The English law may hold a person responsible for the misconduct of another, even though he himself is not at fault (an instance of strict liability), which is termed as vicarious liability. It is liability imposed on an employer to a third party simply because a tort committed by a servant acting in the course of employment resulted in damage. The reason vicarious liability came into law around 1700s can be seen as the increasing hazards caused by employees during their course of employment which necessitated some kind of responsibility in order to compensate the victims.
Since then, the courts have shown great emphasis to expand the doctrine of vicarious liability which is regarded as a satisfactory way of providing payment of compensation to injured claimants without imposing excessive burdens on negligent tortfeasors. It is this approach of the courts that has been challenged: Is vicarious liability the best compromise that could have been reached between the tort victims and the businesses?
Vicarious liability although being a firmly established legal principle in common law, it requires some justifications in order to understand if it is the best solution between the tort victims and business. This need probably arises from the departure from the general principles of law of tort that (i)a person should only be held liable for his own acts and omissions; and (ii)where he has been at fault. In other words, while imposing vicarious liability the employer is made to pay even though he is totally free from blame. There are some plausible explanations to justify this departure from these two leading principles of the law of tort.
Regarding the first principle, it is suggested that a person is not liable for his acts or omissions but he is liable to pay damages for the results of his acts or omissions, the law needing to decide whether there is sufficient responsibility for the results of a person's acts to justify liability. For example, in the case of vicarious liability, it is necessary to show what the employer did or omitted to do results in him being sufficiently responsible to be held liable.
Secondly, regarding the fault principle, the damages can bee seen as compensatory rather than penal, insurance against liabilities means that the person who pays the damages is not generally at fault and finally it must be remembered that some costs of accidents are paid by the taxpayers and therefore a specific class of society bears the burden not individuals in many cases2. These explanations of the legal principles are not sufficient justifications for vicarious liability and the sole purpose was to show why departure from the two legal principles of tort law does not mean that imposition of vicarious liability is unjust. The doctrine of vicarious liability has not grown from any legal principles3 and indeed has its basis on a combination of policy considerations. It is the justifications of these policy considerations and their counter-arguments that will in turn be analysed now.
Undoubtedly, the main policy reason for imposing vicarious liability is the desire of the judges to compensate the tort victims when they are injured by a person with limited resources. Therefore the employer is made liable because "his pocket is deeper than the employee's"4. Employers and corporations are more likely than individual defendants to have sufficient resources out of which to meet tort claims and are also more likely to be sufficiently insured.
Many employers are large companies and the loss can be transferred to the consumers through higher prices or profits can be lowered and therefore this would result in spreading the cost very thinly over a number of people rather than putting it on the shoulders of an individual5. This principle of loss-distribution has been widely held to be a good justification for vicarious liability. The fact that the money does not come directly out of the employer's pocket and the cost of the liability being distributed over the community over some period of time proves this justification to be a good one.
There is also a fairness-based justification: the employer gets the benefit of the work and should therefore bear the burdens of it. Moreover, it has been pointed out that since the employer is in control of his employees, he should be responsible for their acts. There has been a belief that the fact that one person has some degree of control on another justifies the liability imposed on him. The deterrence theory has also been put forward which suggests that imposition of vicarious liability encourages the employer to take care to prevent work practices that could result in accidents.
Since the aim of business enterprises is to reduce costs and produce profits and since liability in tort is a cost, it should be avoided where possible. The particular act carried out by the employee may be an expression of his free will, however, the activity in which he is engaged reflects the will of the employer. For example in the case of Jefferson v Derbyshire Farmers Ltd8, a boy was told by his employer to fill some tins with petrol and while he was filling the tins, he lit a cigarette causing serious damage. The employers were held vicariously liable since the act which caused the damage was an act done while he was engaged in his employer's instructions.
Another ground which had been put forward in justification of vicarious liability was that it provides a defendant where it is hard to identify the individual person who has caused the damage. In cases where there is more than one possible negligent person and all of them are servants of the employer, vicarious liability enables the claimant to claim compensation. The above points are the main arguments put forward in favour of vicarious liability.
However, it is essential to consider the impacts of vicarious liability on the defendants, in this case the business enterprises. Employers are regarded as being more likely than individuals to meet large tort claims. However, it can always be the case that even large corporations can be pushed into serious financial difficulties by tort claims of significant size.10 When considered the social impact of the liquidation of large corporations, imposition of vicarious liability seems to be undesirable. This problem has been solved by now having the possibility of corporate reorganisation plans which basically secures compensation for tort victims and at the same time enables the tortfeasor to continue its business without excessive burdens in cases of large tort claims.
Another problem with vicarious liability is that it is a rule which works badly when the employer is a small business or a private individual rather than a big corporation. Considering the fact that even large corporations can have financial problems when confronted with large tort claims, individual employers can easily be forced into bankruptcy. The explanation is probably that in any case there will be two potential defendants (i.e. the employee and the employer) and the claimant will sue the one who can easily bear the liability regardless of him being the employer or the employee.
The traditional grounds given above in support of vicarious liability may be insufficient justifications when they stand alone but when they are all together, they give a perfect reason for the imposition of the doctrine. Judges have always felt that there is something exceptional with vicarious liability and tried to justify the doctrine in different ways expressing their own justifications each time.
However, it is well-known that they all accept the fact that vicarious liability is a necessary part of the law of torts and it promotes justice in most cases. When considered its importance in daily life in modern society, without vicarious liability the tort system would remain unresponsive to many tort claims and therefore leave innocent claimants uncompensated as tortfeasors who are neither insured nor have enough financial resources are not worth suing. Therefore, it can be concluded with sufficient evidence and justifications that vicarious liability is the best compromise English Law offers for tort victims and the businesses.