Vicarious Liability

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Abstract

Vicarious liability is a class of liabilities that deals with transfer of liability from one party to another. This paper starts by an introduction of the doctrine of vicarious liability and proceeds to analyse the different ethical and legal issues surrounding the application of this doctrine.

The paper also highlights the applicability of vicarious liability in the contemporary times. The paper covers ethical issues in the application of employers’ vicarious liability, the application of the principals’ vicarious liability, the application of vicarious liability of corporations in tort, in vicarious employees’ continued liability and indemnity, and in vicarious parental liability.

Introduction

Vicarious liability is a class of liabilities that deals with transfer of liability from one party to another. Vicarious liability operates under the doctrine of respondent superior, which puts legal responsibility to a superior for illegal behaviour or acts of the subordinates. Third parties are thus supposed to be ethical in their duties to avoid transfer of liability.

In the same way, vicarious liability puts legal responsibilities on third parties with the duty, responsibility, or right to monitor and direct their juniors who act illegally or commit a crime.

Vicarious liability can thus take the form of employers’ liability, parental liability, principals’ liability, corporations in tort liability, and continued liability, and indemnity of employees. All these liabilities have ethical issues to be considered during application. In various circumstances, it may be legal, but unethical to apply a particular vicarious liability.

Introduction to the doctrine of vicarious liability

As aforementioned, vicarious liability operates under the doctrine of respondent superior and this doctrine puts legal responsibility to a superior for illegal behaviour or acts of subordinates. In essence, vicarious liability involves transfer of liability from one party to another. However, various ethical and legal justifications surround the application of vicarious liability laws.

Ethical doctrines guide the society in judging between what is right and what is wrong. The questions raised here include questions on whether in the application of vicarious liability to employer due to liabilities caused by employees is ethical and whether the application of vicarious corporation torts is ethical when an employee involves himself or herself in deals that cause the company certain amount of liability.

Another question is whether in the application of principals’ liability, it is ethical, especially when a person legalised to operate a machine; for example, a car, causes an accident and the owner is made liable by law.

Others include whether it is ethical in the application of employee continued liability and indemnification when the owner of a learning institution is made liable to a liability caused by an independent contractor and the question of whether it is ethical to make parents liable for the liabilities caused by their truant children.

This paper seeks to discuss ethical issues in vicarious liability and its appropriateness in the modern world through exemplification.

Ethical and legal justifications for the doctrine of vicarious liability

Both employees and employers have raised various issues concerning ethical considerations in the application of vicarious liability in employers’ vicarious liability. In this doctrine, the employer is held responsible whenever his or her employees commit an act of omission or negligence in their line of duty. Therefore, it is questionable whether it is ethical to hold the employer liable for liabilities caused by his or her employees.

Giliker (2011) argues that under the respondent superior doctrine, as long as the employee was acting under the scope of his or her duties, the employer is held responsible for his or her negligence in the course of duty.

Ethical considerations in such a case ask the question whether the employee was personally licensed to carry out the duty, whether he or she was trained on how to perform the task, whether he or she acted on negligence, and whether he or she followed the guidelines of performing the task.

Therefore, it is unethical to hold the employer vicariously liable to liabilities caused by employees that are negligent in following the guidelines in their line of duty.

It is also unethical to make the employer liable for omissions caused by an employee trained and licensed to carry out a particular duty; for example, a doctor in a private hospital who injects a patient with the wrong medicine should be held liable for the consequence since he or she is licensed to treat patients.

Franklin (2008) observes that out of the difficulties in distinguishing whether the employee got into the liability while working for his or her own interest or for the interest of the employer, the court must separate detour from frolic.

In vicarious liability, detour occurs when an employee is carrying out the duties as directed by his or her employer or terms of employment. On the other hand, frolic vicarious liability occurs when an employee gets into a liability as he or she acts on his or her own light and interests. Such an employee should be held ethically liable for his or her actions.

Conn (2009) argues that in case of a liability being committed by an independent contractor, the employer is not held responsible by law. Conn (2009) argues that vicarious liability transfers all liability to the independent contractor immediately he or she signs a contract.

The contractor is thus liable for tortuous acts. However, ethics should guide the injured party to hold the contractor liable and not the proprietor if the contractor is licensed to do his or her work.

Franklin (2008) argues that under the common law, a certain phrase in vicarious liability states that one “who acts through other acts in one’s own interest” (p. 435). This view can be considered as ethical in the modern society where employers hide under the guise of employees.

In most cases, employees are given instructions to carry out activities whose implications they do not know. For instance, a security guard who is instructed to lock out a particular person from accessing a premise without information about the legality of ownership by his or her employer may bar the legal owner of the same premise and be sued for obstruction and even trespass, which is unethical.

Giliker (2011) argues that both criminal and tort laws hold liable an employer who uses another person to commit a liability. The employers’ vicarious liability is applicable in the modern world; however, ethical considerations should be upheld.

The question of whether it is ethical to hold the owner of an item responsible for a liability caused by another person who borrows or hires a machine discredits vicarious principals’ liability. Principals’ vicarious liability in common law holds that when dealing with automobiles like vehicles, the owner of a vehicle is held liable for a liability committed by another person that he or she loans it to under the vicarious liability doctrine.

The principals’ liability operates under the premise that the owner is the proprietor and the operator is his or her agent. This scenario can only be ethical especially when a person loans a car to do a particular activity for the owner of the car. The principal owner cannot be ethically liable even if the driver were his employee.

In fact, with the modern day car leasing business taking root, this vicarious liability has been scraped out since it is considered unethical today. The principals’ liability holds that the line-holder is held, under the law, as having a non-delegable duty towards the client. The principals’ liability also holds that the client is liable for disruption of peace in the process of repossession.

It is ethically wrong to hold the lender vicariously responsible by law for destruction of property and breach of peace during the process of repossession. It is also unethical for a borrower who fails to repay his or her loan or to clear instalments to be justified under vicarious liability. The lender is ethically right to repossess his or her property and not to suffer loss.

Ethical issues have also been raised on application of vicarious liability of corporations in tort especially since companies cannot act on their own. Employees of a particular company can thus commit destruction and make the company liable under the law of tort. The question is whether intentional actions by employees that result in liability are ethical or not.

Companies act through employees and it is ethical to hold employees liable for their actions in the modern day business world. Employees can hide under a company’s name to commit destruction, thus causing liability since the company will be held responsible under the vicarious liability laws. Ethics and state of mind of senior officers should also be right in order to avoid unnecessary liabilities.

In fact, regardless of whether the other officials of the company know about it or not, the liability lies on the company; for example, the case of Meridian Global Funds Management Asia Limited v. Securities Commission of (1995) 2 AC, 500. In this case, some senior officers of Meridian Global Funds Management Asia Limited used company funds to buy some shares.

It was ruled that through the capacity of these officials acting in a good state of mind, the company knew about the venture. The same holds for employees who get into a liability while acting on behalf of their employer for example in the legal case of Armagas Limited v. Mundogas S.A (1986) 1 AC 717.

Brodie (2007) continues to affirm that the authority bestowed upon employees gives them the responsibility to act on behalf of the company. For example, it is ethically wrong, but legally right for a company’s financial manager who is authorised to enter contracts on behalf of the company to go on and hire services for his or her own interests thus putting the company in liability

Multiple ethical issues have also been raised on application of employees’ continued liability and indemnity in common law. In this vicarious liability, both the employer and the employee are liable for any harm that they cause in the course of their duty.

Under the respondent superior, the employer is liable for the harm caused by his or her employees in the course of their duties. The ethical question raised here is on the circumstances when the employer can be held ethically responsible.

Anselmi (2012) asserts that the American law states that unless proven otherwise by another written law, the employee or the actor is held liable under employees’ continued liability law. Giliker (2011) argues that regardless of the actor acting on behalf of the employer, he or she is also ethically answerable to the law of tort.

Employees’ continued liability is thus applicable in the modern world since it considers both the employer and the employee and can indemnify one of the parties. For example, the employees’ continued liability and indemnity is currently adopted by all the states in the United States and many other nations across the world.

However, the idea of indemnification happens in cases where either of the parties is sued. In such cases, ethical considerations are seen to have taken place. However, Anselmi (2012) further affirms that ethical indemnification can only be done at free will, but not through forceful means, as it happened in the case of Lister v. Romford Ice Cold.

Parents have an ethical responsibility towards their children and they are thus regulated under the vicarious liability in cases of tort of their children. The damage caused by children is transferable to the parents or guardians in vicarious liability. It is unethical for parents to neglect their role in parenting, hence damage caused by their children are vicarious to them.

Ethically negligent parents in regard to their children; for example, one who fails to supervise or keep dangerous explosives or guns away from children, is vicariously liable to all damage that the children commit. This aspect is ethical since the transfer of liability that is committed by children is clearly spelt out under the vicarious liability on parental liability.

Vicarious parental liability is applicable in the modern world especially with the increased child negligence and child crimes. However, it is unethical to hold a parent responsible for a crime committed by a child in the absence of the parent, for example at school.

Application of ethical and legal doctrines of vicarious liability in modern world

Various ethical and legal doctrines of vicarious liability are applicable in the modern world; for example, vicarious parental liability is applicable in modern world especially with the increased child negligence and child crimes. However, it is unethical to hold a parent responsible for a crime committed by a child in the absence of the parent like at school.

Employees’ continued liability is also applicable in the modern world since it considers both the employer and the employee can indemnify one of the parties. For example, the employees’ continued liability and indemnity is currently adopted by all the states in the US and many other nations across the world.

The employers’ vicarious liability is applicable in the modern world since it takes into account the interest of both the employer and the employee. Portions of the principals’ vicarious liability are also applicable in the modern society especially with increase in lending in the motor industry.

Conclusion

Various ethical issues have been raised in the application of vicarious liability. Transfer of liability from one party to the other can be ethical or unethical in different liabilities in the modern society.

Some of the vicarious liabilities are applicable in the modern world; for example, employers’ liability, parental liability, liability of corporations in tort, and employees’ continued liability and indemnity. However, other vicarious liabilities like the principals’ liability have been scrapped from the modern world of business due to inefficiency.

References

Anselmi, K. (2012). Ethics, law, and policy: nurses’ personal liability vs. employer’s vicarious liability. MEDSURG Nursing, 21(1), 45-48.

Brodie, D. (2007). Enterprise liability: justifying vicarious liability. Oxford Journal of Legal Studies, 27(3), 493-508.

Conn, D. (2009). When contract should pre-empt tort remedies: limits on vicarious liability for acts of independent contractors. Fordham Journal of Corporate & Financial Law, 15(1), 179-219.

Franklin, R. (2008). “But I didn’t do it!” expanding theories of vicarious liability. FDCC Quarterly, 58(4), 435-449.

Giliker, P. (2011). Vicarious liability or liability for the acts of others in tort: a comparative perspective. Journal of European Tort Law, 2(1), 31-56.

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