (unlike truck etc) so was considered to be an employee = vicarious liability

Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 461 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16

Vicarious Liability Extra-hazardous activity: non-delegable duty - Extra-hazardous activities doctrine has no place in Australian law. General duty of care - owed a duty to ensure a safe system of work

Hollis v Vabu (2001) 207 CLR 21 Sweeney v Boylan Nominees Pty Limited (2006) 226 CLR 161

COMPARED TO:

2. scope of employment

Respondent did not control the way in which the mechanic worked. Mechanic supplied his own tools and equipment and skills. Mechanic was not presented to the public as an emanation of the respondent = Mechanic was an independent contractor Employer is only liable for torts committed in the course of employment – not those committed ‘on a frolic of their own’

Joel v Morison (1834) 6 Car & P 501

Scope is NOT limited to just a particular task – includes those that are reasonably incidental to what the person was employed to do e.g. data entry can also include taking messages etc.

Chaplin v Dunstan Ltd [1938] SASR 245

 Authorised act = Vicarious Liability It’s not the precise terms that count - so if the employer sanctions the doing of something, they are liable even if the employee doesn’t do it exactly as the employer specified UNLESS it is so different to what was authorised that it can’t even be considered an unauthorised mode.  Authorised act in an unauthorised manner = Vicarious Liability Drunk bus driver. Driving bus as part of her employment, even though expressly told by employer not to drive while drunk. Doesn’t alter that she was doing what she was employed to do.

Bugge v Brown (1919) 26 CLR 110

Phoenix Society Inc v Cavenagh (1997) 25 MV 143

I.e. has to be SO different it’s essentially not the same thing.

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3.Wrongful conduct

Unauthorised act= No Vicarious Liability Barmaid threw glass at customer. Not connected with responding to customers as it was not authorised (not even as an improper method of response) and not incidental to any of the tasks she was required to do.

Deatons Pty Ltd v Flew (1949) 79 CLR 370

Criminal conduct - TEST is whether there is sufficient connection between employee’s criminal conduct and what they were employed to do – i.e. responsibilities that form part of the job. Can’t just be teaching as that always involves care in a broad sense – needs to be a situation where there is a level of power and intimacy in the teacher/student relationship - ‘The degree of power and intimacy in a teacher-student relationship must be assessed by reference to factors such as the age of students, their particular vulnerability if any, the tasks allocated to teachers, and the number of adults concurrently responsible for the care of students.’

Lister v Hesley Hall [2002] 1 AC 215 NSW v Lepore (2003) 212 CLR 511

employers are held responsible for torts committed by employees in the course of employment (e.g. sexual assault of children under care at boarding school) employee used or took advantage of the position that their employment placed them in relation to the victim (i.e. provides the ‘occasion’ for the tortious act) – puts it within scope of the course of employment and therefore vicarious liability

Vicarious liability is assessed based on ‘the pursuit of the employer’s interests or intended performance of the employment contract OR where the conduct is done in execution of the authority gave the employee. ‘Not everything that an employee does at work, or during work hours, is sufficiently connected with the duties and responsibilities of the employee to be regarded as within the scope of the employment.’ Employers indemnity

if an employee causes damage to a third party, and the employer is ordered to pay the third-party money to compensate (since the employer is vicariously liable for the actions of the employee), an indemnity clause in a contract could require the employee to reimburse the employer. Abolished in NSW expect for cases of ‘serious and wilful misconduct’ (and employer is required to indemnify the employee)

Non-delegable Duties

definition

Lees v Dunkerly Bros [1911] AC 5 s3 Employees Liability Act 1991 (NSW)

If liability insurer is involved, they can enforce the right of indemnity in the employer’s name (doesn’t happen often though) but ONLY IF guilty of ‘serious and wilful misconduct’.

Insurance Contracts Act 1984 (Cth)

Serious and wilful misconduct = truckie who drove for 16 hrs straight and drinking alcohol (0.11) and fell asleep.

Boral Resources (Qld) Pty Ltd. v Pyke [1992] 2 Qd R 25

a duty of care owed towards a group of people which cannot be assigned to someone else. a duty ‘to see that care is taken’ – is imposed on the Employer ONLY

New South Wales v Lepore (2003) 212 CLR 511

This means that when one owes a non-delegable duty towards another, he has a duty not only to take reasonable care himself, but ensure that others take reasonable care (since he cannot discharge his duty by 'delegating' or transferring it to others). E.g. welding near flammable material requires a higher level of care to be in place and required of others.

Burnie Port Authority v General Jones P/L (1994) 179 CLR 520

Based on implied contract term that the employee will not perform duties in such a way as to cause the employer to be held vicariously liable

As a result, a defendant who owes a nondelegable duty will be liable for the wrongdoing of others even if they are independent contractors.

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Elements

1. Control/responsibility - the defendant must have had some control over the plaintiff or the plaintiff's property. E.g. Employer/employee; Hospital/patient; School/pupil 2. Vulnerability - the defendant must have been unable to protect himself and was forced to rely on the defendant to ensure that care had been taken. 3. Criminal conduct is exempted - the defendant will not be liable for harm caused by someone else's criminal conduct. vicariously liable for the negligence of those who provide health-care services in its name, regardless of whether the provider is an employee or an independent contractor of the hospital

Breach

Kondis v State Transport Authority (1984) 154 CLR 672; Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1

‘Responsibility for appliances, premises, system of work and employee has no choice but to accept and rely on employer’

Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 New South Wales v Lepore (2003) 212 CLR 511

Control/responsibility - "[T]he nature of the relationship of proximity gives rise to a duty of care of a special and 'more stringent' kind, namely a 'duty to ensure that reasonable care is taken'." "It will be convenient to refer to that common element as 'the central element of control'.

Burnie Port Authority v General Jones P/L (1994) 179 CLR 520

Vulnerability - Viewed from the perspective of the person to whom the duty is owed, the relationship of proximity giving rise to the non-delegable duty of care in such cases is marked by special dependence or vulnerability on the part of that person."

Burnie Port Authority v General Jones P/L (1994) 179 CLR 520

Intentional/criminal conduct - A non-delegable duty does not extend to a duty to prevent intentional or criminal wrongdoing. "Furthermore, although deliberately and criminally inflicting injury on another person involves a failure to take care of that person, it involves more." "Intentional wrongdoing, especially intentional criminality, introduces a factor of legal relevance beyond a mere failure to take care."

New South Wales v Lepore (2003) 212 CLR 511

Cannot be breached by a deliberate and intentional act e.g. sexual assault by a teacher. Can only be breached if someone fails to take reasonable care

New South Wales v Lepore (2003) 212 CLR 511

Cases where there could be non-delegable duty should be treated as though they are vicarious liability cases.

S5Q Civil Liability Act 2002 (NSW)

e.g. where a person is in control of the premises and who has taken advantage of that control to introduce thereon a dangerous substance.

E.g. Lepore might’ve been decided differently. Workers Compensation

Employer/empl oyee: Duty of Care

points

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Each jurisdiction has workers’ compensation legislation No fault compensation In all jurisdictions other than NT and SA can also claim common law damages. Restrictions on damages

Employers owe employees a duty of care (established category of case) Scope of Duty:  Safe place of work AND  Safe system of work AND  Adequate plant and equipment

Wilkie v Astra pharmaceuticals

Principal only needs to provide a Safe system of work to an independent contractor...