Introduction to Vicarious Liability
Employers are vicariously liable for the torts of their employees that are committed during the course of employment.
Reasons for vicarious liability
According to Michael A. Jones, Textbook on Torts, 2000, p379, several reasons have been advanced as a justification for the imposition of vicarious liability:
(1) The master has the 'deepest pockets'. The wealth of a defendant, or the fact that he has access to resources via insurance, has in some cases had an unconscious influence on the development of legal principles. (2) Vicarious liability encourages accident prevention by giving an employer a financial interest in encouraging his employees to take care for the safety of others. (3) As the employer makes a profit from the activities of his employees, he should also bear any losses that those activities cause.
Three questions must be asked in order to establish liability:
(1) Was a tort committed? (2) Was the tortfeasor an employee? (3) Was the employee acting in the course of employment when the tort was committed?
EMPLOYEE OR INDEPENDENT CONTRACTOR?
Employers/masters will only be liable for the torts of their employees/servants. They will not usually be liable for the torts of their independent contractors (see below). It is therefore necessary to establish the status of the tortfeasor.
The intention of the parties is not necessarily conclusive.
(a) The control test
This was the traditional test. In Collins v Hertfordshire, Hilbery J said: "The distinction between a contract for services and a contract of service can be summarised in this way: In one case the master can order or require what is to be done, while in the other case he can not only order or require what is to be done, but how it shall be done."
But in Cassidy v Ministry of Health, Somervell LJ pointed out that this test is not universally correct. There are many contracts of service where the master cannot control the manner in which the work is to be done, as in the case of a captain of a ship. He went on to say: "One perhaps cannot get much beyond this 'Was the contract a contract of service within the meaning which an ordinary person would give under the words?'"
(b) The nature of the employment test
One accepted view is that people who have a 'contract of service' (an employment contract) are employees, but people who have a 'contract for services' (a service contract) are independent contractors.
(c) The 'integral part of the business' test
This test was proposed by Lord Denning in Stevenson, Jordan and Harrison Ltd v McDonald and Evans  1 TLR 101: 'It is often easy to recognise a contract of service when you see it, but difficult to say wherein the difference lies. A ship's master, a chauffeur, and a reporter on the staff of a newspaper are all employed under a contract of service; but a ship's pilot, a taxi-man, and a newspaper contributor are employed under a contract for services. One feature which seems to run through the instances is that, under a contract of service, a man is employed as part of the business; whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it.'
Lord Wright suggested a complex test involving (i) control; (ii) ownership of the tools; (iii) chance of profit; (iv) risk of loss (Montreal v Montreal Locomotive Works  1 DLR 161). In a later case, Cooke J referred to these factors and said that the fundamental test was: 'Is the person who has engaged himself to perform these services performing them as a person in business on his own account?' If the answer is yes, it is a contract for services; if no, it is a contract of service. There is no exhaustive list of considerations relevant to determining this question, and no strict rules about the relative weight the various considerations should carry in a particular case. Factors which could be of importance were: (i) whether the person hires his own helpers; and (ii) what degree of responsibility for investment and management he has.master-servant relationship.
Lending an employee
If an employer lends an employee to another employer on a temporary basis, as a general rule it will be difficult for the first employer to shift responsibility to the temporary employer.
An employer will only be liable for torts which the employee commits in the course of employment. There is no single test for this, although Parke B famously stated in Joel v Morison (1834) 6 C&P 501 at 503, that the servant must be engaged on his master's business, not 'on a frolic of his own'.
An employer will usually be liable for (a) wrongful acts which are actually authorised by him, and for (b) acts which are wrongful ways of doing something authorised by the employer, even if the acts themselves were expressly forbidden by the employer (Salmond & Heuston on the Law of Torts, 1996, p443). Liability for criminal acts will also be considered.
If an employer expressly authorises an unlawful act he or she will be primarily liable.
Wrongful modes of doing authorised acts
In the following cases it was held that the employer was vicariously liable for torts of the employee:
Limpus v London General Omnibus Co (1862) 1 H&C 526 - bus drivers racing, despite a prohibition, caused a collision.
Bayley v Manchester, Sheffield and Lincolnshire Railway Co (1873) LR 8 CP 148 - a porter, believing a passenger was on the wrong train, violently pulled him off, causing injury.
In the following cases it was held that the employer was not vicariously liable:
Beard v London General Omnibus Co  2 QB 530 - a bus conductor drove a bus injuring a pedestrian.
An employer will not usually be liable for the criminal acts of employees. For example:
ST v N. Yorkshire CC  IRLR 98 - a deputy headmaster of a special school, responsible for caring for a handicapped teenager on a foreign holiday, sexually assaulted him. Butler-Sloss LJ said that this was not an unauthorised mode of carrying out a teacher's duties on behalf of his employer. Rather it was a negation of the duty of the council to look after children for whom it was responsible.
However, if the employee performs their duties in a criminal manner, an employer may be liable. See:
Nahhas v Pier House Management (1984) 270 EG 328 - a porter entrusted with keys by a tenant, entered her flat and stole jewellery. The employers were liable for negligently employing a 'professional thief' and breaching a duty to protect the plaintiff's flat.
Vasey v Surrey Free Inns  PIQR P373 - the plaintiff was attacked by two doormen and a manager employed by the defendant after he had kicked a door, breaking glass. The CA held the defendants vicariously liable because the attack was a reaction to the damage to the door for the protection of the employer's property and was not a private quarrel unrelated to the employer's duties.
THE INDEMNITY PRINCIPLE
There is a term implied at common law into contracts of employment that an employee will exercise all reasonable care and skill during the course of employment. An employee who is negligent is in breach of such a term and the employer who has been held vicariously liable for the tort may seek an indemnity from the employee to make good the loss.
LIABILITY FOR INDEPENDENT CONTRACTORS
In Alcock v Wraith  59 BLR 16, Neill LJ stated: "where someone employs an independent contractor to do work on his behalf he is not in the ordinary way responsible for any tort committed by the contractor in the course of the execution of the work ...
The main exceptions to the principle fall into the following categories:
(a) Cases where the employer is under some statutory duty which he cannot delegate. (b) Cases involving the withdrawal of support from neighbouring land. (c) Cases involving the escape of fire. (d) Cases involving the escape of substances, such as explosives, which have been brought on to the land and which are likely to do damage if they escape; liability will attach under the rule in Rylands v Fletcher (1868) LR 3 HL 330. (e) Cases involving operations on the highway which may cause danger to persons using the highway. (f) Cases involving non-delegable duties of an employer for the safety of his employees. (g) Cases involving extra-hazardous acts."