Vicarious Liability

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Vicarious liability

The Doctrine of Vicarious liability can also be termed as the heart of the common law system of tort. It acts as being saving clause for the inferior, who acts for the wrongful order of their superior that ultimately leads to the wrongful act under tort law. Generally, it is the rule that the person is liable for the wrongful acts done by him and no one else would incur the liability for his act. But under certain circumstance, one person can be held liable for the acts done by the other and that’s where the doctrine of vicarious liability lies. Thus, for example where the wrongful act was done by B who was at that time working under A then in that condition A would be held liable for the tortious liability under Doctrine of Vicarious Liability.But to be held liable for the tort, it is necessary that there should be certain kind of relationship between the two and the act did should be in a certain way related to that relationship.

Common examples of that kind of relationship are as follows:-

  1. Liability of the principal for the act of his agent,
  2. Liability for the tort of his servant,
  3. Liability of partners of each other’s wrong.

Therefore where an agent does some wrongful act, within the course of his employment for which the act is liable under tort, then for that act the principal’s liability shall arise. The agent would be liable for the wrongful act he has done, whereas the principal would be liable vicariously for the act due to the principal-agent relationship between the two. In that situation, the plaintiff is at the choice whether to sue principal or agent or both.

Liability arising between relationships is as follows:

Principal & Agent

When a person has got the authority to perform a certain act, but he authorizes it to someone else working under him, this relationship is known as a principal-agent relationship. When the principal authorizes an agent to perform some tortious act, the liability for that will be not only of that person who has committed it but also of that that has authorized it[1]. It is based on the principle “Qui facit per alium facit per se” which refers to the act of an agent, is the act of principal. Principal and agent both liability is joint and several.

The authority to do some act allotted by the principal to his agent may be expressed or implied. The principal usually generally do not ask expressly to his agent for some wrongful act, but what agent do during the course of his employment, the principal shall be made liable for that. Like in the case of Lloyd vs. Grace, Smith & Co.[2] in this case, Mrs. Lloyd was the owner of two cottages, but she was not satisfied with the income so received from those. Therefore, she ultimately reached to the office of Grace, Smith & Co. which was a firm of solicitors, engaged in the working of consulting about the property matters. She asked about her problem, the managing clerk of the company advised her to sale the cottages and invest the money in some nice place. She accordingly agreed to the same, she was asked to sign the sale deeds for the cottages, but instead of that, the clerk by doing fraud made her sign on gift deed in the name of the clerk. He then sold the cottages and misappropriated the proceeds. He had done the act solely for her his own personal profit, without the permission of his principal. It was held that even though the agent acted in his personal capacity but was acting in the course of his apparent authority, and hence the principal was held liable for fraud.

Partners

The wrongs done by one partner under tort law will result in making the other partner also liable in the same manner as the principal is held liable for the wrongful act of his agent. The rules of law of agency apply in cases of their liability also. Therefore for the wrongful act of one partner of a business firm the all other partners are held liable to the same extent as that of the guilty partner[3]. As in the case of Hamlyn vs. Houston & Co.[4] one of the partners of the partnership firm bribed plaintiff’s clerk to give him the secret information of plaintiff’s business. It was held that both the partners of the form to be held liable for inducing breach of contract, which is a wrongful act although the act was committed by only one of them.

Master & Servant

The relationship of master and servant is also the same as that of principal and agent. Where for every wrongful act of the agent the principal is liable like for the wrongful act of the servant the master is to held liable. Therefore, for every wrongful act on the servant the master is presumed to have done that by himself.

“The doctrine of liability of a master for the act done by his servant is based on the maxim Respondeat Superior that refers to let the principal be liable and it puts the master in the same position as if he had done the act himself. It also drives validity from the maxim Qui Facit Alium Per Se, i.e. he who does an act through another is deemed to be done it by himself.”[5] It is so because it seems that the master is in a better position to meet the claim because of his larger pocket and also the ability to pass on the burden of liability through insurance.

Accordingly, the servant can be defined as, a person employed by another to do work under the direction and control of his master. For the master to be held liable essentials are:-

  1. The tort must have been committed by the ‘servant’
  2. The servant committed the tort in the course of his employment.

Position in England:

During the early times, at Common Law system, the Crown can never be held liable for any of their tort act, committed either by their order or committed by their servants in the course of their employment[6]. The wrongdoer was solely held liable even if the act was done under the order of the crown. No higher officials were held liable for the act of their subordinates, as the relation between then at that time was not of the master and servant but rather they were there fellow servants. The immunity of being a government servant was not given to them. As a result, where for the act of servant in the ordinary course of employment master was held liable, in government service for the act of servant government was not held liable.

With the increase in the duties of government, there was an increase in the employment of the servants to be working under the crown. Therefore with a span of time crown became the biggest employer in the employing the people. But with that, there was an increase in the demand for the justice i.e. for holding Crown liable for the act of its servants. The demand has accepted the crown was to be made liable if any tort was committed. Various devices were formed for the same. Crown started the practice of defending itself for the act of its servant. Where if any action was found wrongful done by the servant crown was asked to pay compensation from the treasury. Many times the some of the crown servants were even made defendant where the actual culprit was not found. Like in the case of Royster vs. Cavey[7]  in that case, the Court of Appeal followed the order of the House of Lords in the decision of accepting the method of a nominal defendant which was criticized in the matter of Adams vs. Naylor[8]. In Royster’s case, it was held that if it was necessary for a case to succeed the person named by the Treasury Solicitor should be the same who was apparently the wrongdoer.

But this position was entirely changed by the Crown Proceedings Act, 1947, under which the Crown was equally held liable for the tort committed by its husband as like in case of a private individual.

Position in India:

As in England, there is the Crown Proceedings Act, 1947; India doesn’t have any statutory provision mentioning the liability of the State in India.

In pre-constitutional days, there was a little mention for the liability of the state under sec 65 of Govt. of India Act, 1858

Therefore it did not clearly mention the State’s liability for a particular act or not. Similar was the position in Government of India Act, 1935 which did not clear the position but it clearly recognizes the position prevailing before the passing of the act.

Even presently in Constitution of India, there is a mention about the liability of the government for the act done by its servant under Sec. 300 it clearly defines, but till now there is still a doubt regarding the acts of the government for which it would be held liable. Therefore the liability of government totally depends upon the discretion of the Judges. 

Case Laws

  • State Bank of India vs. Shyama Devi, A.I.R. 1978 S.C. 1263

In this case, the plaintiff husband gave some amounts and cheques to the defendant who was an employee of the defendant bank. The money & cheques were given to be deposited in the bank account of the plaintiff; no proper receipt of such transaction was given. The defendant misappropriated the amount. It was held that even though the defendant was the employee of the bank, but when the money was given to him was not performing under the performance of his duty, and therefore the bank can’t be held liable

  • Govindarajulu vs. M.L.A. Govindaraja Mudaliar, A.I.R. 1966 Mad.332

In this case, the owner handed his motor lorry for repair work to the defendant’s workshop. After it was done, an employee of the repair workshop drove it, and there was an accident occurred. The High Court of Madras held that the owner can’t be held vicariously liable, as the owner of the workshop was an independent contractor and not the servant of the lorry owner, and therefore the lorry owner can’t be held liable for the act.

  • Maganbhai vs. Ishwarbhai, A.I.R. 1984 Guj. 69

In this case, the trustee of the temple called an electric contractor, to divert illegally the supply of electricity which was given to the villagers for agricultural work, for a period of 1 month. The work was accordingly done in a hazardous way and without informing the electricity board. In one of the fortnight, the lines collapsed, as a result of which one of the villagers who was working on the field got injured. It was held that the trustee, who got the hazardous job, as well as the owner of the field from whose matter and with whose knowledge such connection was taken, were liable.  

  • Union of India vs. Harbans Sing, A.I.R. 1959 Punjab 39

In this case the, meals were carried from Delhi for distributing it to the military personnel who was on duty. The truck that was carrying meals was belonging to the military department and as such was being driven by a military driver. On the way, there was an accident which resulted in the death of a person. It was held that, that the act did was in the exercise of Sovereign power, and therefore the State could not be made liable for the same.

  • Basava vs. State of Mysore, A.I.R. 1977 S.C. 1749

In this case, some ornaments and cast of appellant had been lost. Police after finding some of them kept them in safe police custody under the orders of magistrate. To keep it safe they were kept in the trunk from which they were found missing. Supreme Court held that there is no proof that the ornaments were even after full security and due care and therefore the appellant was granted Rs. 10,000/- which was equivalent to the property lost.

Frequently Asked Questions:

  • Define vicarious liability?

Vicarious liability is a legal concept, many times referred to as imputed liability also. It is a concept in which law imposes liability over a person who did not in a real sense has committed any wrong but due to his place at the superior stage of their relationship will be held liable for the wrong done by their subordinates. That is, if a servant does something wrong in the course of his employment, then for his act master will be held liable.

  • What is vicarious liability between employer and employee?

The vicarious liability between employer and employee holds that for every wrongful act of employee performed in the course of his employment, the employer will be held vicariously liable. Like for example, where A an employee of a bank, misappropriated the money of one of the customer B of bank C. He was performing his duty under the course of his employment, therefore B can ask for a claim from C. as C is vicariously liable for the act of his employee.

  • Vicarious liability and respondeat superior connection?

Respondeat Superior is a maxim which refers to the let the principal be liable. This maxim applies in cases of master and servant relationship which is one of the examples of vicarious liability. Respondeat superior is connected with the concept of vicarious liability. As in vicarious liability, the principal or the master is held liable for the wrongful act of the servant who is doing his work in the course of employment which is also maxim says. So it can be said that the concept of vicarious liability works under the principle of respondeat superior.

  • What is the reason for vicarious liability to be applicable in tort law?

Reason for application of vicarious liability is:

  1. The masters are at the superior stage, it is presumed that they can pay the damages,
  2. It reduces the accident chances as an employer has a financial interest and therefore he will have more interest in promoting the protection and safety of work,
  3. As employees bear profit from his employees he will also be liable to bear his mistaken expenses.
  • Difference between vicarious liability and an independent contractor?

Vicarious liability is different from an independent contractor, in the sense that, where a servant is expected to work the order of his master, an independent contractor there is no such limitation. That is, a servant represents as an agent who is supposed to work under the control and supervision of his employer regarding the manner in which the work is to be done.  Whereas an independent contractor undertakes some work to be performed regardless of the manner in which he wants to perform it.

Thus, for example, if A owns a car and gives it to his friend to drive. The friend while driving it his B, then A will he vicariously held liable, but if A hires a taxi which hits B on way, then in that case A won’t be held liable for the act done by B. As the taxi driver is an independent contractor and he will only in liable for his act.

[References]

[1]Mclaughin vs. Pryor, (1942) Man. & G. 48.

[2] (1912) A.C. 716.

[3] S. 26, Indian Partnership Act, 1932:S. 10; English Partnership Act,1890.

[4] (1903) 1 K.B. 81:51 W.R. 99: 72 L.J.K.B. 72: 87 L.R. 500.

[5] Baxi Amrik Singh Vs. The Union of India, (1973) 75 P.L.R. 1 at p.7.

[6] Canterbury (viscount) vs. Att. Gen., (1842) 1 ph. 306.

[7] (1947) K.B. 204.

[8] (1946) A.C. 543.