Back in the day, the concept of vicarious liability (that is the situation in which one party is held liable for the acts or omissions of another) was largely confined to the employer/employee relationship. However, as working relationships have become more complex and diverse, and fewer people are entering into classic employer/employee relationships, vicarious liability has changed as well. Two recent cases demonstrate how far we have come.

In one case, the Supreme Court questioned whether an unincorporated association (a school) could be held vicariously liable for the acts of individuals who taught at their schools, but were employed by another body. That other body had also been held vicariously liable for the acts of the teachers. The Supreme Court decided that the school could be held liable. Essentially, the court decided that where the relationship was “akin to that between an employer and employee”, the “employer” could be held vicariously liable.

The case referred to above was heard in 2013, but was one in a line of cases which had decided that not only employers were liable for the acts of people who work for them in various capacities. As such, a nightclub was held vicariously liable for the violent acts of a bouncer employed by an agency whose business it was to supply bouncers, and a contractor was held liable for the acts of an employee of a sub-contractor.

In a 2016 case, however, the prison service was fixed with liability in respect of the acts of an individual who was not employed by anyone. In Cox v Ministry of Justice, Mrs Cox was employed by the prison service as catering manager and ran a prison kitchen. The kitchen staff consisted of employees and prisoners who worked alongside those employees. One of the prisoners accidentally dropped a sack of rice on Mrs Cox and injured her. The question for the court was whether the prison service should be vicariously liable for the acts of the prisoner. The Supreme Court held that this was a case where vicarious liability should be imposed – what the prisoner was doing was sufficiently similar to employment for the principle to apply.

So – where does that leave businesses? They may think that because someone who works for them is employed by someone else, or is not even employed by anyone, they will not be responsible for their actions. However, as we can see from the discussion above, there may be cases in which such a business may be either jointly or solely liable for the acts of those individuals. What can businesses do to protect themselves? Often they have no or very little knowledge of who agencies and sub-contractors hire, so the usual checks they would undertake if employing someone themselves, such as interviews and reference checks, are not possible. Indemnification under the contract with the agency or sub-contractor may help – but will only be as valuable as the entity giving it. If that entity is a limited liability company with few assets and no insurance, businesses may want to consider the scope of their own insurance and whether it covers both employees and those who, whilst not employees in the conventional sense, might be held to be in such a relationship for vicarious liability purposes.

 

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