Vicarious liability imposes liability on D (defendant) to compensate C (claimant) for the damage caused by A (actor)’s wrong, although D is not personally at fault at all.
Here is a conflict between two principles:
(1) a victim of another’s wrong should have an effective remedy
(2) a defendant is not generally liable unless he was at fault.
How did this apparently unjust rule develop? Its origins are buried deep in medieval law. It started where the master expressly commanded his servant to commit a wrong. It developed to encompass acts done by implied command. By the end of the eighteenth century, there was a shift away from the notion of implied command, in recognition of a changing and developing industrial society. The master/servant (employer/employee) relationship was itself enough to impose liability on the master if the servant was acting within the scope of his employment.
The Two Tests
Disputes about vicarious liability became centred on two questions:
- Is there a true employer/employee relationship?
- If so, was A acting within the scope of his employment or was he on a frolic of his own?
Employer or Independent Contractor?
At the first test, the contrast was made between an employee and an independent contractor: a contract for service or a contract for services?
Control became the important factor. Was D instructing A how to do the work or contracting with him as to what work was to be done?
But, as in employment law, control has not survived as the crucial criterion for distinguishing employee from independent contractor. A variety of factors are taken into account, even the relative bargaining power of the parties: Autoclenz v Belcher SC  UKSC 41.
Is an Employment Relationship Necessary?
Recently employers have been found liable for the torts of their independent contractors.
- In Hawley v Luminar Leisure Ltd  EWCA Civ 18 CA, a nighclub which contracted with a security firm for supply of doormen was liable when one of the doormen seriously assaulted the claimant. The rationale was that the nightclub’s control of the doormen was such as to make them ‘temporary deemed employees’.
- In Viasystems (Tyneside) v Thermal Transfer (Northern) Ltd  QB 510, the Court of Appeal accepted the principle of dual vicarious liability, whereby liability depends not upon ‘transfer of employment. The inquiry should concentrate on the relevant negligent act and then ask whose responsibility it was to prevent it. Who was entitled, and perhaps theoretically obliged, to give orders as to how the work should or should not be done?’ per May LJ. Moving away from the control test, Rix LJ preferred to consider whether, ‘the employee in question…is so much a part of the work, business or organisation of both employers that it is just to make both employers answer for his negligence’
- Now the Court of Appeal, in JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust  EWCA Civ 938, has decided, by a majority, that a Roman Catholic Diocese can be liable for alleged child abuse by a parish priest, although there was no employment relationship and no control. A bishop cannot give a priest directions, nor dismiss him. A priest receives no pay from the diocese and no formal contract.
The Second Test Has Changed Too
The test 2 question is no longer whether A’s acts were an unauthorised mode of carrying out authorised duties. ‘What is critical is that attention should be directed to the closeness of the connection between the employee’s duties and his wrongdoing’ per Lord Millett in Lister v Hesley Hall Ltd  UKHL 22. Hence the employer of a residential warden was liable for the warden’s criminal child abuse.
Policy or Principle?
The policy reasons judicially suggested as justifying vicarious liability are:
- Right or obligation to control
- Employers have ‘deeper pockets’
- Loss-spreading/distributive justice
- Enterprise liability: he who sets up enterprise creates risks
Where Are We Now?
The two traditional tests have become an examination of the ‘closeness of the connection’ between D and A (test 1); and between the tortious act and the nature of the employment/appointment (test 2).
As Professor Glanville Williams said in ‘Vicarious Liability and the Master’s Indemnity’ 1957 :
‘Vicarious liability is the creation of many judges who have different ideas of its justification or social policy, or no idea at all’
How long is a piece of string? Parent and child could not be closer but parents are not liable for the torts of their children. Legal rules need greater clarity than a speculative set of policy reasons behind their existence.