Vicarious Liability: “Someone’s Gonna Pay”

Associated Areas of law

Respondent superior, or “let the superior answer”, is the idea behind vicarious liability, the legal responsibility of an employer for an employee. This notion has been around since the 1600s when an English court determined that a pawnbroker was responsible when one of his employees stole a customer’s goods because the “act of a servant is the act of a master”.

In modern times, employer liability has three primary elements. First of all, the employee must be at fault. Secondly, the individual who creates the damage must be an employee of the employer being sued. This appears to mean that those who employ independent contractors are off the hook for liability; however, there are a number of exceptions. If an employer negligently selects, instructs, or supervises the contractor, or hires a contractor for work which is especially dangerous, the employer of an independent contractor may still be liable. Thirdly, the damage must be committed in the course of employment. What is considered “in the course of employment” is not simply whether the employer has hired the employee for, or authorized, a particular act. The Supreme Court decision in Bazley v. Curry ([1999], 2 S.C.R. 534) set out a “strong connection” test. If an employee commits a wrong that is completely unauthorized by the employer, such as an assault, then if the employer’s enterprise has introduced the risk of harm, for example by providing a locale for the wrong to take place, giving the employee opportunities to abuse their authority, creating an environment of friction, confrontation or risk, and as such significantly increasing the risk of harm, a strong connection can be established between the unauthorized act of the employee and the employer, resulting in employer liability.

Corporations may also be held vicariously liable for acts of employees, even though a corporation is not an individual, because some employees have enough authority within the corporate structure that they are acting as the “directing mind” of the corporation. Acts of these employees will be attributed to the corporation as acts of the corporation itself.

Vicarious liability has been criticized as unfair in making a person or persons responsible for something they did not do. However, strong policy reasons underlie the doctrine. Employers are generally in the best position to prevent torts from being committed through careful hiring, implementation of workplace policies and practices, or generally structuring the work environment so as to ensure it is not likely certain types of negligence will take place. Deterrence is another reason: vicarious liability prevents employers from hiring negligent employees, and it still deters employees from committing torts as even if not financially responsible for the loss, the employee will likely be fired if their employer ends up responsible. Employers are also in the best position to spread the loss through liability insurance or higher prices for goods or services which “build in” this potential liability.

The strongest policy reason behind respondeat superior however is money. In many cases employees are unable to financially compensate victims of their wrongs for losses, but their employer can do so. Although this “deep pockets” approach may be controversial, the Supreme Court in Bazley v. Curry summed it up by asking the question: When it comes to a loss, who should bear it? The innocent victim, or the employer who introduced the risk of harm by carrying on business? In cases where vicarious liability is established, the court has decided in favour of the innocent victim.

This article is intended for information purposes only and is not intended to be legal advice. We suggest you contact a lawyer for advice on your particular business and circumstance.