Everything you need to know about vicarious liability

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Vicarious liability – the legal principle that makes an employer liable for its employees’ actions or omissions – has recently been in the news. Here's how it could affect your business.

The Scottish Court of Session recently held that a radiographer (and not her employer) was personally responsible for paying a patient £700,000 in damages for negligence. The case – Bell v Alliance Medical – is a reminder to all UK businesses of the importance of vicarious liability.

When will a business be liable for wrongful acts of its staff?

Vicarious liability does not apply to all staff. As a general rule, a business can be vicariously liable for actions of employees but not actions of independent contractors such as consultants.

This distinction can become blurred for secondees and agency workers. In these situations, there are often two 'candidates' for vicarious liability: the business that provided the employee, and the business that received him or her. To resolve this, courts usually ask:

(i) which business controls how the employee carries out his or her work; and

(ii) which business the employee is more integrated into.

Similarly, vicarious liability does not apply to every wrongful act that an employee carries out. A business is only vicariously liable for actions that are sufficiently close to what the employee was employed to do.

Sometimes this is clear-cut: in Bell, the radiographer’s failure to properly insert a cannula before an MRI scan was clearly connected to her employment. More difficult examples include a case in which an employee pulled a colleague’s hair as a prank (the court held no vicarious liability); and a professional rugby player who punched an opponent during a game (the court held that vicarious liability applied).

If a business is vicariously liable, can it recover its losses from the staff members involved?

In most cases, a wrongful act giving rise to vicarious liability will be a breach of the employee’s contractual obligation to use reasonable skill and care. This provides a route (which was used in Bell v Alliance Medical) for the employer to make the employee personally responsible for paying damages to the injured party.

It is the employer’s decision, of course, whether to go down this route. One consideration is whether the employee will be able to pay the damages (the radiographer in Bell had professional indemnity insurance). Going after a member of staff (particularly if the wrongful act was an honest mistake) might also damage wider employee relations.

Why is the situation different for anti-discrimination legislation?

The Equality Act 2010 contains a standalone system of vicarious liability for acts of discrimination. This features some key differences to ’standard’ vicarious liability.

While ’standard’ vicarious liability is generally limited to employees, vicarious liability for discrimination covers other individuals who are contracted to provide services in a personal capacity (such as a contractor or a consultant). In discrimination cases, the concept of acts being ’sufficiently close’ to the staff member’s duties is also wider.

In contrast to ’standard’ vicarious liability, however, businesses have a statutory defence to vicarious liability for discrimination. This provides a route for making the relevant staff member bear sole liability for the discriminatory act (and be personally responsible for paying any damages).

The statutory defence will apply if a business can show that it took all reasonable steps to prevent its staff from:

(i) carrying out the discriminatory act in question; or

(ii) doing anything of that description. In practice, this is likely to involve implementing an equality policy, providing equality training and dealing effectively with any complaints.

Liam Lane is a senior solicitor in the employment team at Brodies LLP

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