JURISPRUDENCE

VICARIOUS LIABILITY

SUBMITTED BY: Kanish Kunal

SUBMITTED TO: Ms. Nupur Khanna

Roll NO. – 14
 ACKHOWLEDGEMENT

My Jurispurdence Project was based on the topic “Vicarious liability”

I would really like to thank Ms. Nupur Khanna (Asst. Professor Law, CAIL) for
giving me such wonderful topic to research on and prepare a research paper. She also
guided me throughout the process of the making of the draft.

I would also like to thank God for giving me strength to complete my final draft. I
would like to thank my mother for encouraging me to work on the topic. Last but
not the least I would like to thank my friends who helped me to find more on the
topic and prepare a research paper of my best efforts.

Kanish Kunal
.
 INTRODUCTION
This thesis provides a detailed explanation of the history of the law of vicarious liability in
the United Kingdom, including its application in recent cases including Mr A M Mohamud v
WM Morrison Supermarkets plc1. It also critically analyses how the application of vicarious
liability precedents may have led to unjust decisions. The enquiry will address whether the
case of Mohamud was wrongfully decided and, if so, what implications this has for the future
of vicarious liability and the parties to such a claim. As the first chapter in this study will
focus on the history of vicarious liability law in the UK, the research will trace the
development of this legal doctrine from early cases such as Joel v Morison 2 to those being
decided now. As will be shown, as the nature of the relationship between employer and
employee has changed, so too have the tests to determine if an employer is liable for the tort
committed by their employee. The research will explore the ‘broad risk’ principle from
Hamlyn v Houston3, where the law stands with independent contractors (Honeywill v
Larkin)4, the Salmond test and others. The first chapter will discuss the three elements that
need to be proven by the claimant; those being that a tort/offence has been committed, that it
was committed by an employee and in the course of employment. The first two elements will
not be discussed in great detail as there would be a risk of straying too much into criminal
and employment law (the focus of this piece is tort law). The third element will be discussed
in much greater detail, with focus on cases such as Lister v Hesley Hall which really changed
the way in which the courts perceived ‘course of employment’ – rather than consider whether
the employer allowed employees to carry out similar acts, the Court instead started to
consider whether the job offered the employee the opportunity to do such things. This
research will also discuss the impact that Lister had on cases which followed: as shall be
demonstrated, some judges accepted the change, whereas others questioned it. For example,
where Giliker questions the Lords’ lack of consistency when creating the ‘close connection’
test, Lord Dyson openly supports it in Mohamud. Once the history of vicarious liability has
been discussed, with particular focus on the ‘course of employment’, the thesis continues by
discussing the recent case of Mohamud in the second chapter. With the use of relevant pre-
existing research, the case is analysed to discover what the decisions mean for the present and
future of the doctrine of vicarious liability law and the changes it represents. At this point the
recent case of Cox v Ministry of Justice is critiqued in conjunction with Mohamud in this
comparative doctrinal analysis. The importance of vicarious liability lies in the fact that the
recent Mohamud case has brought into question whether the tests and precedents used over
hundreds of years to determine if an employer is vicariously liable are in fact just. If the
Mohamud case could set a new precedent for deciding if an employer is liable then this could
render all previous tests, and all previous decisions, obsolete. Could that then mean that
employers would need to change the way in which they select and train new employees? As
Mohamud and Cox are relatively recent cases, the range of sources available to research is
1
[2016] UKSC 11
2
(1834) 6 C&P 501, [1834] EWHC KB J39
3
[1903] 1 KB 81
4
[1934] 1 KB 191
slim. However, by comparing the available research with the countless sources on vicarious
liability prior to the decisions of the two cases, the thesis provides an assessment as to
whether the correct way of determining the employer’s vicarious liability is the traditional
way or the new way. There may even exist a third way which has yet to be used by the courts.
Once this has been completed, a prediction can be made as to the future of vicarious liability;
how will/should future cases be decided? Previous research has indicated that it is already
possible to assess how the future of vicarious liability will look. Per Lord Oliver in Caparo
Industries Plc v Dickman5 , ‘ I think that it has to be recognised that to search for any single
formula which will serve as a general test of liability is to pursue a will-o'-the wisp’ . The fact
that this 11 quote was made 60 years ago, and the judiciary’s continuing confusion, indicates
that questions will continue to be raised as to the justness of the law in cases such as these
will continue to be raised, as they were in Mohamud.

METHODOLOGY
This thesis aims to analyse the historical developments of vicarious liability law and
investigates what the future of the doctrine may look like following significant developments
in recent case authority. The research undertaken is secondary and contains no empirical
research. Rather, existing research materials are analysed and compared in answering the
question asked of this thesis. Research was undertaken in various different formats, including
primary materials such as case reports, and secondary sources such as journal articles, texts
and existing doctrinal research. Key case authority, which previously held the greatest
importance, have been analysed using academic commentary in articles to assess opinion and
to develop an understanding of the scale of impact the cases have had on the law. The starting
point for the research was an overview of the law and legal tests required to substantiate the
holding of a principal vicariously liable for the torts of another. It then developed to
exploration of key cases, with examination of the existing academic criticisms of the
decisions. Additional research was undertaken into recommendations from the authors of the
journal articles used or cases which were used in the decisions of the initial cases of interest.
Comparison was also made between articles discussing the same topic or case but at different
times. For example, comparisons were made between opinions of academics on the Lister
‘close connection’ test from the time it was created and those made now.

5
[1990] 2 A.C. 605
 THE HISTORY OF VICARIOUS LIABILITY LAW IN THE UK
LEADING UP TO 2016

Vicarious liability law, in reality, dates back to medieval times. However, the main
developments considered in this research will be over the past 200 years. This chapter aims to
provide a detailed recap of those developments; expressing their importance and criticising
their effectiveness. The chapter is structured into three parts: the requirement of a tort/offence
being committed, the various tests used to determine both employment status and the course
of employment, but the heaviest weighting will be given to the course of employment as this
is the area which has caused the most disputes and has been subject to recent and significant
change. However, before assessment of the test establishing the vicarious liability of a
principal is considered, it is worth explaining the justification of the doctrine, which has been
described as one of ‘rough justice and social convenience.’

JUSTIFICATIONS FOR THE IMPOSITION OF VICARIOUS

LIABILITY
As Neyers6 points out, there are various justifications for the imposition of vicarious liability.
The original justification is control – the employer controls the employee’s activities and,
hence, should be liable for their tort. However, Atiyah noted:

‘control cannot be treated as either a sufficient reason for always imposing liability, or as a
necessary reason without which there should never be vicarious liability. Control has never
per se been a ground for imposing vicarious liability, e.g., a parent is not liable for the torts of
his children, a superior servant is not liable for the torts of subordinate servants,
schoolteachers are not liable for the torts of their pupils and so forth. Conversely the absence
of control -although at one time thought to preclude.

vicarious liability in the case of skilled and professional servants — is today not a serious
obstacle to such liability.’7

Therefore, the control argument is inadequate. The second possible justification is

compensation/deeper pockets - the employer will, in most cases, be more able to afford the
compensation costs. However, there are three main reasons why this explanation is not
adequate –

1) it does not explain why the employer specifically would be the best person to compensate
the victim – they could be adequately compensated by another source,

2) it does not allow for a distinction between employees and independent contractors. Here
we may look to Flannigan, who stated that ‘generally speaking, an employer will be richer...
6
J. W. Neyers, ‘A theory of vicarious liability’ (2005-6) 43 Alberta Law Review 287
7
P.S. Atiyah, Vicarious Liability in the Law of Torts (London: Butterworths, 1967)
than the workers he employs, whether they are servants or independent contractors. That
being so no distinction ought to be made between servants and independent contractors for
the purposes of vicarious liability.’ The final reason is

3) it doesn’t explain the two elements that a tort must have been committed by an employee
and in the course of employment. Therefore, this argument, too, is not adequate. The third
justification is deterrence – this comes in two forms – employer and employee deterrence.
Under employer deterrence the law is justified by making the employer liable in the name of
reducing accidents. However, this theory negates the ‘vicarious’ aspect of vicarious liability
and does not explain the need for an employer/ employee relationship. However, in Bazley it
was said that: ‘beyond the narrow band of employer conduct that attracts direct liability in
negligence lies a vast area where imaginative and efficient administration and supervision can
reduce the risk that the employer has introduced into the community. Holding the employer
vicariously liable for the wrongs of its employee may encourage the employer to take such
steps, and hence, reduce the risk of future harm.

Employee deterrence is based upon the idea that they rarely have wealth and may not be
identifiable in some cases. However, this theory rarely holds up as the employers can make
the changes themselves and this does not work if the act is already a crime – ‘If the criminal
law will not deter the wrongdoer there seems little deterrent value in holding the employer of
the offender liable in damages for the assault committed.

The fourth justification is loss-distribution, where by an employer can spread the cost of
compensation between insurers and customers . Although, this theory does not 19 explain the
imposition of vicarious liability where costs cannot be spread – such as with charities. We
must ask with this justification; why can the costs not be spread through the government or a
scheme of social insurance? This justification could also include independent contractors,
which we know vicarious liability does not do, and it does not explain the need for a tort to be
committed, as well as in the course of employment. The fifth justification is enterprise
liability, as was brought up in Mohamud. The first justification for enterprise liability is,
essentially, the benefit and burden principle. The second is the creation/exasperation of risk
by the employer. However, enterprise liability does not explain when charities are found
liable, it does not explain the requirement that an individual is an employee and that the
compensatory amount is unlimited. The final justification is all of the previous justifications –
mixed policy. However, this justification is questionable as some of the rationales are
inconsistent and many of the elements are still difficult to explain. Therefore, even though
there are several

justifications for the imposition of vicarious liability, none are flawless and all lead to,
arguably, more questions than they answer. Having outlined the justification for the
continued presence of the doctrine in English law, we return to the question as to the tests that
must be satisfied to establish the potential liability of the principal. One of the earliest
influential cases in vicarious liability is the case of Dyer v Munday . In this case, Lord Esher
summarised vicarious liability in the following way: ‘if, in course of carrying out his
employment, the servant commits an excess beyond the scope of his authority, the master is
liable’ . This may appear to be a relatively outdated statement, however, its basis is still very
much relevant to English tort law in 2017. Previous case authority was based on the
relationship between masters and their servants. These are not the same as the current
incarnations of employers and employees, but it is interesting to note how the law operated in
the formation of the doctrine – i.e. in the 18-1900s. In 1922, Dyer, in commenting on masters
and servants, made reference to Dunn v Reeves Coal Yards Co., 8 in which a coal mine owner
employed someone to transport the coal, the driver subsequently ran over the claimant’s son
and the claim for recovery against the mine owner employer was allowed. At that time, the
general view was that, if an individual was paid for their work or materials which they
provided, they were an independent contractor, and if not an independent contractor then they
were a servant. There were, however, occasions when an individual could be paid and still be
classed as a servant. Clearly, this is no longer the view in today’s society. However, many of
the historical tests created still hold strong. Independent contractors are those who are in
business of their own accord – they pay their own tax and national insurance and are
responsible for themselves. They are deemed to carry their own insurance and therefore an
individual who hires them (as temporary employer) will not be vicariously liable for their
torts. In any vicarious liability case, there is a tripartite test to establish liability, these are:

1) a tort or offence has been committed,

2) the tort/offence was committed by an employee, and

3) the tort/offence was committed in the course of the employee’s employment. Each of these
elements shall be discussed individually with reference to relevant case law and, where
relevant, statute. The third element is the most important as it has been the cause of the
greatest contradiction in case law and hence shall be discussed in greater detail than the first
two. The course of employment discussion is one that is central to this thesis, however, to get
to the point of that discussion we must first look at the other two elements.

REQUIREMENT ONE - TORT/OFFENCE COMMITTED BY AN

EMPLOYEE
The first element which the claimant must prove to establish vicarious liability is that a tort or
offence has been committed. This criterion was discussed in the case of Imperial Chemical
Industries Ltd v Shatwell9 where two brothers, certified shot firers employed by ICI, were
injured due to their own negligence. One of the brothers brought a vicarious liability claim
against their employer for the injuries caused by the other brother. This claim failed in the
Court of Appeal as the brothers were under a statutory duty to only test the circuit if they had
sufficient wire to be sheltered at a safe distance under regulation 27(4) of the Quarries
(Explosives) Regulations 1959. The brothers were held to have accepted the risk of injury
and therefore were held to be responsible for their own injuries. The criterion requiring a
tort/offence to be committed was raised in this case as the brothers were personally under a
statutory duty and, in breaching that duty, an offence was committed. The first criterion

8
[1895] 1 QB 742
9
[1965] AC 656
required to establish vicariously liability is arguably the easiest to establish. The second and
third elements may be considerably more difficult to prove. Employment status is a
continually evolving and dynamic concept (for instance the concept of ‘worker’, an EU-based
construct, may end following the UK’s withdrawal from the European Union) and is subject
to many external vitiating factors.

REQUIREMENT TWO - TESTS FOR EMPLOYMENT STATUS

This test shall begin by defining the difference between a contract of services and a contract
for services. A contract for services is one held between an employer and an independent
contractor. As will be shown, this type of contract will not be one that brings vicarious
liability. A contact of services is one held between an employer and an employee. In earlier
cases, where the relationship between the employer and employee was questioned, the courts
used a test of control. In the case of Yewens v Noakes 10, Bramwell LJ stated that ‘a servant is
a person who is subject to the command of his master as to the manner in which he shall do
his work’ . The focus, when considering how much control the employer has, is on what type
of work the employer has asked for and if they have specified how it is to be done. If harm
ensues, and the employer was found to have sufficient control, the courts will generally find
the employer to be the causal link and therefore vicariously liable. The ‘control test’ was also
considered in Honeywill v Larkin , in relation to independent contractors, in which Slesser LJ
emphasised that: ‘It is well established as a general rule of English law that an employer is
not liable for the acts of his independent contractor in the same way as he is for the acts of his
servants or agents, even though these acts are done in carrying out the work for his benefit
under the contract’ . However, as many trades have become more specialised, this control test
has ceased to be used in isolation, yet it continues to be an aspect of the leading authority on
establishing employment status. Many employers do not necessarily have the skills to instruct
an employee on how to do their job. Lord Reed summarised this effectively in Cox v
Ministry of Justice by stating that the control test would not be appropriate ‘if one thinks for
example of the degree of control which the owner of a ship could have exercised over the
master while the ship was at sea’ . Not only has the relationship between employer and
employee changed to make the (isolated) control test irrelevant, the nature of modern
employees has also changed. Mackay discusses ‘temporary’ employees and refers to them as
‘gig workers’. He uses Uber drivers as an example of these particular workers. In the modern
economy, these forms of worker are growing drastically in size, but where do they stand in
the worker/employee argument? This point was raised back in 1990 by McKendrick , and
referred to in the English Province case , where he remarked: ‘The labour market in Britain is
presently undergoing significant structural change. The principal change is a rapid increase in
new, flexible forms and patterns of work which depart radically from the standard
employment relationship whereby an employee works regularly (that is, full-time) and
consistently for his employer under a contract of employment.’ This statement is reflected in
10
(1881) 6 QBD 530
the creation of temporary jobs, such as Uber drivers who work as few or many hours as they
wish, and one-off handy men who can work for as little as one hour once a year to a regular
forty-hour week. Mckendrick continues: ‘The primary significance for tort lawyers lies in the
fact that, owing to the flexibility, lack of continuity and irregularity of their work, many
atypical workers are either unable or have great difficulty in establishing that they are
employees employed under a contract of employment. If they are not employees then,
presumably, they are outside the scope of the doctrine of vicarious liability.’ Does this mean
that there should be no way for the victims to receive compensation as those in cases
involving an employee would? McKendrick concludes by asking ‘Can the doctrine of
vicarious liability be adapted in order to encompass this new workforce or will the courts
have to create new forms of primary liability?’ Ward J, in considering McKendrick’s
statements made in 1990, stated: ‘To distil it to a single sentence I would say that an
employee is one who is paid a wage or salary to work under some, if only slight, control of
his employer in his employer’s business for his employer’s business. The independent
contractor works in and for his own business at his risk of profit or loss.’40 It would therefore
seem that independent contractors should be subject to different legal principles than
employees as they cannot fit in with the usual tests. An independent contractor who is in
business on their own accord should hold adequate liability insurance, hence bypassing
vicarious liability. When the incident is ‘bypassed’ it means that the victim will have a direct
claim of action against the independent contractor, not the person for whom they are working.
In the past this was not a problem, however, as Mackay says, being an independent contractor
or a worker instead of an employee is becoming increasingly fashionable today. These
individuals may assume that they are employees and therefore may not have the proper
insurance for themselves or even be aware that they need it. Commenting on this issue,
Lockwood stated: ‘The concept of vicarious liability developed during a period in which the
distinction between employee and self-employed was obvious and clear. Over the last few
decades, however, patterns of employment, occupation and business structures have changed
to an unprecedented degree, with a large part of the adult-working population becoming
increasingly involved in parttime, temporary or casual employment engagements. At the
same juncture a competitive business environment has resulted in many employing
organisations taking measures to reduce their labour costs. This has led to the growth of
employment situations where it has become difficult to ascertain the precise nature of the
employment relationship. This has given rise to an array of legal disputes on the issue over
the last 40 year’

This reiterates how the relationship between employer and employee, and hence the level of
control, has changed over time to make control as a singular test almost obsolete. The tests
have evolved from control, in isolation, to the right to control test. Lord Denning then
developed the organization/integration test before the mixed test was established in Ready
Mixed Concrete. Further still, the economic reality and ‘business on own account’ tests have
been used in an attempt to provide certainty to this crucial issue. Yet only in the sphere of
taxation has the test been established which (somewhat harshly) identifies with clarity an
employee from the genuinely selfemployed independent contractor. This links to vicarious
liability as it illustrates how the tests must change with time, as employment status has done.
Any future tests must incorporate both the modern employment situations, along with the
age-old ones. Hence, many different tests for employment status have been developed by the
courts to establish if a contract is of service (employee) or for services (independent
contractor). Many of these tests focus on whether the employer dictated where and when the
work was to be done and with what tools. The tests also consider different contractual and
external factors. Lord Cooke stipulated in Market Investigations Ltd v Minister of Social
Security that, where a person is in business on their own account, it is a contract for services,
otherwise it is a contract of services. This principle was subsequently cited in the case of Lee
Ting Sang v Chung Chi-Keung by the Privy Council – the factors considered included risk of
loss and chance of profit. In Cassidy v Ministry of Health, Denning LJ proposed a test based
on the extent of integration of an individual into a business or organization. The test was also
used by Denning LJ in Stephenson, Jordan & Harrison v MacDonald & Evans.

He stated that ‘It is often easy to recognise a contract of service when you see it, but difficult
to see where the difference lies’. This test looks into how the individual was literally 49
‘made part’ of the group of employees working for the employer. It considers whether they
used the lunch room and if they were included as one of the group – put in basic terms, would
they appear to have unquestionable employment status (they are an employee, not a worker)
from a layman’s perspective? The integration test clearly appeared to be the correct one to
Denning LJ in these two cases as it looked not at the contract in hand, but how the employer
treated the individual, along with the other staff. If it looked like they were an employee, then
they most likely were. However, it was only briefly popular with the courts as determining
‘integration’, which Denning failed to define in the case, led to conjecture as to its meaning
and its suitability as authority for future cases. A different test very quickly took favour with
the judges – the ‘economic reality’ test. Although all of these tests have their advantages and
disadvantages, the test used most in cases now is the ‘mixed’ or ‘economic reality’ test,
established in the case of Ready Mixed Concrete v Minister of Pensions by McKenna J. This
test asks three questions to establish if the individual in question is an employee or an
independent contractor:

1) Is the individual subject to a level of control by the employer to make the latter his master?
– this is taken from the control test previously discussed.

2) Did the individual provide a personal service in return for remuneration?

3) Are the provisions of the contract consistent with a contract of service? If all three of these
criteria are satisfied, then the individual will be found to be an employee. This test was
subsequently cited in the case of Nethermere (St Neots) Ltd v Gardiner And Another in
which Stephenson LJ commented