Vicarious liability

Vicarious liability is a fundamental principle of law under which one person is held legally responsible for the wrongful act of another, even though the former did not directly commit the act. It is most commonly applied in the context of the employer–employee relationship, where an employer is liable for the torts committed by an employee during the course of employment. The doctrine arises from considerations of justice, public policy, and social convenience, ensuring that injured persons are compensated by those who have the ability and duty to control the wrongdoer.

Concept and Meaning

The term vicarious means “substituted” or “acting in place of another”. Therefore, vicarious liability refers to a situation where one person (the principal or master) is held liable for the acts or omissions of another (the agent or servant). This liability does not arise from the person’s own wrongdoing but from the relationship that exists between the wrongdoer and the person held liable.
It is based on the maxim “Qui facit per alium facit per se”, meaning he who acts through another is deemed to act himself. The law, therefore, imputes the act of the subordinate to the superior.

Essentials of Vicarious Liability

For vicarious liability to arise, certain essential conditions must be satisfied:

1. Existence of a Relationship: There must be a specific relationship such as master–servant, employer–employee, or principal–agent. The doctrine generally does not apply to independent contractors.
2. Commission of a Wrongful Act: The subordinate must have committed a wrongful act or omission that gives rise to legal liability.
3. Act Done in the Course of Employment: The wrongful act must have been committed in the course of employment or within the scope of authority. If the servant acts outside the course of employment (a frolic of his own), the master is not liable.
4. Connection Between Employment and Wrong: There must be a sufficient connection between the employee’s duties and the wrongful act so that it can be regarded as done in the course of employment.

Basis of the Doctrine

The principle of vicarious liability is founded on public policy and social justice. Courts have identified several reasons for imposing such liability:

• The employer has control over the acts of the employee.
• The employer benefits from the employee’s work and should bear associated risks.
• The employer is financially capable of compensating the victim.
• It promotes careful selection, supervision, and discipline of employees.

Thus, the rule ensures that losses caused by employees in the course of business are borne by the enterprise that benefits from their work.

Master and Servant Relationship

This is the most common form of vicarious liability. A master is liable for the torts committed by his servant during the course of employment.

Acts Within the Course of Employment

A servant’s act is within the course of employment if it is:

1. Authorised by the master, or
2. Unauthorised in the mode of performance, but performed in furtherance of the master’s business.

In Limpus v. London General Omnibus Co. (1862), a bus driver, contrary to instructions, obstructed another company’s bus and caused an accident. The court held the employer liable, as the act was done in the course of employment, even though it was prohibited.

Acts Outside the Course of Employment

If the servant acts on his own for personal reasons, the master is not liable. In Beard v. London General Omnibus Co. (1900), a bus conductor drove a bus without authority and caused an accident; the company was not held liable since the act was outside his employment duties.

Employer and Independent Contractor

An employer is not vicariously liable for the torts committed by an independent contractor because the contractor controls the manner and method of work. However, exceptions exist where:

• The employer delegates a duty that is inherently dangerous.
• The act involves a non-delegable duty (e.g., maintaining public safety).
• The employer authorises or ratifies the wrongful act.

Principal and Agent

A principal is liable for the wrongful acts of an agent committed within the scope of authority. If an agent commits fraud, negligence, or misrepresentation while conducting the principal’s business, the principal may be held responsible.
For example, in Lloyd v. Grace, Smith & Co. (1912), a law firm was held liable when its managing clerk defrauded a client while acting within the scope of employment.

Partners in a Firm

Under Section 25 of the Indian Partnership Act, 1932, every partner is jointly and severally liable for the wrongful acts or omissions of other partners done in the ordinary course of the firm’s business. This principle extends the concept of vicarious liability to partnership firms.

State Liability

The State can also be held vicariously liable for the tortious acts of its employees performed in the course of their duties. The doctrine originated in the English case P & O Steam Navigation Co. v. Secretary of State for India (1861), where the East India Company was held liable for negligence by government servants in the course of non-sovereign functions.
In India, Article 300 of the Constitution allows suits against the Government for acts committed by its employees, subject to the same conditions as those against private individuals.
However, acts done in the exercise of sovereign functions (such as defence, law enforcement, or administration of justice) generally attract immunity, though courts have increasingly restricted this defence to preserve citizens’ rights.

Vicarious Liability in Modern Context

Modern applications of vicarious liability extend beyond traditional master–servant relationships, adapting to changing social and economic realities. Examples include:

• Employer liability for sexual harassment or discrimination by employees.
• Hospitals liable for negligence of doctors, nurses, or staff.
• Schools or institutions liable for torts committed by teachers or students under supervision.
• Companies liable for acts of agents or representatives committed in the course of business.

Tests for Determining Course of Employment

Courts have developed several tests to determine whether an act was done in the course of employment:

1. Control Test: The master is liable if he had control over the manner in which the work was done.
2. Organisation or Integration Test: If the worker’s duties are integral to the employer’s business, he is likely to be an employee.
3. Course of Employment Test: If the wrongful act was closely connected with the authorised duties, the employer is liable.

In Lister v. Hesley Hall Ltd. (2002), the House of Lords held a school liable for sexual abuse committed by a warden, as the wrongful acts were closely connected with his employment duties.

Exceptions and Defences

While vicarious liability is generally strict, certain exceptions and defences may apply:

• Act outside employment: Where the servant acts entirely outside his duties.
• Independent contractor: No liability for acts of independent contractors (subject to exceptions).
• Consent or contributory negligence: If the injured party consented to the risk or was negligent.
• Statutory authority: Acts authorised by law may exempt the master from liability.

Rationale and Policy Considerations

The justification for vicarious liability lies in several key policy reasons:

• To ensure effective compensation for victims.
• To promote careful supervision by employers.
• To distribute losses across society through insurance and enterprise costs.
• To enhance deterrence by making organisations responsible for employee conduct.

It thus reflects the principle of social responsibility in modern law — holding those in power accountable for the acts done on their behalf.

Vicarious Liability in India

Indian courts have applied the doctrine consistently in cases of employer–employee relationships, medical negligence, and governmental liability.
In State of Rajasthan v. Vidyawati (1962), the Supreme Court held the State liable for negligence by a government driver during a non-sovereign act. Similarly, in Kasturi Lal v. State of U.P. (1965), the Court exempted the State from liability for acts performed in the exercise of sovereign power, such as police duties.
The evolving approach of the judiciary now favours a narrow interpretation of sovereign immunity, particularly in cases involving human rights or negligence by public servants.

Significance of Vicarious Liability

Vicarious liability plays a crucial role in:

• Protecting victims by ensuring compensation from solvent defendants.
• Encouraging employers to maintain high standards of training and supervision.
• Promoting social justice, ensuring that those who benefit from activities also bear their risks.
• Adapting law to modern corporate, institutional, and governmental structures.