What is Vicarious Liability?

If you are a business and someone within your business is dealing with a dispute, you may come across the term ‘vicarious liability.’ Knowing your legal responsibility with employers and customers is an important step towards dealing with a dispute. This article will explain what vicarious liability is and how it might affect you.

What is Vicarious Liability?

Put simply, vicarious liability is a situation where someone becomes partly responsible for the actions of another. Usually, this occurs within an employer-employee relationship and is often from a negligent act. 

Customers will usually choose to sue an employer over an employee. This is because employers tend to have more money and are more able to pay more compensation. 

Importantly, vicarious liability is an aspect of tort law. Tort law is the area of law that deals with compensation, usually for negligence. This means that you will be liable if your employee has done something which is negligent and gives rise to compensation or a costs order. However, it does not mean that you will necessarily be liable if your employee has committed a crime. 

When Does Vicarious Liability Apply?

The first thing to know is that vicarious liability is a form of strict liability. Strict liability means that fault is not taken into consideration. For example, the legal requirement to wear a seat belt comes with strict liability. This means that you will be liable regardless of whether you are at fault or not. 

In the vicarious liability context, this means that you are liable for the actions of your employee even if you are not at fault yourself. 

Second, the rules on the special relationship needed to give rise to vicarious liability can be complex. Common law has also determined these rules. Typically, it is a relationship between an employer and an employee. However, it can also be a relationship that is ‘akin to employment.’

Examples

A common example of a vicarious liability situation is where you are running a leisure centre. Imagine that one of your employees fails to take precautions to protect the health and safety of a customer. Imagine also that this results in the customer suffering an injury. In that case, the employee would be liable. However, because you are the employee’s employer, you would then also be vicariously liable. This would mean that your business would be liable to pay compensation as if it had been your fault. This will be the case even though it may not have been your fault.

However, the person who actually committed the wrongful act may act in their capacity as an individual. This would mean that you would not be vicariously liable. For example, imagine that you are the owner of a warehouse where personal trainers are able to bring their clients for a workout. In this case, this would not fall within a relationship ‘akin to employment.’ This is particularly relevant if you are dealing with independent contractors.

Vicarious Liability for Independent Contractors

Independent contractors can be a bit more tricky. A court may decide that the wrongful act of an independent contractor gives rise to vicarious liability. However, this may depend on the contractor’s specific job and responsibilities. Additionally, it is even more difficult if you do not have a legal document that specifically outlines the rights and responsibilities of the contractor.

What Can I Do as a Business Owner to Avoid Vicarious Liability?

Given all of the above considerations, your business can take a few steps to mitigate the risk of being vicariously liable.

First and foremost, it is a good idea to make sure that you have clearly defined your relationship with anyone who conducts work for your business. This reduces the risk of being vicariously liable where you have brought in an independent contractor. 

Second, it is important to make sure that all of your employees are well trained. This is to ensure they are unlikely to do any wrongful acts which are negligent and gives rise to a tort law claim.

Finally, do not panic if you do find yourself facing a vicarious liability claim. It is important that you seek professional legal advice from a lawyer who is a specialist in compensation. 

Key Takeaways

Vicarious liability is the area of law that deals with an employer having to pay compensation for the wrongful acts of their employee. As an employer, you may be vicariously liable if someone who works for you has done a negligent act that has caused loss to an individual. If you are in this situation, it is a good idea to speak to a tort law specialist lawyer who can advise you on your precise legal position. Our experienced contract lawyers can assist you as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today at 0808 196 8584 or visit our membership page.

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