Vicarious Liability

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Vicarious Liability

When a person commits a wrong he is made liable for his wrongful actions, generally, his actions does not incur any liability on others. In certain cases, however, liability of one person for the act done by another person may arise. Such liability is known as Vicarious Liability. The word vicarious is derived from the Latin word ‘vice’ which means, ‘in place of’. In tort, a person is liable under vicarious liability if  following three essential conditions are fulfilled:

1. A tortuous act by one person

2. Some relationship between the wrongdoer and the one who is being made liable

3. Certain connection with the tortuous act and the relation they have.

For instance A can be made liable for the actions done by B, but it is necessary that there should be a certain kind of relationship between A and B, and the wrongful act should be in a certain way connected with that relationship.

Types of Relationships

Some of the common examples of types of relationship are:-

Relationship of Principal and Agent:

When an agent commits a tort in course of performing his duty as an agent then the liability of the principal arises for such an act. The agent is made liable because he has actually committed the tort while the principal is made liable vicariously because of the principal-agent relationship between the two of them. Their liability is joint and several. The plaintiff can sue the principal or agent or both of them.

Relationship of Master and servant:

In this case the master is made vicariously liable for the tort committed by his servant in course of the employment. The liability of the master and servant are jointly liable for the wrongful action.

Relationship of Partners of a firm:

The wrongful act committed by one partner in the course of the business then all the partners can be made vicariously liable for that one wrongful act.  Their liability is joint and several.

1) Principal and Agent

When a wrongful act is authorised by one person and it is performed by some other person then both are jointly liable. Where the principal makes the agent perform a tort then both are jointly liable for such an act. It is based on the maxim “Qui facit per alium facit per se” which means that “the act of an agent is the act of the principal”. Their liability is joint and several. The authority to do the act can be expressed or implied. The principal generally does not expressly ask his agent to do the wrongful act, but when the agent acts in the ordinary course of the performance of his duties as an agent, the principal becomes liable for the same.

In State Bank of India v. Shyama Devi[1] the plaintiff’s husband gave some amount and cheques to his friend, who was an employee in the defendant bank, for being deposited in the plaintiff’s account. No proper receipt for the deposits was obtained. The bank employee misappropriated the amount. It was held by the Supreme Court that the employee, when he committed the fraud, was not acting in the scope of bank’s employment but in his private capacity as the depositor’s friend, therefore, the defendant bank could not be made liable for the same. In Lloyd v. Grace Smith & Co.[2] the managing clerk of a firm of solicitors, while acting in the ordinary course of business, committed fraud against a lady client and got transferred her immovable property for his own benefit was held liable along with the agent.

Where the agent has done an act without the express or implied authorisation of the principal, the principal may still be made liable if he ratifies the agent’s act but the act that is ratified must have been done by the agent on his own behalf of the principal.[3] If it is not done on behalf of the principle but by the agent on his own behalf, the principal cannot be held liable for such act.

2) Master and Servant

Where a servant does a tort/ wrongful act during the course of his employment, the master is liable for it. Tough the servant is also liable for committing the action. The wrongful act of the servant is deemed to be the act of the master as well.[4]

Since, for the wrong done by the servant the master can also be made liable vicariously, the plaintiff has a choice to bring an action either or both of them. Their liability is joint and several. The reason for the maxim ‘respondent superior’ (let the principal be liable) seems to be the better position of the master to meet the claim because of his larger pocket and also to pass on the burden of liability through insurance. The liability still arises even though, the servant acted against the express instructions, and for no benefit of his master.[5]

For the purpose of arising liability for the master – the tort must be committed by the ’servant’ and within the ‘course of employment’. A master is not responsible for the negligence of other wrongful act of his servant simply because it is committed at a time when the servant is engaged on his master’s business, it must be committed in the course of that business so as to form a part of it and not be merely coincident with it.[6]  The master’s liability is in addition to his servant’s, but sometimes he alone may be liable as where the servant is protected by a special rule of immunity from a suit. Also the modern trend of law is to make the master liable even for acts which do not strictly fall within the term in the course of the employment.[7]

3) Partners

The relationship between partners of a firm is same as that of principal and agent. The rule of the law of agency applies in case of their liability also. Where, the tort committed by any partner in the ordinary course of the business of the firm, all the other partners is liable to the same extent as the guilty partner.[8] In Hamlyn v. Houston & Co.,[9] one of the two partners of the defendant’s firm, acting within the general scope of his authority as a partner, bribed the plaintiff’s clerk and induced him to make a breach of contract with his employer (plaintiff) by divulging secrets relating to his employer’s business. It was held that both the partners of the firm were liable for this wrongful act (inducing breach of contract) committed by only one of them.

Need For Vicarious Liability

The reason for which vicarious liability is imposed on them including the actual wrongdoer is due to the following reasons:

More Money: it is considered that in case of Master-Servant, Employer- employee and Principal-Agent the former has ‘deeper pockets’. He is financially more stable to deal with the liability as compared to the latter.

Prevention Method: this also acts as a prevention method for any wrongful act in the future. As the employer is also made liable, he shall try to encourage his employees to work with fair means and reap positive results.

Shared Liability: It is also seen that when the servant is doing his master’s work and while doing it he commits a tort then his master should also bear the consequences of his actions. Also it reduces the chances of servant getting exploited by their masters.

Party to blame: Vicarious Liability help the plaintiff’s to file a suit for either one of them or both reducing the conflict and confusion they had to face while determining who is actually liable.

Vicarious Liability in Criminal Law

Vicarious liability can also occur in criminal cases. A person can be made criminally liable for acts by some other person. For example, in case of robbery a person is who is waiting with the car and not getting physically involved in the robbery is equally liable as the persons who were actually committing the act of robbery. It means that the physical indulgence in the wrong is not necessary; even if a person is partly liable in a criminal act then he shall be made equally liable just as his accomplices. There are certain Sections mentioned in IPC that makes a person criminally liable for the actual act of other person:

Section 154: the owners, occupiers or person having the claim on the land are made liable for the acts of their employees, if they fail to inform or prevent the formation of an unlawful assembly, to the appropriate authority.

Section 155: vicarious Liability is imposed on owners/ Occupiers/ or person having interest on the land, if the managers or agents form a riot or unlawful assembly on their land.

Section 156: personal liability is imposed on the managers and agent involved in the above mentioned action.

Section 268 & 269: imposes vicarious liability on the master for the public nuisance created by the servant.

Section 499: Master is made liable if his servant commits the act of defamation.    

Conclusion

It be seen that vicarious liability is measure adopted by the law makers to protect the interest of not just the aggrieved but also those who are not in power. It helps the plaintiff’s to file suit against either one or both of the people involved which saves the time in decision making. It helps those servants, agents or employees that might just be acting as a pawn to their superiors and are getting wrongfully liable. This liability has reduced the chances of the superiors to just shift the damages to others in order to protect themselves. Also the expansion of Vicarious liability form just being a part in civil law to being able to be applied in criminal laws is facilitating for the decision makers to prevent the blame game and punish whoever is liable.

Illustration

1. ‘S’ is the servant of ‘T’. while getting an errand done for his master ‘S’ accidently hit ‘P’ while driving which caused serious injuries to ‘P’. In this case ‘T’ shall also be held liable along with ‘S’ for the accident caused.

2. ‘A’, ‘B’, ‘C’, are partners. ‘B’ tried to make a deal with another party by providing false information regarding their firm. The actions of ‘B’ are guilty and punishable but for his actions, under vicarious liability all partners shall be made equally liable for it.

3. An agent ‘A’ was given money by his friend. ‘A’ is also a cashier in the bank ‘P’. ‘A’ misplaces the money. In this case ‘P’ shall not be held liable for the actions of their agent ‘A’ because the wrong was not done in the course of employment.

Frequently Asked Questions

1. Is master vicariously liable for act done by servant outside the course of employment?

When a servant does any act which is not in the course of master’s business, the same is considered as outside the course of employment.eg., if an employee goes to have tea in a nearby tea shop and commits a tort it incur vicarious liability but if a servant with the master’s car, go for refreshment in a café far away and there by negligence commits a tort then the master shall not be made liable for his actions. When the act of the servant is altogether of a different kind then what was authorised by the master, the act is considered to be outside the course of employment and the master cannot be made liable for the same.

2. Are parents Vicarious Liable for acts by their children?

The principle underlying law of torts is to see that the claims of the aggrieved are redressed by the actual person at fault. Hence, if the parents or guardians were not made liable for the actions of their children this purpose of law would have failed. That is why they are held vicariously liable for the wrongful acts of their children or wards as the case may be. The basis of this liability is negligence in terms of keeping their children under proper control. However where children or ward have income of their own then the parents or guardians cannot be mad liable for their actions.

Edited by Parul Soni
Approved & Published – Sakshi Raje

Reference

[1]State Bank of India v. Shyama Devi (AIR 1978 SC 1263).

[2]Lloyd v. Grace Smith & co. (1012) AC 716.

[3] Eastern Construction Co. v. National rust Co., (1914) AC 197.

[4]Dr. R.K. Bangia, Law of torts, 78, (23rd edition, 2013), Allahabad Law agency.

[5]Limpus v. London General Omnibus Co. (1862) 1 H. &c. 525.

[6]Sitaram v. Santanuprasad, AIR 1966 SC 1697.

[7]Pushpabai v. Rajnit G&P  Co. AIR 1977 SC 1735, p1744.

[8]Indian Partnership Act, 1932, Sec. 25.

[9] Hamlyn v. Houston & Co.,  (1903) 1 KB 81.

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Rajni Negi
I am Rajni Negi, pursuing B.B.A.LL.B from Banasthali Vidyapith. In my free time I read novels, watch tv series and movies. I am a hardworking student and a team player. I feel like I am still a beginner and there is a long way to go, but I always strive to keep going forward. I wouldn't say I am a perfectionist but i keep on grinding till a find the solution. I am a solution provider when you need things done, I am your girl.