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What does vicarious liability mean?

 

The term vicarious liability refers to the situation where one person is held responsible for a tort committed by another. As example, in the case of Bugge v Brown (1919) the defendant who was a farmer, and employed Mr Winter as a servant to work on the farm. Winter was entitled to a cooked meal as part of his remuneration. The defendant on one particular day gave to Winter raw meat, and told Winter to go to a specific property to cook the meat in a frying pan. Winter did not follow the instruction, and instead lit a small fire to cook the meat. The fire got out of control and spread to the neighbouring property and burnt it out. The owner of that property brought a claim against the defendant (Winter’s employer). The question for the court was whether the defendant was liable for Winter’s action. The court held the defendant had control and responsibility of the work done by Winter, which confirmed that Winter was an employee. The court held the defendant was vicariously liable for Winter’s conduct. 

 

Vicarious liability may arise in various circumstances for acts or omissions by one party. However, the main areas for vicarious liability include: employer and employee; principal and agent; partner and co-partner. In respect to employment, the common situation is that the employer is responsible for the negligence of the employee and is also liable if injury is caused to another person during the employment engagement. In regard to the principal and agent, the principal is liable for their agent who acted within the scope of their actual authority. 

 

To succeed in a claim against a defendant for vicarious liability of another person who committed the wrong, the plaintiff needs to be able to demonstrate that the party who committed the wrong, ‘tortfeasor’, was a servant or agent of the defendant, whom the claim is brought against. This is normally provided by the plaintiff by demonstrating that the defendant paid the alleged servant daily or weekly wage or a yearly salary, and had the power to hire or fire the servant and tell the servant how to do their job. 

 

In Hollis v Vabu Pty Ltd (2001) the defendant, Vabu, conducted a courier business delivering parcels and documents called, ‘Crisis Couriers’. The plaintiff, Hollis, was struck by a courier wearing a jacket with the name ‘Crisis Couriers’ in December 1994. The plaintiff’s knee was injured. The plaintiff brought a claim against the defendant for the injury. The question for the court was whether the courier who injured the plaintiff was an employee of the defendant. The court held the courier was an employee, because the courier was in pursuit of his employer’s interest with delivering parcels and documents, and the defendant, Vabu, was held vicariously liable for the plaintiff’s injuries. 

 

To determine whether or not a particular person is a servant of another, the main test is the right of one person to control the acts of another. This means the ability to tell the other person not only what to do but how to do it. Even if the master does not tell the servant how to do the job, what is important is that the master does have the authority to tell the servant how to do the work. A supplementary test is integration into the enterprise - that is, to what extend is the ‘worker’ “part and parcel” of the enterprise.  

 

Independent contractors do not have a vicarious relationship with the party that has contracted them. An independent contractor is a party who is engaged by another to complete a task without becoming a servant of that other party.

 

In Stevens v Brodribb Sawmilling Company Pty Ltd (1986) an owner of a sawmill engaged various contractors and truck drivers for logging operations. The plaintiff, Steven, was a truck driver who was injured when a log rolled on to him. At the time of the injury, Gray, a bulldozer driver was loading logs on to trucks, when one of the logs rolled and hit Steven. Steven raised a claim against Gray and the company for vicarious liability. The question for the court was whether Gray who was an employee and if the company was variously liable as the employer. The court held neither Gray or Steven were employees and the company was not vicariously liable for Steven’s injury.  The court held: 

 

… the existence of control, while significant, is not the sole criterion by which to gauge whether a relationship is one of employment … it is merely one of a number of indicia which must be considered in the determination of that question. 

 

The court held in the Sawmill case that there are many relevant factors that need to be considered, which include: the ability of the parties to negotiate payment; the hours of work required and negotiable position; the provision of maintenance of equipment; and the deduction of income tax and who deducts that tax. 

 

The test to determine control, whether a party is an employee, is called the ‘indicia test’, this test is based on the factors raised above.

 

One fact the Sawmill case raised, was that a common law duty of care may be owed by the engaging company. 

 

In Zorom Enerprises Pty Ltd (in liq) v Zabow [2007], Zabow and his friends were attending the hotel Clovelly. Two of Zabow’s friends were evicted from the hotel by security. Zabow joined the two friends outside the hotel. Zabow at some point outside the hotel was struck on the head by a security guard without warning and suffered severe injuries. The security company that provided the security guard was held vicariously liable for its employee, as the employee was acting in pursuit of the employer’s interest, under the contract of employment and the authority given by the employer to act. 

 

In Zakka v Elias [2013] a solicitor with a restricted practising certificate was employed by a law firm. The solicitor acted for Mr Zakka in various transactions without her employers knowledge. Mr Zakka was related to the solicitor by marriage but not closely. Several transactions of Mr Zakka went bad, and he sued the solicitor and law firm for negligent advice provided. The question for the court was whether the solicitor was acting within the scope of her employment contract. The court held the law firm was not vicariously liable for the solicitors actions, which the court said: 

 

… a clear case of solicitor engaging in frolic of her own or at her own whim, to adopt the terminology used in the authorities. It is not an unauthorised mode of committing an unauthorised act. It is an act Ms Rahe was not authorised to take as an employed solicitor of the firm. There was not, in my opinion, a sufficient connection between that unauthorised conduct and Ms Rahe’s employment to bring this within the scope of the doctrine of vicarious liability as explained in Lepore and Withyman. The fact is that Ms Rahe deliberately acted in such a manner as to prevent such connection. 

 

This case raises the point the solicitor, Ms Rahe, acted in her own capacity and not that of the employers. 

 

There are various characteristics of vicarious liability that need to be considered when a claim is to be raised against an offending party. The prudent step before allegations are raised, is to get that legal advice to protect your legal rights and interests. 

 

The comments in the aforementioned do not constitute legal advice and are general in nature, and if legal advice is required please contact: John Melis at Legal AU Pty Ltd (03) 9999 7799 www.legalau.com 

 

Legal AU Pty Ltd Lawyers are “Liability limited by a Scheme approved under Professional Standards Legislation.”